evening wrap
market vibes
January 13 …)
"Spiking the cannons" means to deliberately disable a cannon by hammering a metal spike into the touch hole, effectively rendering it unusable, usually done by a retreating army to prevent captured cannons from being used against them by the enemy; it's a metaphor for taking action to deliberately sabotage or prevent something from being used effectively
US oil sanctions shut in oil tankers around the globe
February WTI (1st chart) led the oil market higher again this morning, leaping $2.50/barrel on Biden and Yellen’s potpourri of Putin hate. Likely to be pro-Russian anyway, it’s certain to be bad for American consumers if the squeeze accelerates into winter.
A crude squeeze ruins margins for domestic refiners (2nd chart) and raises global oil prices, for which Russia is either the second or third largest exporter (neck and neck with America). This rally is doing nothing for XOM, CVX, PSX etc.
The world needs Russian oil. Shutting in Russia raises prices for buyers that use strong dollars at multi-year highs to pay for it and makes inflation worse. The markets will buy Russia’s oil at a discount from China or some other middleman, and Russia won’t stop selling it.
Feb/March front spread daily data.
The spot gasoline crack is trading at 10.70. The ATL for COVID was 9.80.
However, Barker Hughes is trading at five-year highs on heavy ITM 41 call buying. Analysts at Susquehanna are lifting targets to 53. The only people buying oil drills are companies that plan to use them.
Next up: crypto futures, stocks, bonds, FX, gold, and grains… and the vibe with a scary chart, I think. I could be wrong but it’s a perfect parabola of trillions.
