Oil prices rise to $100/barrel then crater to $85!
- snitzoid
- 1 hour ago
- 4 min read
Short run...chaos and higher oil prices. Long run, Iran will be forced into a position where there economic survival depends on a deal with Trump plus their ability to promote terrorism is greatly diminished.
Perfect no. Will this end up like Venezuela with bad guys in charge, but more willing to make money by ceding to US interests? Probably. It's an imperfect world but one where cheaper oil long term may be the outcome.
WSJ did a recent piece on this which is excellent (link):
The 24 Hours When Oil Markets Went Wild
A 31% price run-up on Iran war fears gave way to an after-hours retreat
By David Uberti, WSJ
March 9, 2026 4:47 pm ET
U.S. oil prices surged 31% after futures opened Sunday, then dramatically reversed Monday, closing 4.3% higher at $94.77 a barrel.
First there was $100-a-barrel oil. Then $110 came and went. Close to midnight Sunday, $120 crude was within reach.
But a frenzied 31% run-up in U.S. oil prices after futures markets opened Sunday evaporated and then some Monday in one of the most stunning reversals of the modern trading era.
The pullback underscores how the war with Iran is scrambling the outlook for the fuel-hungry economy. After investors sold off stocks across Europe and Asia Monday morning, oil prices gave back most of those gains. Benchmark U.S. futures ended up closing 4.3% higher, at $94.77 a barrel.
That helped the stock market in the U.S.—where companies are more insulated from a global energy shock—rally into the close. The gains accelerated after President Trump told CBS News that “I think the war is very complete, pretty much.”
“I’ve never seen anything like this in my 30-year career,” said Rob Thummel, portfolio manager at energy investment firm Tortoise Capital. “It’s hard to gauge when this is going to end.”
“We do have plenty of oil in the world,” Thummel added. “We just need to get it moving.”
The Dow Jones Industrial Average logged an intraday reversal of more than 1,000 points, finishing Monday 239 points higher for a 0.5% increase. The S&P 500 rebounded from early lows to a 0.8% gain. The Nasdaq composite rallied 1.4%.
Tech stocks led the S&P 500 upward, rising 1.8%. Equipment maker Caterpillar, often considered a bellwether for the economy, rose 3.5% to boost the Dow industrials. Nvidia climbed 2.7%.
Before oil’s after-hours retreat Monday, global crude prices were 36% higher than at the start of last week, the largest six-day gain since the first Gulf War. Analysts believe an extended closure of the Strait of Hormuz—a chokepoint through which one-fifth of global oil-and-gas supplies travel—could push nominal oil prices toward records.
“We are viewing this hyper-volatility as but another sign that this price advance is far from completion,” Jim Ritterbusch, president of oil-advisory firm Ritterbusch & Associates, told clients Monday.
Some investors and U.S. officials say the recent run-up in financial markets had outpaced the longer-term threat to the physical supply of oil.
“After the closure of the Strait of Hormuz, things became completely crazy,” Magda Chambriard, chief executive of Brazilian oil producer Petrobras, said in an interview.
Her state-backed company stands to benefit from higher prices for exports, even though it buys some crude from Saudi Arabia. Still, Chambriard said, the curtailment of prolific oilfields lining the Persian Gulf raises the prospect of extended supply issues.
“It’s fast to stop, not so fast to resume,” she said.
Investors initially credited oil prices’ pullback from Sunday night’s highs to reports that several tankers had passed through the strait en route to China, as well as speculation that the Group of Seven advanced economies could release crude from their strategic reserves. Trump’s comments lent momentum to the move.
Officials representing the G7 countries—an informal coalition of the U.S., Canada, France, Germany, Italy, Japan and the U.K.—convened an extraordinary meeting Monday to discuss the possibility of drawdowns.
“We are prepared to take all necessary measures, including drawing on strategic stock reserves, in order to stabilize the market,” French Finance Minister Roland Lescure told reporters after the meeting.
The U.S. Strategic Petroleum Reserve now contains about 415 million barrels of oil, according to the Energy Information Administration, down from its 2010s peak of around 727 million barrels. After President Joe Biden authorized a historic drawdown of the stockpiles in response to Russia’s invasion of Ukraine in 2022, Washington has only modestly replenished the skyscraper-size salt caverns that hold oil across the Gulf Coast.
That stockpile, coupled with record output by American drillers, would likely blunt the impact of any energy shock on the U.S. economy. Shares in U.S. oil majors, Texas frackers, Appalachian gas producers and other energy companies had rallied Monday before reversing alongside Trump’s late-afternoon comments.
After trading deep in the red for most of Monday’s session, shares in major oil consumers rebounded. Delta, United Airlines and American Airlines finished in the green. So did most major rail and trucking companies, as well as FedEx.
As retail fuel prices surge at gas stations across the country, analysts warn that higher-for-longer energy costs could ding U.S. economic growth and buoy inflation, ushering in a dynamic known as stagflation. Some traders have pared back their bets on Federal Reserve interest-rate cuts this year as a result.
The yield on the 10-year Treasury note settled Monday at 4.133%, little changed from Friday.
“The stagflationary tone in markets is broadening,” TD Securities told clients. “But the magnitude of moves has remained limited.”