Oil Is Surging Again -- March 20, 2022

Not ready for prime time. This is really poorly written; I am unable to articulate what I'm thinking. I couldn't do it under best of circumstances but I'm distracted by:

• March Madness
• NIT: granddaughter's college team -- Vanderbilt, #4 -- beat #1 Dayton in overtime and advances;
  
• granddaughter's soccer tournament in Phoenix this weekend;
• they lost this evening's game
• Olivia got a yellow card but coach was proud of her; she prevented a breakaway goal
  
• NASCAR;
• beautiful, beautiful weather
• I'm watching women's basketball: #1 Stanford is destroying #8 Kansas, absolutely destroying Kansas; with five minutes to play in regulation time, Stanford is winning 80 to 48;
• books I want to read;
• too many great movies to watch: the new MacBeth on Apple TV; the old Midnight in Paris on Hulu;
• this MacBeth is incredibly interesting;
• Joel Coen movie; Frances McDormand as Lady MacBeth; Denzel Washington as Macbeth.
  
• and all the blogging that needs to be done.

A week ago -- or whenever it was -- when WTI surged almost $10 overnight -- on a Sunday night -- it didn't feel real; it felt very, very surreal. I don't think anyone thought it was "good."

Tonight I see WTI is up almost 3%; up $3.15; and trading at $107.80. Likewise, Brent is up almost 3% and trading at $111.10.

But this time, it feels very, very real.  

Several immediate thoughts:

• the Ukraine-Russian war is not driving the price of oil, except for the sanctions; there is a distinction; I'm too tired to explain what I'm trying to say;
• "inflation" is not driving the price of oil at this point; again, I'm too tired to explain, expand; some folks get it; in the big scheme of things, the price of gasoline is "disconnected" from inflation, either the price of oil causing inflation or inflation driving the price of oil higher.
  
• the "myth" of spare capacity is not a myth
• if this is true, and I think it is, it is the greatest of ironies that just as "we" hit "peak production" in the Mideast, is the exact time that the current administration decided to cut production in the US, as did the Canadians (one word: pipelines)
  
• Saudi Arabia is not taking phone calls from Joe Biden; UAE and Saudi Arabia refused to meet with the US Secretary of State; mainstream media is missing the tectonic changes in the world order
• it seems that a lot of folks are still underestimating the global economy following the pandemic lock down;
• there's a lot of talk about "demand destruction" and a lot of talk about how the price of airline tickets will stymie travel. I don't think so. The high price of Disney theme parks seems not to be cutting down on park attendance. If there's enough money for Disney theme parks, there's more than enough money for gasoline and airline tickets. If a $500 plane ticket now costs $650, folks will find a way of saving $150 somewhere else, or saving less or investing less; it will be interesting to see which industries or sectors are hit hardest by inflation.