You know the game where you try to quickly pull your hands away before they get slapped? WTI prices are this game in chart form.
In the real game, you rest your hands palms down on top of your opponent’s hands, which are palms up.
Your opponent then tries to slap the top of one of your hands before you can pull away.
It’s hilarious to both play and watch.
My boys like to challenge me when they’re bored. Really good times.
Why is it so funny?
Because you can get your opponent to quickly pull their hands back in fear with the slightest sound or movement (but not of your hands!).
I like to ask “What?” in a really sharp voice, and the boys snap back thinking I’m about to strike.
It’s a little more perverse than I expected now that I type it out. Oh well.
My point is, oil price speculators are so scared of getting slapped by a true Iranian peace deal that they’re pulling back at every social media post or headline that even gestures toward a resolution.
We can see it in chart form below, which shows the year-to-date WTI price history.
It’s not irrational behavior. Far from.
These prices can, and likely will, rapidly unwind as soon as the Strait of Hormuz reopens for real.
The problem?
No one knows when that’ll be.
No administration enters military conflict expecting to get dragged into a years’ long entanglement.
It just happens, as the other party to the conflict responds and goals shift.
Every indication is the Trump administration wants a near-term resolution of this conflict.
And markets are taking them at their word, rapidly pulling back their hands at every sneeze or headshake the politicians give them.
If you don’t believe me, just check out the price chart.
