The phone’s ringing off the hook in the last week of a languid summer. It’s CNBC, Fox and even Al Jazeera, all looking for insight from me into how the Syria mess is going to impact oil prices.
What, I’m going to go on TV and give them something better than I’m going to give my faithful? Not a chance. Here’s the absolute skinny on what’s going on in Syria, what I think is going to go on in Syria and how – EXACTLY – to trade it.
First and foremost is that the oil market is not traded in a vacuum where only the fundamental inputs of oil supply are going to be the only things you want to measure. Part of the reason I have continued to tell you for weeks prior to the Syrian dust-up that ALL the risks to oil remained on the upside is because of the action in the rest of the capital markets. The stock market looks like every rally needs to be sold, the bond market is in panic mode with taper talk and Gold hasn’t had its normal stellar year, even though right now it looks like a buy. If you’re a manager looking for a diversifying hard asset, you’ve got little choice but to have been looking at oil and the Syrian/US conflict potential is only a little gas into an already roaring fire.
No matter what happens in Syria, as long as those conditions in the other capital market remain as I’ve laid them out, you still risk more on the upside in oil prices…