Energy prices are almost certainly headed higher in the years ahead. Investing in oil and energy stocks is one of the most obvious investment decisions you can make.

From late night to early morning on the 4th, a series of new reports on the Middle East situation intensified pressure on market sentiment. 🇮🇷 Iran has maintained a hardline stance on nuclear negotiations and claimed to have attacked U.S. vessels in the Gulf of Oman. 🇺🇸 Meanwhile, President Trump made remarks hours later aimed at calming markets, but these had little effect on improving investor sentiment. 📈 Furthermore, the Fed’s Beige Book indicated that inflationary pressures have risen due to the Middle East conflict, and several Fed officials have continued to adopt a cautious stance on inflation and interest rates. ➡️ These factors have supported a stronger U.S. dollar and weighed on overall market sentiment. Markets are gradually losing faith in Trump’s statements themselves and may be approaching a phase where they react only to Iran’s actual actions.

Jeff Currie, former Goldman Sachs head of commodities and now at Kalo writing research, is watching a physical supply shock in the commodities market. This is a tale of two markets. Paper crude oil was sitting around $100 a barrel while physical crude being delivered into Asia was trading between $130-$170. Products like jet fuel were spiraling above $200. The spread between paper and physical has completely disconnected. On the physical side: a discount airline out of London Gatwick canceled all flights because they couldn't source fuel. The UK just took its last known kerosene shipment with no further arrivals scheduled. Singapore jet fuel spiked to $230 a barrel. Rotterdam hit $220. The shortage is now in Thailand, Philippines, New Zealand and Australia. Currie called it "molecular contagion." And here's the critical point: there is no policy fix for this. The supply shock is roughly equal in magnitude to the COVID demand shock. And we all watched what COVID did to global supply chains. Currie's framing: the paper markets have disconnected from reality. When crude is trading at $100 on NYMEX but delivering into Asia at $130-170, someone is wrong. He thinks it's the paper market. The mispricing window doesn't stay open forever. For macro investors, this is exactly the kind of dislocation between financial prices and real-world supply chains that historically creates the biggest moves.

Gold has returned to its upward trajectory, benefiting from a decline in the U.S. dollar and lower bond yields. All markets are closely watching developments in peace talks between the U.S. and Iran, particularly with discussions emerging about the possibility of a comprehensive diplomatic agreement that could ease tensions and reopen the Strait of Hormuz. Any positive development in this matter could significantly shift market sentiment in the coming period.

🇺🇸 U.S. Initial Jobless Claims were released. ✅Actual: 225k ⏳Expected: 215k 🔙Previous: 215k

Regular reminder that Fogo’s inflation is a fixed 2%. The @fogo validators seem to be doing a better job than the Fed at hitting that target. Nice job. Back to more important things...

US Initial Jobless Claims 🚨 Actual: 225K Forecast: 215K Previous: 212K

🛢️ Goldman CEO warns high oil prices could alter consumer behavior in second half of 2026

⚠️ Higher import costs could soon hit consumers hard. Global tensions and supply chain pressure are starting to show up in everyday prices. #China #USA #Inflation #Economy #Markets