Today we had the pleasure of hosting Giacomo "Jack" Prandelli, Founder of The Merchant’s News Substack. The Merchant’s News covers oil, gas, LNG, metals, and geopolitics, with a particular focus on global trade flows, commodity markets, and the macro forces shaping energy prices. Jack is a former commodities trader who has built a large global following on LinkedIn and X through his data-driven analysis of rapidly evolving geopolitical events and energy markets. We were pleased to visit with Jack to discuss the Strait of Hormuz crisis, the resilience of global oil markets, and the evolving geopolitical forces reshaping the global energy landscape.
In our conversation, Jack explains why he believes oil prices have been far more resilient than many expected despite the Strait of Hormuz crisis. He walks us through a few charts and outlines how coordinated releases from strategic petroleum reserves, a stronger-than-anticipated recovery in global oil flows, and increased production from the U.S. and Middle East producers helped offset supply disruptions. We discuss the evolving balance of power in global energy markets, including the growing influence of U.S. production, China's role as the world's largest oil importer, and what the conflict revealed about OPEC, strategic petroleum reserves, and the resilience of the global energy system.
Jack outlines why refining, not crude supply, has emerged as the market's primary constraint, how Russian refinery attacks and China's inventory strategy have reshaped global energy flows, and why he believes the market remains structurally bullish over the longer term. We also explore the shift toward energy security, deglobalization, and the changing geopolitical landscape as countries increasingly prioritize control over energy, refining, and commodity supply chains. We greatly appreciate Jack for joining us and sharing his insights.
To start the show, Mike Bradley noted that fixed income markets continue to trend higher, with the 10-year Treasury yield rising to ~4.62% and the 30-year Treasury yield reaching ~5.14%. Both benchmarks are nearing the peak levels seen during the height of the Iran war, highlighting bond market concerns around inflation. On the broader equity market front, the S&P 500 was up just under 1% for the week to date, while the Dow Jones Industrial Average was Tuesday's standout performer, gaining ~400 points on strength in industrial stocks, led by 3M, whose shares surged ~8%. Several high-profile companies are scheduled to report results this week, including Alphabet (Google), Tesla, IBM, Intel, and NextEra Energy.
On the oil market front, Brent crude was trading at ~$91/bbl, up ~$3/bbl for the week and ~$15/bbl over the past two weeks. Notably, Brent settled above $90/bbl for the first time since early June. Mike noted that the energy complex is wrestling more with global refining constraints than a global crude oil supply shortage. As evidence, U.S. Gulf Coast refining crack spreads have risen to ~$70/bbl, up from ~$60/bbl three weeks ago and from ~$25/bbl prior to the onset of the Iran war. He concluded by noting that investors are turning their attention to second-quarter earnings across the oilfield services sector, with Halliburton kicking off the group's reporting season on Tuesday. Several other key service providers are scheduled to report this week, including Weatherford International, Liberty Energy, Oceaneering International, and SLB. The broader energy sector will also be active, with earnings expected from EQT Corporation, Range Resources, Equinor, Kinder Morgan, Ovintiv, TotalEnergies, and Repsol. Veriten Senior Advisor Deborah Byers also joined and added her perspectives and questions throughout the conversation.
