Useless G7 Statement Calms Oil Futures for Now. Retest Coming?
Oil futures sank after touching a four-year high, now up 6 percent after rising 30 percent.
G7 Statement
Group of Seven finance ministers issued a statement after a virtual meeting Monday, saying:
- “We will continue to closely monitor the situation and developments in the energy markets and will meet as needed to exchange information and to coordinate within the G-7 and with international partners.”
- “We stand ready to take necessary measures, including to support global supply of energy such as stockpile release.”
Please consider G-7 Ready to Release Oil Stockpiles If Needed to Support Supply
Group of Seven finance ministers said they were ready to take any steps needed to support global energy supply, including releasing strategic oil reserves.
“We will continue to closely monitor the situation and developments in the energy markets and will meet as needed to exchange information and to coordinate within the G-7 and with international partners,” the group said in a statement. “We stand ready to take necessary measures, including to support global supply of energy such as stockpile release.”
G-7 finance ministers held a virtual meeting on Monday to discuss the conflict in the Middle East, its impact for regional stability, global economic conditions, and financial markets, and the importance of secure trading routes.
The heads of the International Monetary Fund, World Bank Group, Organisation for Economic Co-operation and Development, and International Energy Agency took part in the discussion.
My Reaction
So what?
Monitoring the situation is meaningless. Opening the Strait of Hormuz is what matters.
Even then, so much of the supply chain is damaged and it will be at least weeks before things are back to normal.
Higher prices will last for a long time. And if the strait is not opened, we will see a retest of the high today, if not higher.
Trump’s Plan of Action
This will work for about two days.
For further discussion, please see Crude Jumps By $25 to $115 in Biggest Oil Crisis Since 1970s
An Amazing Parlay
Trump created a crisis in oil, natural gas, aluminum, fertilizer, jet fuel and water, all at once.
This is not an easy feat. Mere mortals would have struggled to do this,
Might I suggest the Nobel Peace Prize?