After President Trump authorized a military strike killing a top Iranian military commander, the escalating conflict sent stocks down around the world, and oil and gold prices up on the first Monday of the new year.
Brent oil prices, the international benchmark, hit the $70 mark for the first time in three months and the price of West Texas Intermediate, the American oil benchmark, reached more than $63 a barrel after the Pentagon's announcement confirming an airstrike at Baghdad's airport. Crude oil last hit the $70 mark in September after drones suspected to have been launched by Iran struck Saudi Arabian oil plants. Saudi Arabia, Iran, and Iraq account for almost half of the world's oil reserves.
Prices are up amid a growing list of concerns after the killing of Gen. Qassem Soleimani: Iran may close the Strait of Hormuz, has already threatened retaliation, and said it will no longer abide by the 2015 nuclear deal the U.S. withdrew from two years ago, and Iraq voted to expel U.S. troops. The State Department warned of a "heightened risk" of a missile attack near U.S. bases.
It is unclear how Iran will respond to Trump's unilateral move. Oanda's Jeffrey Halley noted that "a big fat dollop of geopolitical uncertainty has landed on investors desks" in a report.
But J. Jay Park, CEO of ReconAfrica, said the geopolitical uneasiness isn't, alone, enough to continue driving oil prices up. He said what may continue to drive up prices is a change in supply. Park said supply, demand, OPEC decisions and compliance, geopolitics, and public sentiment about those four items affect oil prices. Uncertainty in Iran, coupled with a change in supply or demand may change the game. Iran may choose to close the Strait of Hormuz, a move Britain has forestalled by sending the Royal Navy to help ships pass through the Strait, through which 21 percent of 2018's global petroleum liquids consumption flowed.
"If that were to happen, the sky's the limit, over $100 easily," Park told Cheddar on Monday.
With the region on edge, stocks fell in Japan, Hong Kong, South Korea, and across European markets.
In the meantime, Park said the current crisis may not drive up oil prices further.
"In the recent past we've seen a number of conflicts, for example the suspected Iranian attack on Abqaiq in Saudia Arabia, that kind of underwhelmed in terms of the extent to which these changes affected the overall price and how long that effect lasted," he said.
Venture capitalists and CEOs are clashing over the future of the internet. Web3 is the tech world's name for a decentralized, blockchain-based internet that runs on cryptocurrency. It was recently the topic of a tweet from Block CEO and former Twitter CEO Jack Dorsey who wrote that Web3 will not actually be owned by users, and instead be controlled by rich venture capitalists. Dorsey later shared that he was blocked on Twitter by Marc Andreesen, co-founder of VC firm Andreesen Horowitz, which has invested billions of dollars into Web3 and crypto projects. Correspondent for DealBook from the New York Times, Ephrat Livni, joins Cheddar News' Closing Bell to discuss what this could mean for the future of Web3.
Jim Worden, Chief Investment Officer at Wealth Consulting Group, joins Cheddar News' Closing Bell, where he says the period between Christmas and New Year's is difficult to predict due to a lack of institutional volume, with the Omicron variant adding even more uncertainty on Wall Street.
Prices at the pump this year reached a seven-year high, and a new forecast from GasBuddy shared with CNN predicts that gas prices will only continue to rise in 2022 and that the national average could even reach $4.00 a gallon; however, analysts at GasBuddy say anything could happen when it comes to gas prices in the future, as the pandemic has made it difficult to make any predictions about the economy. Consumer Energy Alliance federal policy advisor Michael Zehr joins Cheddar News' Closing Bell to discuss.
The record-breaking success of "Squid Game" on Netflix has many media companies competing to produce, stream, and invest in new content from South Korea. Netflix has spent half a billion dollars on developing Korean content this year, and other streaming services are taking note. Seth Schachner, managing director at StratAmericas and digital business executive, joins Cheddar News to discuss.
Airlines had to ground 2,500 flights in the U.S. on Tuesday, with bad weather and workers out with COVID-19 blamed as the main culprits. Scott Keyes, founder of ScottsCheapFlights.com and author of "Take More Vacations," joined Cheddar News Wrap to discuss how the surge from the omicron variant has been creating havoc in the air travel industry. Keyes noted that a lack of personnel from pilots to gate agents had been exacerbated by the coronavirus, an issue also disrupting labor markets throughout the economy. "Add to that the fact that travel has rebounded far quicker than many analysts and experts predicted, this is why I think you're seeing so many airlines caught a bit flat-footed in having to pare back the schedules they had set months ago," he said.
Barstool Sports CEO Erika Nardini joined Cheddar's Kristen Scholer to discuss plans for the future even as COVID-19 upended Barstool's sponsorship of the Arizona Bowl featuring the Boise State Broncos and the Central Michigan Chippewas due to the spreading omicron variant. "In our case as a company, coronavirus has been a big boom for us," she noted. "We've been able to create a lot of new programming, launch a lot of different personalities, and frankly take share from traditional media, and that's what we've done the entire pandemic." While she admitted to taking a hit on the canceled Bowl game, live events aren't completely off the table for Barstool in 2022. Nardini also talked about potential sports betting expansion following its partnership with Penn National Gaming.
