Brian Kersmanc

So what if the straight actually is prolonged in terms of being closed or being constrained?

Then you have to start buying these barrels at a higher price.

And that's when you start seeing the physical prices coming back up when that inventory sort of hits those bottoms.

And I think that thing that concerns us a little bit is when you start looking at those data at Cushing.

For example, Cushing, Oklahoma, you're at essentially effective tank bottoms there.

About 20 million barrels.

You get any lower, you start getting rust and like the sludge and stuff in the bottom of the barrel coming through.

So it's not really that usable below that level.

I think about US gasoline inventories.

I think we're at 214 million barrels right now.

From what we've heard and seen, that's about 195 to 215 that you start hitting that operational minimum, meaning that you get any less fuel in the tanks, then you start having those gas pumps with the plastic over them, and any sort of disruption causes that to happen.

So we're at pretty low levels right now, and Trump even said this.

He said we'd be out of energy, we'd be in a really bad situation in the next four weeks if things didn't clarify themselves.

I think that's why you're seeing the negotiations as hard as you're seeing happening and the concessions that are being made happening within the Iranian situation.

Yeah, so I think one of the things that you can see already in terms of the higher fuel input costs, energy costs that we've seen up until this point is it is starting to have an impact on things.

Now, it may be somewhat muted because we've only gone through one earnings cycle and you only had a partial impact of this stuff up until this point.

But you look at some of the retailers that have come out, the Walmarts, the Costcos, even the dollar stores and things like that, they've all talked about the fact that consumers are facing sharper pricing and they're having to try to absorb some of that pricing on their behalf.

Now, they particularly get a benefit because consumers trade down to, quote unquote, inferior goods.

They're going away from the more expensive place to shop and going there instead.

So that's helping them, but in the grand scheme of things, that is sort of hurting that purchasing power, so to speak.