Brent crude oil, the worldwide standard for crude, is ripping even higher today, touching $116 a barrel and not looking to stop anytime soon. Oil is up +32% since June thanks to inflation and geopolitical risk. This is great for producers of oil; bad for consumers of oil.
Our Energy Analyst Kevin Kaiser had a nice quote that pretty much summed up the long case for crude oil. Allow us to share:
“Bull case for #oil is bailouts and bombs - not growth. $USO $OIL”
Kaiser pretty much nails it. A lot of market participants seem to have wised up this year and noticed that supply and demand economics don’t have anything to do with oil. We’ve got plenty of oil. But the threat of Iran closing the Strait of Hormuz or unrest in the Middle East is what has everyone on the edge of their seat. With hedge funds remaining incredibly bullish on oil, fundamentals are thrown out the window. It’s a waiting game.
