The escalation is showing no signs of stopping in the Middle East. There were reports that Iran targeted Kuwait yesterday and hit a desalization plant and now Iran’s semi-official Tasnim says that the Revolutionary Guard targeted a ship that ignored warning and tried to pass through Hormuz.
Oil is having another big day with WTI up $3.53 to $82.48.
I’m hanging onto reports that Israel possibly leading Lebanon could set the stage for a deal but there’s also a report that the US is preparing to fly more refuelling planes to Israel in order to escalation.
Aside from oil, perhaps the bigger story is the crack spread was the 3-2-1 crack is now above $70 per barrel, the highest in history. That means that even with oil prices at $80, the price of fuel is likely to be as high — or higher — than at the peak of the war. That means the deflation from the May-July drop in crude prices will never reach companies or consumers but instead will be entirely captured by refineries.
This article was written by Adam Button at investinglive.com.