Submitted by Peter Tchir, Academy Securities
Another hectic week! This market is not getting any easier to manage.
I want to refocus attention on a subject that continues to come up in conversations and that we tried to address in last week’s report: Stocks & Credit: Cheap but Getting Cheaper? Energy: Not So Much? That subject is why energy prices are still high, if, according to reporting, as much oil is getting out of the Middle East as it was before the war started. We addressed this in detail last weekend, so please refer to last weekend’s report for more details, but here it is, in a nutshell, why these reports are misleading:
- The reports don’t include Iranian oil, which, due to the blockade, has slowed to a trickle. That is probably between 1.5 million and 3 million barrels per day less.
- They don’t account for increased shipping time and shipping costs, helping elevate prices and slow delivery to refineries across the globe.
- It is difficult to measure how much is making it through the Strait, with transponders off. What seems to happen is periodically a “convoy” makes it through, boosting flows, which are then dramatically reduced due to attacks and the time it takes for another group of ships to attempt it.
- Finally, and more importantly, diesel, LNG, and fertilizer are not being exported at even half of the pre-war levels (by even optimistic estimates).
That question came up so often, it seemed important to address it again.
Before jumping into this week’s report, let’s quickly talk crypto. With allegations that a North Korea
