One of my kids works from home 4 days a week and the other will be less than 4 miles from work. For this I am greatful. Even if gas doubles they can be minimally impacted. Both can shop for groceries and such on their paths to and from work.
On the flip side of the doom and gloom is that some entrepreneurs as re taking advantage of the high fuel prices. A business on a 2 lane a couple of miles from my house opened a shop that has an interesting combination of things. They have milk and farm fresh eggs, cold sodas, chips, snacks, all manner of auto and farm lubricants in small and large jugs and batteries. They also have bundles of tp and pt rolls. It seems they are adding more as time goes on.
Another business opened a produce stand close by, and a neighbor to them is selling local grass fed meat. The wonderful bistro close by will finally re-open.
I am hoping that these places make it. When it costs 10 dollars to drive to the grocery store, you can afford to spend a couple dollars more at a closer shop.
Last week I was hungry for some cereal and found I was out of milk because I had made some double chocolate chip cookies for the old guy the night before. I did without. Next time I can run to the close by shop and grab that one thing. It was not worth 10 dollars worth of gasoline before.
Another factor to add to this list preventing oil price spikes are the “dark transits” of tankers that switch off their AIS transponders to navigate the strait undetected. Dark transit volumes have surged from roughly 0.3 mbd in April to 1.7 mbd in June bringing total transit of ~5mbd transiting through Hormuz which is still only 25% of prewar levels
when will the rug be pulled? Presumably once the reserves are low enough, closer to the mid terms, and demand destruction is no longer enough. September is not a bad bet
Theory: Oil priced on the Futures Market is the result of massive short selling. When prices skyrocket the sellers will declare force majeure. They will get away with it because the US Government is behind the fraud and will claim that it was done in the name of national security, if they address the fraud at all. No big player would/will collect on going long, because nobody fights the gestapo. Perfectly clear, logical situation to me.
