Appreciate your insight (particularly on this complicated topic).
Paul F.
A full explanation would take a book but we will do our best here. Though it seems always like a conspiracy at the gas pumps, Retailers usually set pump prices based on the expected cost of their next fuel delivery, not the cheaper fuel they bought weeks earlier; as soon as wholesalers raise their price, many stations raise their price to preserve their margin and generate more cash for the NEXT delivery of gas. In terms of oil sands and Canadian pricing, there is always a discount on world prices, but the price is still set against a global benchmark price. In other words, if oil goes up, it goes up everywhere against that set world price. There are different prices in different regions (reflecting shipping, pipelines, war premiums, etc.) but all reflect that standard world price. Energy stocks, like others, reflect the EXPECTED profits from higher prices. First-quarter cash flow for most companies is going to be massive. These stocks were quite cheap last year, and underowned, so there has been a more prounounced gain from recent events. If the war ended today, we certainly would expect a check back in prices. But it may not be so dramatic as 30%. Insurance companies may still not want to insure shippers in the Gulf. We are probably many quarters if not years before we get back to $60 oil, based on prior conflicts and insurance companies reluctance to give the "all clear".