Hope Fades, Traders Brace for Extended Oil, LNG Squeeze

For most of the past six months, traders active on the commodity futures markets have been mostly optimistic. They have taken every statement by President Donald Trump about peace talks or victory over Iran at face value, betting on a speedy end of the war. Now, it has started to dawn on many that this is not happening. The physical squeeze is catching up with the market. Earlier this week, the Wall Street Journal reported that a diesel shortage that has been brewing since spring is now growing increasingly severe and about to become even more severe as demand rises in autumn and winter. In other fuels, the squeeze has not been as pronounced, but it is there, simply because both the Middle East and Russia were significant refined fuel exporters until war changed things. It is not only refined fuels that are in increasingly short supply, however.