White House is using the wrong oil price for Iran war
What matters for the US economy is not the price of WTI, but the cost of refined petrol products
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US PRESIDENT Donald Trump has seemingly turned the price of West Texas Intermediate (WTI) crude oil into a referendum on his war against Iran. Thumbs up if WTI stays below US$100 a barrel. Thumbs down if it rises above. Even if he succeeds in keeping that particular gauge below the triple digits, it would be a Pyrrhic victory.
What matters for the American economy is not the price of WTI, but the cost of refined petrol products – and they are rising rapidly. While the price of Texas crude is up 60 per cent since January, the cost of key everyday fuels has risen by between 85 and 120 per cent.
On paper, the White House’s strategy makes sense: Wall Street focuses on WTI as its preferred indicator of what is going on in the oil market, and hardly pays attention beyond.
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