Some of the traders I know who trade commodities have stopped talking about crude oil like its just about supply and demand.
This change took place slowly.
A years ago every conversation was about how much oil was being produced, the routes that ships take or how much oil was in storage. Nowadays when I'm in trading groups or reading research from smaller firms people seem less confident and more uncertain. Experienced traders seem to doubt themselves more often.
I realized this after paying attention to how energy markets react to global events that create tension.
Sometimes the price of oil goes up when theres news but then it drops again even if nothing has changed for the better. At first I was confused by this. I thought maybe the market wasn't working right.. Then I understood that people aren't just trading oil anymore. They're trying to guess what will happen with governments, inflation, central banks, shipping risks and even elections all at the time.
I followed a trader for months who quietly stopped trading commodities altogether. Not because he lost a lot of money. He said he was just tired of trying to figure out how politics would affect the market every morning before he even had his coffee.
That really stuck with me.
The weird thing is that new traders still come into the oil market expecting things to be clear and straightforward like they used to be.. Things feel different now. Small changes in price make people feel more emotional. They close their trades faster. They lose confidence quickly.
It makes me think about whether the next big change in the oil market will be more about how people can handle the uncertainty before they give up rather than, about shortages.