6/20/2025
Crude Oil Up 25%
Brent oil futures settled Thursday at their highest value since June 22 pushed by conflict in the Middle East
WSJ today
West Texas Intermediate traded at $60 May 19. This morning July delivery is trading at $75. The $15 jump since then has raised the price 25%. And energy and service stocks have rallied. Expanded drilling occurs when firms believe the new well will improve their bottom line. That is what a $15 increase will do.
But, not so fast. So far, nothing has happened to decrease the supply of oil. The Israelis have not bombed Iran’s tanker export center. Transocean RIG gained 50% since its April low. It has backed off its $3.35 high to trade at $2.94.
As in the 1930s, there are isolationists like Marjorie Green and Tucker Carlson who oppose any US involvement. Menachem Beg, Prime minister of Israel in 1981, set a precedent. No enemy of Israel would be allowed to go nuclear. He sent F 16s to destroy Sadam Hussein’s attempt to build a reactor. Rather than being applauded for protecting his country, he was criticized by no less than then President Ronald Regan. The F 16s were for defensive not offensive purposes. But as Begin said, we may be criticized but at least we will survive.
Netanyahu has now done the same by attacking Iran’s various nuclear sites. But the Fordow complex remains. Located some 200+ feet under a mountain, it eludes Israeli attack. Only the US has a 30,000 pound bunker buster bomb capable of reaching the underground site. President Trump says he will decide in two weeks whether to attack.
It is clear that Putin saw the green light on an Ukraine invasion when Biden withdrew from Afghanistan. We are now at a similar moment. Moscow and Beijing are certainly watching to see what the US will do. Iran has been the chief architect of terrorism since the Shah of Iran was replaced by the Mullahs. Whether the US will continue to support Ukraine or would aid Taiwan in the event of an attack is on the table. In this case, the whole world is watching.
The stock market is going nowhere in typical summer fashion. All the money injected by the FED during Covid will yet cause problems. White House and FED claim inflation has cooled. In fact, the rate increase in inflation is down. Prices are still high.
Equal weight stock indexes are slowly falling. Microsoft cuts its workforce by several thousand. Amazon struggles to improve its revenue per employee. The demand for warehouse pickers and delivery drives make that difficult. The stock market has yet to commit to a definite direction.