I sit in enough IRP meetings to watch the risk premiums flow through the models line by line and this thing keeps landing in my lap as a supply security question that nobody has an answer for.
reserves coming down, inventories thin everywhere you look, the SPR keeps getting tapped to shave a few cents off the pump number while the war that put the premium in the curve just keeps grinding, and every headline out of the region sends the front month screaming. the pass-through to rack prices is basically immediate now, you can watch it happen in the same week. my cousin texts me about gas prices like I control the numbers. I keep telling him to take it up with the White House.
every session I'm in, there's no articulated end state, no conditions you could backtest or timeline you could model against, just open-ended exposure and a region that keeps widening. the exit question is the one lever a president can actually pull and Trump treats naming an end state like a concession. every planner in the room knows what sustained backwardation does to hedging costs, but the geopolitical overlay is pure chaos factor, you can't price it, you can only pad it. meanwhile the weapons transfers keep pulling from stockpiles we might need somewhere else, and that risk isn't in anyone's model either.
so is there any mechanism that takes the war premium out of the curve that doesn't run through a president willing to say what done looks like? Or are we structurally long volatility until someone names a finish line?
SPR draws and regional spreads, is there any path to price relief without an exit timeline?
byu/IngenuityTraining380 inenergy
Posted by IngenuityTraining380
1 Comment
Oil’s already come down five bucks a barrel only to come down more this week. You will see 85.
Just be patient