Michael Hartnett
Chief Investment Strategist, Bank of America Global Research
Ticker
Side
Mentions
Opened
Entry
P&L
Thesis
Theme
Source
Long
Mar 19
$117.36
+20.2%
Hartnett states the current oil shock is a supply shock (vs. 2008's demand shock) and draws parallels to the 1973/1979 crises. He says the market is coming into this thinking it will be short-term, but it may not be. A protracted supply disruption in the Strait of Hormuz or to physical infrastructure would force prices exponentially higher to destroy demand and rebalance the market. Higher oil prices are needed to force a policy or diplomatic solution. The risk is prices go to $150-$200 if the conflict is measured in weeks, not months. A swift diplomatic resolution or ceasefire that quickly restores supply flows.
Hartnett states the current oil shock is a supply shock (vs. 2008's demand shock) and draws parallels to the 1973/1979 crises. He says the market is coming into this thinking it will be short-term, but it may not be. A protracted supply disruption in the Strait of Hormuz or to physical infrastructure would force prices exponentially higher to destroy demand and rebalance the market. Higher oil prices are needed to force a policy or diplomatic solution. The risk is prices go to $150-$200 if the conflict is measured in weeks, not months. A swift diplomatic resolution or ceasefire that quickly restores supply flows.
Energy
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