Don't screen yourself off from reality

Today starts with markets in a positive mood, stocks up in Asia, bond yields down slightly, and Brent oil down around 7% to $97.5. Yet don't screen yourself from reality. As underlined before, the price of energy on a screen currently has no relation to its actual availability in different forms in certain geographies. The Philippines just declared a national emergency to conserve fuel; South Korea is curtailing private driving; Slovenia has introduced rationing; and the boss of Shell is quoted saying Europe will face fuel shortages within days (see "Where Demand Destruction Is Greatest ").

Iran, via its parliamentary speaker Ghalibaf, whom the US is now negotiating with, also makes this clear: "We are aware of what is happening in the paper oil market, including the firms hired to influence oil futures. We also see the broader jawboning campaign. But let's see if they can turn that into "actual fuel" at the pump - or maybe even print gas molecules!"