Today oil futures soared to nearly $120 a barrel before pulling back as the war in the Middle East continues.
March 9 (King World News) – Peter Boockvar: With respect to the Strait closure and its economic and market obvious impact we know it’s all about the duration and the weekend provided us with no clues on how long it goes on for and if anything, the appointment of Khamenei’s son tells us that the Iranian regime is digging in, thus prolonging the conflict.
What else is there to say that’s new as the big market moves last week continue today. As market and economic participants we are now just a captive of geopolitical events we have no control of.
To a few price points other than crude which we see is back above $100 for both WTI and Brent, the average gallon of gasoline as of yesterday according to AAA, is now at $3.48 vs $2.98 last Saturday. And, as I highlighted on Friday, crop prices are now rallying too. Soybeans are up another 1.5% to over $12 a bushel at $12.19, a level last seen in June 2024. Corn and wheat are each up about 1%. The CRB Food Stuff index is up 5.8% over the past week.
It’s a shame that we used the US Strategic Petroleum Reserve in order to manipulate price rather than it being solely used as a supply disruption backstop which was what it was meant to do but we are where we are down 37% from the peak in barrels of inventory. So, when the Strait eventually reopens, ships start flowing again and prices fall, I do expect countries around the world, including the US, to enlarge, and even newly create for some, their strategic reserves.
We watch to see in coming weeks what the US oil and gas company reaction is to the spike in prices. As of March 6th, the crude oil rig count remained at around the lowest level since September 2021 at 411, up 4 rigs w/o/w. For natural gas, the rig count stands at 132, about 30% above its lows of a year ago but off its highs of a few years ago.
The entire jump in the commodity complex makes the February CPI we’re going to see on Wednesday old news but we can certainly at least parse out the core components to see the underlying trend. Manheim released its February wholesale used car index on Friday and was up .8% m/o/m and 4% y/o/y. Manheim said “Since the start of 2026, we’ve seen mostly solid demand at Manheim with higher sales conversion rates indicating an appetite from dealers to buy. As we progressed through February, we saw prices move higher than usual, especially in the back half of the month. The last week of January and early February threw some winter weather at dealer groups, which they indicated slowed down traffic.”
And, “Now that we are officially in March, with warmer weather ahead across much of the US, we have seen retail demand increasing in our most recent data points – for both new and used sales. The average tax refund is running 10% higher this year, as we hit some of the strongest weeks for consumer filing, and we are expecting to see that translate to more traffic at dealerships in March.”
Of course now though some of those refunds will go towards higher gasoline and maybe food bills along with chilling consumer confidence.
To listen to Alasdair Macleod’s latest audio interview discussing gold, silver, soaring oil prices, the war and more CLICK HERE OR ON THE IMAGE BELOW.
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