When It Rains, It Pours -- Busy, Busy, Sunday Night -- September 15, 2019

End of second full day following the strike:

• except that the price of oil jumped (and to tell the truth, I don't think it jumped as much as folks thought it would), one could hardly tell anything happened in the Mideast over the weekend
• some compared it to Pearl Harbor: based on events today, the attack on Saudi Arabia compares not at all to Pearl Harbor
• egged on to do something, Trump seems relaxed, sitting back, watching; keeps his schedule; attends New Mexico rally as scheduled
• US stock market down slightly but futures are green for tomorrow
• the attack on Saudi: almost a non-event

Original Post

 

Most fascinating: to see the price of gasoline at your neighborhood service station tomorrow

• for the record, the price of unleaded regular was running $2.16 to $2.39 here in north Texas
• along the highway, higher-priced stations, here in north Texas (DFW area): $2.39
• I filled up for $2.16/gallon this morning in downtown Keller, TX, well away from the highways

Mideast on the brink. Story tracked here. There are so many story lines:

• timing of the attack
• more and more stories that Iran's economy was ready to implode due to US sanctions
• Iran announced as recently as this week that it would pursue "speedier centrifuges": Iran admits to using advanced centrifuges, violating nuclear deal
• time to "take out" Iran?
• EU's "gut check": side with Iran or side with the US 
• Iran admits it is intentionally violating the "nuclear deal"
• Saudi getting ready to announce Aramco IPO
• Israel's Netanyahu on the ropes
• Brexit
• Bolton "fired"
• new "Alfalfa" in place for just one week (the step-brother to the heir to the throne; another son of the king of Saudi Arabia)
• US 2020 presidential campaign has begun
• son of Osama bin Laden confirmed killed in Afghanistan this past week
• Trump's determination to withdraw from Afghanistan
• the decision NOT to meet with the Taliban at Camp David 
• US Federal Reserve under pressure to cut rates
• global oil market 
• attack could settle the argument: is US shale the swing producer?
• during Mideast hostilities, Saudi Arabia may not be the swing producer
• September and October (2019) production data won't be seen until December, 2019 and January, 2020
• price of oil: what pundits are saying
• even if terminal "back to normal," risk premium is now $5 - $10/bbl (forever and ever, amen)
• if terminal takes more than a week to return to normal, think $75 WTI
• if terminal takes a month to return to normal, think $100 WTI
•  military: just when you thought it was safe to reduce US troops in the Mideast 
• will Trump listen to US generals or will Trump go it alone?
• exactly who is in charge of the US military? -- quick, name the Secretary of Defense  
• US intelligence agencies
• fake news
• credibility issue
• exactly who is in charge of US intelligence? -- quick, name the new national security advisor
• geopolitics
• Saudi Arabia's response is almost a "lose-lose" proposition
• "turn the cheek" and "let it go": risks looking weak
• military response: push the Mideast into an all-out war

Rahm Emanuel: "never let a crisis go to waste." Issues that should be affected by the attack on Saudi's oil terminals and oil field

• opening Alaska to drilling
• pipelines: Keystone, DAPL, others
• US Federal Reserve decision to go rogue, or stay the course
• Bernie, Pocahontas, et al: ban fracking
• this is the time for Trump to emphasize that the Dems want to ban fracking 
• he won't get many opportunities like this

Nominee for 2019 Geico Rock Award: IEA

• IEA: "the US shale revolution has reshaped the energy landscape at home and abroad, according to latest IEA policy review"
• note: I consider the IEA an extension of OPEC, the EU, WTO, and the UN
• Nominees for the 2019 Geico Rock Award: here;
• Geico Rock Award nominees for 2018
• the winner of the 2018 Geico Rock Award: Robert Rapier 
• the IEA, as a nominee for the 2019 Geico Rock Ward --the timing of this report, that "the US shale revolution has reshaped the energy landscape at home and abroad" is simply too much -- I can't make this stuff up:
• the price of oil -- at $50 to $60 -- is an existential issue for Saudi Arabia (and, thus by extension, a huge, huge deal for the EIA)
• sanctions on Iran did not drive up the price of oil; US shale more than made up for any shortfall
• the Libyan oil story is irrelevant (as are the oil stories of several other legacy oil providers)
• Iran was about to implode
• Venezuela was about to implode (of course, we've been saying for a decade now)
• Mexico was about to implode
• the IEA statement released September 13, 2019
• the attack on Saudi Arabia: September 14, 2019; 04:00 a.m. local time