(WCTW) Focus On Where We Are Going
Getting a little too old for this, the battle of the headlines, that's what the oil market is turning into.
I think I speak for everyone when I say that I'm a little too old for this crap. Oil trading is now just a bunch of algos trading news headlines like a ping-pong match. Just two weeks ago, President Biden blurred out "accidentally" that Israel was contemplating a strike on Iranian oil facilities, which resulted in oil surging.
As I woke up this morning (Tokyo), I saw that oil has crashed again following a news report from the Washington Post that Israel will only strike military targets.
I am getting a little too old for this. Geopolitics are nothing but a distraction for the oil market. I have long viewed this as a reason why readers must always keep a close eye on fundamentals to determine whether or not oil prices are overvalued/undervalued. In the case of the oil market today, fundamentals support prices. But this doesn't prevent it from being whipsawed back and forth from the neverending headlines.
But for readers trying to gain clarity on the future of the oil market, I strongly advise you to focus on what's important. While the battle of the headlines won't be ending anytime soon, it represents a great opportunity for those that 1) focus on quality energy businesses and 2) take a longer time horizon.