Jeffrey Snider, one of the sharpest macro analysts tracking this conflict, breaks it down for me:
WTI September is at $92, Brent over $100, but out to December the price drops to $80, and by June next year it falls to $72 or $73.
That isn't the market saying this ends soon.
That is the market saying the near-term scramble for oil is real, and demand is going to collapse under the weight of it.
"The longer this goes on, the chances of something actually breaking in the real economy just go way up, and it goes up not linearly, it goes up exponentially."
On the oil price manipulation theory, that Trump is feeding false optimism to algorithms that trade 70% of oil futures, Snider is no longer skeptical:
"You got to give the Trump administration credit for their political objectives, they have every incentive to make sure oil prices don't get out of control."
On Iran's restraint: both sides are going incrementally because neither wants to say screw it and go all out.
But eventually, someone usually does...
Great chatting with @JeffSnider_EDU
