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VRA Letter: Backwardation in Oil Points to Much Lower Prices. Bullish Seasonality Begins “Now”. Tesla; Ready to Go. Falcon Oil & Gas Shareholders Approve TBN Buyout.

  Good Thursday morning. US markets were essentially flat yesterday as they continue to trade on news out of the mid-east and oil prices. After gaining 5% yesterday, oil is up another 6% this AM to $93/b. However it’s the ...

Posted On March 12, 20269 MIN Read
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Good Thursday morning. US markets were essentially flat yesterday as they continue to trade on news out of the mid-east and oil prices. After gaining 5% yesterday, oil is up another 6% this AM to $93/b. However it’s the level of backwardation that continues to stand out, with December oil futures prices trading at just $73/b. While the Strait remains effectively closed, with just 3 ships passing through yesterday (normal is about 60 ships/day) our view is unchanged; US and Israeli forces…joined more and more by Irans neighbors…will (sooner than later) be in a position to solve this problem, which will begin to drive down global oil prices. This war, for all intents and purposes, has been won. This continues to be about the Strait and oil prices.

Because perspective helps, below we see that for more than two years (from early 2022 through early 2024) oil prices remained in today’s range (high $80’s to $100), without do...

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