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Major Events put Emphasis on the Effects of Volatility

Minneapolis, MN | October 24, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC

Fundamentals haven’t changed. How you manage risk might. Watch the upcoming development of volatility and spreads for signals.

Three Things

  1. The attack on Israel doesn’t change the long-term fundamental trend. It does, however, remind us not to be complacent about risk. Volatility should be a better indicator of market sentiment in the coming weeks than prices.

  2. Road fuel cracks send mixed messages: distillates remain wide, but there is cause for concern with gasoline margins negative.

  3. At the same time, jet demand looks like it’s flattening, and spreads are widening again.

Nothing has changed. Everything has changed.

Little, if anything, has changed about the long-term fundamentals of the market. Instead, we are reminded why we have risk management programs - the market is always delicately balanced. After an event such as the attack on Israel, it is better to reassess your view of the market than to jump to any conclusions. While the talking heads rush to tell you how smart they are by speculating on all the potential ways the world is different now, we should be steady in our process and make decisions that keep us progressing.

*This summary is based off October 15, 2023

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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