All of which comes down to: as high as these prices are, and as bad as it is for the general economy, and as long as it would take to clear up even if it all ended tomorrow, it's not catastrophically bad _yet_. It's "significant recession," not "wholesale indiscriminate demand destruction."

Not _yet._

So if you have any opportunities to cut your fossil fuels dependence, particularly in the near term - even just for yourself - it's still a _pretty good time_ to be going about it. I mean, climate change is real so it's _always_ a good time to do it, and even if this _does_ somehow all get resolved tomorrow, _you still win_.

But right now... even more than usual, it's a good time.

Hop to.

(5/5 fin)

#OilPrice #economy #economics

$101+ for WTI combined with a shrinking price gap between WTI and Brent implies that traders (and who they represent) may be making purchases of inconvenient supplies. That, along with rising longer-term futures, say the market's starting to think Trump's Iran mess won't be over real soon.

Traders are by nature mostly severe optimists. It takes a lot to beat them down, but they get there eventually. And anyone who watched Trump's... whatever you'd call it... on Thursday would likely find it _very difficult_ to be an "optimist" about this situation (or his ability to extricate himself from it) right now.

If they decide it's going long enough that there _won't be supply_, then... katie bar the door.

(4/5)

#OilPrice #economy #economics

And that's before real shortages. We haven't hit that yet. Slovenia made noise for starting to ration fuel purchases a few days ago, but that's not about pure supply, that's about keeping a lid on gas-price tourism within the EU.

So we don't have shortages yet. But as strategic reserves draw down, eventually there simply won't be enough oil to meet current demand, at which point only a few things can happen, all of which simplify down to demand destruction.

(3/5)

#OilPrice #economy #economics

Now, I've talked about this as being the 'real price,' as opposed to a speculative 'option' price. And it basically is - but not quite. It's technically a very-near-term buy option, usually quickly executed.

Under normal circumstances, that's a difference which makes no difference. If you're unlucky enough to need to buy on the immediate-delivery spot market, you'll pay a premium, but it's not a big premium and it's not a big deal.

But these are not normal times. Immediate delivery direct-purchasers are now paying a _lot_ more, as in $150-$200 dollars a barrel, with real competition on those bids.

(2/5)

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