Monday, September 16, 2019

War, Rumors of War and the Difference Between Bitcoin and Oil

Ha!
After word of the attacks on Saudi oil infrastructure started to spread I found myself thinking about Saddam Hussein's invasion of Kuwait. And apparently I wasn't the only one.
A quick note on sources: We really, really try to avoid going to a publication more than once per day but sometimes ya gotta.
First up, the FT's energy editor::
'Well, there are bids $6 a barrel above New York's close'
'And where are the offers?'
'There aren't any offers'
All the more oddly relevant because of the echo of a conversation, also on a September 15 recounted in last year's "What other reserves have we?":
That was Churchill's question to Air Vice Marshal Keith Park on the penultimate day of the Battle of Britain.
On 15 September 1940 the Germans attempted to draw the Royal Air Force into a battle of annihilation with their largest and most concentrated daylight attack against London. They sent 620 fighters and 500 bombers against the R.A.F's 660 fighters.

September 15, 1940 was also the day that Churchill had decided on to visit the headquarters of Sir Keith Park, commander of Fighter Command's 11 Group which protected southeast England i.e. where the German's were headed.

At 2:35, Churchill, who had been watching the plotting table where the waves of bombers coming in since 10:10 were depicted, noticed that all the red light bulbs that denoted RAF fighter squadrons in action were lit and asked the famous question, "What other reserves have we?"

Park's reply:
"There are none."
And from FT Alphaville's editor, Izabella Kaminska:
Forget trade war, a 20% move implies real war
This was the early-market response to news that Saudi oil facilities had been struck by a suspected Iranian/Yemeni rebel drone strike:

As the FT noted:
Oil prices rose as much as 20 per cent to above $71.00 a barrel — the biggest percentage spike in almost three decades — as markets reopened after an attack on Saudi Arabia’s oil infrastructure at the weekend cut more than half the country’s production.
That’s one of the biggest moves in Brent prices in dollar terms in a single session in a very long time, if not ever.* And for the commodity markets that’s a big deal. Huge, in fact. 
Traders on the winning side of the bet will be laughing all the way to the bank right now. But there’s going to have been some serious fallout on the other side. We don’t know the extent to which natural producer hedgers and systematic funds will have been hit, but it’s likely that in the days and weeks to come some extraordinary details will emerge about the bloodbath that took place on the back of that single move....
....MUCH MORE
Okay, that has to be the last FT link for today. I don't care if Mr. Powell or Ms Kelly come dancing in with the scoop de scoop scoop We must maintain discipline and hold off, at minimum until tomorrow for another link.
I lied. Arrrgh.
Neil Hume informs us the Oil Liveblog is back up and running. But this time I really mean it.
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