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Good Idea for Sunday: Fill up Your Gas Tanks

Today’s Campaign Update
(Because The Campaign Never Ends)

Everyone should go to the gas station and fill your tanks today. – There’s no need for panic, but you might save a little money by doing that.

The attack on Saudi Arabian refining and other oilfield infrastructure by Huthi rebels supported by Iran Saturday has forced the Saudi government to shut-in half of its daily crude production. That amounts to about 5.7 million barrels of oil per day (bopd) suddenly disappearing from the global, 100 million bopd market.

Unlike the series of previous Iranian attacks on crude tankers, drones and other facilities that have taken place since April, this one is a big deal. Because none of those previous acts disrupted a significant amount of oil production or movement, crude markets had no measurable reaction to them.

But 5.7 million bopd is a huge quantity of crude, a volume that far out-strips the ability of the few countries with idle capacity to offset. Although the Saudi government attempted to assure markets that it would be able to return to normal production levels by Monday, Reuters quotes a “source close to the matter” as saying that recovery from Saturday’s drone attack will take “weeks, not days.”

Regardless of which case is accurate, it is likely that oil prices will spike to some degree when Asian markets open for Monday trading late this afternoon simply based on the uncertainty of the situation. How high it will spike is anyone’s guess, but a supply disruption of this magnitude could lead to something very significant.

Gasoline prices in the U.S. fluctuate with the global price of crude, so any spike in the oil price is going to quickly feed down to higher prices at the pump. Don’t complain to me – that’s just how the market works.

The rhetoric flying following Saturday’s attacks is also significantly harsher than what we saw following Iran’s previous hostile actions. Secretary of State Mike Pompeo issued the following pair of tweets Saturday afternoon:

Iran’s foreign ministry spokesman Abbas Mousavi told Iranian state television that the U.S. accusations were “pointless” and that his country stands ready to conduct “full-fledged war,” according to Reuters.  Reuters also quotes an Iranian military official as saying, “Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles.”

President Donald Trump has rejected counsel from some advisors to mount military retaliations after previous Iranian provocations. After these latest attacks, the President called Crown Prince Mohammed bin Salman Saturday evening to pledge U.S. “readiness to cooperate with the Kingdom, by all means conducive to maintain its security and stability.”

All of this back-and-forth between the involved countries, combined with the Reuters report serve to increase uncertainty. And if markets hate anything, it is uncertainty.

Again, there is no call for panic here, but the best thing for readers to do when they get up and dressed this morning is to drive over to the nearest gas station and top off the tank. If you wait to do it tomorrow, you might be sadly surprised at the price you’ll have to pay.

That is all.

 

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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7 thoughts on “Good Idea for Sunday: Fill up Your Gas Tanks

  1. Jimmy MacAfee - September 15, 2019

    Thanks, Dave!
    War with Iran is inevitable, because they’ve become Insanians instead of Iranians.

    G0D help the real people of Iran; the leaders are lower than T. Gondii.

  2. jakee308 - September 15, 2019

    I’m guessing it won’t be quite as bad. The Saudis have long had the ability to ramp up or down their oil output for various reasons that are after the refining/filtering process. the refinery may not recover so fast but they can tap other sources quite quickly and the oil market knows it. I would guess from the current 54.82 a jump to maybe 55 to 57.

    1. Jimmy MacAfee - September 15, 2019

      Escalation is the thing. The Saudis may resolve this quickly, and gas prices will go up briefly. But an attack on international oil is an attack on international oil. The pot is stirred; the hornets’ nest struck. This is what to prepare for, not just the repercussions of the attack.

      1. Jimmy MacAfee - September 15, 2019

        Even if the attack might have been a false flag…

  3. Jimmy MacAfee - September 15, 2019

    https://www.washingtonexaminer.com/policy/defense-national-security/act-of-war-mattis-says-obamas-inept-response-to-cafe-milano-bomb-plot-emboldened-iran

    Iran has gotten away with so much stuff, it’s time to re-examine everything.
    After they humiliated our Naval crew, and Obama cowered in the Whitehouse and did nothing, and after provocation after provocation, we need to look at escalation beyond sanctions.

    They have sleepers, but we have allies.

  4. phineas gage - September 15, 2019

    It means Iran is getting desperate as the sanctions tip the regime toward collapse, so they are now lashing out. I would anticipate further terrorist acts. This drive the Saudi-Israeli alliance even tighter.

    Time to squeeze their balls harder, with the appropriate targeted response if deemed necessary.

  5. Bill in Lexington,NC - September 16, 2019

    Rats … I filled up yesterday. Glad I don’t have to do a long daily commute any more. I can get by with about 2 miles a day.

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