|
Getting your Trinity Audio player ready...
|
The media, as I noted earlier, remains disappointed that oil prices didn’t shoot up. So do the WW3 influencers who were promising us that oil prices would crush the economy.
Didn’t happen. Why not?
One answer is that the oil markets weren’t on Twitter. The smart money was that it would be a short war and American involvement would be even shorter. Every influencer pretending otherwise was not very bright or very malicious. And those pretending that their tweets changed everything would have to explain why not much happened with oil prices.
A second answer though is that despite public condemnations, the Saudis had deliberately worked to protect oil prices early on to make this possible.
There are some very smart people working in the oil industry, as the industry can afford to pay well.
Occam’s Razor – the simplest explanation is often correct – applies to this brief comment that makes sense. There is a third reason: the US is no longer throtling oil production but going all out “drill baby drill.”
The global market for crude oil has never cycled in sync with superficial expectations, because, as the article points out, the traders whose deals make the market don’t get their news from Twitter.
The oil market is certainly inelastic, while also serving to undergird the value of the US dollar…but always responsds to material disruptions…not rumors.