A thought about oil prices

Crude oil is selling for about $75 a barrel. To be precise, as of 22 June 2025 the price of a barrel of West Texas Intermediate was $73.84. The price of a barrel of Brent crude was $77.01. [We do not need to concern ourselves now with the question of why there is a difference.]

This is at the high end of the 'Texas tea' recent trading range but does not represent any break-out.

Interestingly, there was no sharp move in response to the election last year of a President of the United States devoted to a platform of "drill baby drill". MAGA ideology might suggest that all the new running-room for the domestic oil industry should produce expectations of an abundance of the black gold, leading to a sharp fall in prices on supply demand grounds.

But no -- those transactions within the $65 to $75 rage just kept on rolling.

Also, if the markets expected a full-on war around the Persian Gulf and, say, the prolonged closure of the Strait of Hormuz the prices for crude would be $125 by now.

But no -- the market is notably unfazed.

I'm not sure why but I find it comforting. Mr Market is telling us not to get too excited.

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