As We Kickoff Trading After Saudi’s Attacked And Crude Oil Is Soaring, Here Is What You Need To Watch
As We Kickoff Trading After Saudi’s Attacked And Crude Oil Is Soaring, Here Is What You Need To Watch from King World News
As we kickoff what promises to be another wild week of trading after Saudi’s attacked and crude oil is surging, here is what you need to know.
KWN will be publishing extra articles today due to the violent nature of the trading in global markets after the attack on Saudi Arabia. Let’s get started…
With Respect To Crude Oil And Inflation
September 16 (King World News) – Peter Boockvar: “I have to leave the geopolitics among Saudi Arabia, Iran, the US, etc, the supply/demand analysis of oil and how quickly the Saudi’s can come back on line to others. With respect to any inflationary implications, WTI oil has traded in a $50 to $65 range all year and until it breaks out above, I don’t think it will matter that much. Brent has been between $55-70 give or take. This all said, if central bankers want an increase in inflation, then there is a part of them that wants to see higher oil prices as a price rise is a price rise. I’m sure though on Wednesday we’ll hear from Powell the word ‘transitory’ again if asked about any sharp rise in fuel prices. But, this could complicate the job of the Fed if it lasts. Note the idiocy of all this on the part of central bankers in wanting higher prices of the things we consume.
I’m sure many are going to try to figure out the economic consequences if oil prices rise further and stay high. I’ll just say simply, it’s good for oil producers and not good for oil users. If sustained at a higher prices, the industrial users will do their best to pass it on via surcharges while the consumer will be left holding the bag. Also, in the context of what is already a slowing global economy, many countries don’t absorb higher oil prices well.
Flight To Safety
Treasuries for now are benefiting from a flight to safety trade, along with the dollar, rather than being sold on inflation worries. Because the TIPS market trades so thin at this hour of the day, I’ll wait a few hours to see the impact on inflation breakevens.