The head of petroleum analysis at GasBuddy says, 'we're in uncharted territory' when it comes to forecasting oil prices given the U.S. war in Iran.
Patrick De Haan says everyone wants a forecast to know what the best and worst-case scenarios are, but we just really don't know.
"Rarely do we see a U.S. president attacking a country without the approval of Congress and escalating rhetoric," he says. "It's very difficult to know; this is about managing a personality and trying to understand what the president's goals may be, and it's very hard to do that right now given the lack of clarity from the administration on what they're trying to accomplish."
Oil prices are rising again Tuesday, a day after slumping more than 10 per cent on Monday after Trump posted on social media that the U.S. and Iran held productive talks "regarding a complete and total resolution of our hostilities in the Middle East" over the last two days.
Iranian officials denied such talks took place, calling the posting "fake news used to manipulate the financial and oil markets" in a post on X.
De Haan says oil prices dropped yesterday after Trump's comments on talks got the markets optimistic about a light at the end of the tunnel, but the market is growing skeptical today.
"The situation reverses, and there's really no information about talks. The market is looking for additional information on what's going to happen, if it's going to escalate or deescalate, and unless it gets it, we may see oil prices pass around today, which is a slow and steady rise," he says.
De Haan says Windsor's average price is at 177.9 cents for a litre of regular as of Tuesday morning, which is up 12 cents from last week and up 44 cents from prior to the war.
The average price in Windsor did hit 211.3 cents per litre briefly in 2022.
De Haan says the global economy we live in is really changing on a moment-by-moment basis.
"We just don't know when the president will make comments that could push markets one way or another depending on whether they're optimistic or pessimistic," he says. "Stay on top of the situation; if you see oil prices plummeting, that's a pretty good indicator of what could happen. Of course we saw oil prices plummet yesterday, but they're jumping up again today, so it just highlights the uncertainty."
The Strait of Hormuz, a key waterway that typically sees a fifth of the world's maritime oil traffic, remains closed to most vessels as Iran threatens attacks on commercial shipping as part of the conflict in the Middle East.
with files from The Associated Press