Every now and then I like to take a step back and see how macroeconomic and geopolitical events are shaping our world. Currently, the biggest thing that concerns me is not the Fed and interest rates, but energy.
While investors and TV analysts waste their time arguing about a pause or no pause in rate hikes, an energy crisis situation is brewing…
- Tensions in the Middle East- ie, Iraq and nuclear weapons; Iran threats; Hezbollah. The U.S. is a bit nervous about these oil producing countries. But not to worry, we have our own oil in Alaska, right?…
- BP North Slope Shutdown- the largest oil field in the U.S. got shut down today due to corrosion. This sent oil up $2! Obviously, investors are nervous on the news, and they should be, because an event like this means the U.S.’s backup plan is falling apart.
- South America- great, just great… turns out Cuba has oil. Unfortunately, the U.S. has a strict embargo with that country so that doesn’t mean anything to us except frustration. Then there’s terrorist in South America who came up with the clever idea of disrupting oil production by attacking pipelines.
So, isn’t it interesting that many of the U.S. enemies have what we want- oil. I’m no oil expert, but I think it’s pretty obvious that if oil keeps trekking up, the market will be rough.
In the meantime, keep BP and BPT on your radar.
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