Submitted by Bob P.
Guest Post by Mark
David Woo, former Bank of America’s Head of Global Interest Rates, Currencies and Emerging Market Fixed Income, is still long oil. He sees no clean exit for Trump. Iran wants Brent at $100–$120 to crush U.S. stocks. Markets are still pricing an easy off-ramp that may never arrive.
THE OIL REALITY
Very little traffic is moving through the Strait of Hormuz according to official and Kepler numbers.
Tankers loaded with Saudi oil in the Red Sea have been turning north through the Suez Canal into the Mediterranean since the Houthis stopped attacks after August 5.
European physical crude is not tight right now because of this rerouting.
That temporary relief is the only reason Brent sits near $89 instead of much higher.
THE IRANIAN PRESSURE PLAY
Iran’s clear objective is to push oil as high and as fast as possible.
They would love $100–$120 Brent to drive the U.S. stock market down hard and force Trump’s hand.
Woo expects Tehran to lean on the Houthis or Iraqi proxies to restart Red Sea tanker attacks soon.
If those attacks resume, the current rerouting ends and the oil spike arrives.
THE CHINA LEVERAGE
Trump has almost no remaining economic pressure left except massive fines on Chinese banks and refiners for any Iranian oil purchases.
If he takes that step this week it is bullish oil and bearish for stocks.
China has already signaled it will retaliate using critical minerals and refining capacity the world needs.
Woo sees no easy U.S. leverage in that confrontation.
BULLISH GOLD: THE BIGGEST U.S. STRATEGIC DEFEAT IF TRUMP DOES TACO
Accepting those terms would go into the history books as the worst presidential defeat in modern times.
The U.S. spends a trillion dollars a year on defense while Iran spends roughly $10 billion — and still cannot finish the job.
Non-Americans already see this strategic defeat as inevitable and are positioning to sell the dollar aggressively.
That outcome is directly bullish for gold and deeply bearish for the U.S. dollar.
The military-industrial complex would find such an embarrassment almost impossible to tolerate.
THE BOTTOM LINE
Trump is trapped between accepting historic defeat or risking a wider conflict that sends oil sharply higher. David Woo is staying long oil because he finds it extremely difficult to see any other clean ending.
This is the setup markets still refuse to price.
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[ H/T The Burning Platform ]
Guest Post by Mark
David Woo, former Bank of America’s Head of Global Interest Rates, Currencies and Emerging Market Fixed Income, is still long oil. He sees no clean exit for Trump. Iran wants Brent at $100–$120 to crush U.S. stocks. Markets are still pricing an easy off-ramp that may never arrive.
THE OIL REALITY
THE IRANIAN PRESSURE PLAY
THE CHINA LEVERAGE
BULLISH GOLD: THE BIGGEST U.S. STRATEGIC DEFEAT IF TRUMP DOES TACO
THE BOTTOM LINE
Trump is trapped between accepting historic defeat or risking a wider conflict that sends oil sharply higher. David Woo is staying long oil because he finds it extremely difficult to see any other clean ending.
This is the setup markets still refuse to price.
Tweet
Continue reading...
[ H/T The Burning Platform ]
