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Shale CEO: U.S. Has Passed Peak Oil

An Unusual State Of Affairs For Oil Markets

Iranian forces made front page oil market news yet again since our last note by seizing a UK-flagged tanker and a British owned tanker in the Strait of Hormuz as a retaliatory measure for the Royal Marines’ seizure of an Iranian cargo earlier in the month. This is an important trend to watch as six tankers and a US military drone have now been attacked, seized or somehow disturbed in the region over the last two months by Iranian forces generating a ten-fold increase in the price of vessel insurance in the Strait of Hormuz. Everywhere we looked early this week we saw headlines of how oil prices and volatility were rallying on the Iran news. Iran also arrested 17 alleged CIA-linked spies this week and sentenced some to capital punishment.

However, we think it’s important to put the recent price gains in context and if we zoom out even just a little bit from the daily headline feed we think the market seems more concerned with China/US relations than Iran/US relations. The first place to look is at Brent prices which, yes, have strengthened in recent trading, but are still lower by about $9- with Brent currently near $64/bbl- since the string of incidents with oil tankers in the Strait of Hormuz started. In the options market, the NYMEX/CBOE WTI volatility has similarly strengthened in recent trading but its current mark near 33.85 is still significantly lower than its run in the mid 40’s back in early June. Lastly, in time spread markets the prompt Brent…




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