'Small Price To Pay': Trump Says Surging Oil Prices Will 'Drop Rapidly' Once Iran Nuke Threat Over
It seems someone tapped the President on the shoulder given this afternoon's explosive opening in futures and he has posted X that spiking oil prices are a "small price to pay" for world peace, adding that prices "will drop rapidly" once the Iran nuclear threat is over.
It's Sunday night and the much-hoped for de-escalation has not happened.
This has triggered an explosive move higher in WTI...
...topping $110 for the first time since June 2022... (Goldman nailed that call)
US equity futures have dramatically 'broken the box'...
Treasury yields are up 5bps, recoupling modestly from Friday's 'weak jobs decoupling'...
Gold is down, the dollar up, and crypto ugly.
For all the color you can eat on Iran-related market angst, the following posts should help:
'Everything You Knew About The Market Flipped This Week': Top Goldman Trader
Hartnett: US Politics Dictate March De-escalation To Iran War
'10 Sigma': Goldman's Hedge Fund Honcho 'Level Sets' After Extraordinary Week
Goldman Panics, Expects Oil To Hit $100 Next Week And Reach "Demand Destruction" Levels
And don't forget there is a lot more risk than just Iranian stress:
Insurance Companies Crushed As Private Credit Contagion Spills Over
Deutsche Bank Warns Energy Shock "Existential Threat" To Airlines, May Force Some To Ground Fleets
These moves come as the Trump administration said it is not prioritizing using the US Department of the Treasury to trade oil futures as it weighs ways to ease surging global energy prices, according to Yahoo Finance.
Officials have considered having Treasury buy or sell energy futures, but believe the agency would have limited ability to move such a large and active market.
Daily trading volumes have surged during the recent conflict, diluting the impact any single participant could have.
The White House is also reluctant to immediately tap the Strategic Petroleum Reserve.
Heavy drawdowns under former president Joe Biden left the reserve about 60% full, while repeated withdrawals have created maintenance issues.
Still, officials acknowledge that even a modest release could send a strong signal to calm markets.
Domestic gas (pump) prices soaring (and are about to go even higher)...
The report says that the administration is reviewing a wide range of responses.
Doug Burgum said “everything is being considered,” from immediate steps to longer-term measures, as officials try to contain rising fuel costs that pose both geopolitical risks and political pressure ahead of November’s midterm elections.
$5 gas prices at the pump is imminent!!
Given the current moves we are seeing, we suspect that laissez-faire attitude will shift rapidly and some kind of intervention is imminent.