I don't disagree that can be the case. I am more focused on the medium term implications of oil as frackers et al are not bringing on any incremental supply right now. ESG is leading to structurally higher oil prices near term. I think this keeps inflation higher, creeps into consumer behavior and expectation, and keeps the Fed in play. Near term, yes, I think there is 15-20% (finger in the air) geopolitical risk premia in oil that can go away even if Ukraine simply moves to the third page of news. I don't know if this changes the medium term fundamental outlook.
the positioning risk in oil, particularly among CTAs, would appear to be an important risk...slightly lower or slower momentum in oil prices could invite sellers. https://twitter.com/MrBlonde_macro/status/1495420444568023040?s=20&t=gVQB-adpRFNX_DjIH-95Ng
I don't disagree that can be the case. I am more focused on the medium term implications of oil as frackers et al are not bringing on any incremental supply right now. ESG is leading to structurally higher oil prices near term. I think this keeps inflation higher, creeps into consumer behavior and expectation, and keeps the Fed in play. Near term, yes, I think there is 15-20% (finger in the air) geopolitical risk premia in oil that can go away even if Ukraine simply moves to the third page of news. I don't know if this changes the medium term fundamental outlook.