Some solid evidence that a potential energy crisis is driving collateral problems. This week when oil prices were routed, some of the collateral pressure abated: swap spreads decompressed as WTI retreated. pic.twitter.com/AOWyjKyN3O
— Jeffrey P. Snider (@JeffSnider_AIP) October 7, 2023
Collateral concerns keep popping up though mostly among the offshore participants. Japanese bills, Italian spreads. Here's another one: USTs held in custody by FRBNY on behalf of foreign mostly official institutions. Those disappear when Euro$ problems show up. pic.twitter.com/wXUsXbmPTN
— Jeffrey P. Snider (@JeffSnider_AIP) October 7, 2023
As geopolitical tensions now spread across the Middle East, oil prices are likely to spike even further.
Meanwhile, the US Strategic Petroleum Reserves (SPR) have 17 days of supply remaining, their lowest in history.
This is roughly half the historical average of ~33 days… pic.twitter.com/QGAspUXsUR
— The Kobeissi Letter (@KobeissiLetter) October 7, 2023