Dima Drobiazko
425 posts

Dima Drobiazko
@DrobiazkoD
SPX/futures trader, ex-soldier, logistics and SAP specialist. I trade w/o stop losses.








Before the war, the world was producing about 100M barrels of oil a day, and consuming about 100M barrels of oil a day. Now the world is producing somewhere between 85M and 90M barrels of oil a day. That means somebody has to stop consuming 10M to 15M barrels of oil a day. Economists call this demand destruction. The market has a very efficient way to get to this reduced level of demand, it raises the price forcing marginal buyers to stop consuming oil. But if government subsidize the current high price of oil, the demand does not change and the market price has to go higher in order to get that demand destruction. I’m all in favor of lower oil prices like everybody else, but we’ve got a supply demand imbalance that needs to be brought into equilibrium. So either open the Strait so we can get back to 100M of oil a day, or figure out another way to tell the equivalent of 10m to 15M barrels of oil a day that they cannot go to the gas station to fill up their car.


The world is about 2" away from hitting the wall at full speed and most can't even seen it coming. Imminent energy shortages in parts of the world and for the rest, significantly higher prices. The battle for the physical barrel has begun.



So the Move index collapses, The VIX closes lower for 4 straight weeks, oil futures lower for the next 6 months, the S&P closes above the downtrend channel and to top it off we had a huge bearish to bullish reversal today on bad news. Don’t fight the tape unless those conditions change. It’s really not complicated.





BREAKING: Iranian Foreign Minister Araghchi claims the U.S. & Iran were "just inches away" from an agreement before talks fell through.










