Wall Street veteran Jeff Currie said that the world's most important oil benchmark futures have now almost been reduced to a kind of “emotional contract,” weakening its usefulness as a tool for managing price fluctuations. “Everything energy-related is rising, except Brent crude oil isn't,” Currie said in an interview on Thursday. “It's out of touch with the real world.” Currie is the founder and CEO of investment firm Real Macro. He said that the current price of Brent crude oil is about 106 US dollars per barrel, which does not reflect the extent of the threat facing supply from the Strait of Hormuz to the Black Sea. Recently, the threat facing the oil market has further escalated. Attacks on oil tankers are frequent along the Strait of Hormuz, and attacks on Saudi Arabia by the Houthis have intensified. The freight market has also surged. Currie said that as the global environment deteriorates, the disconnect between Brent crude oil and the spot market is creating “the risk of not being able to price”, making hedgers reluctant to use this contract when they need it most to protect themselves. “These futures markets are absolutely critical to the operation of an industry in modern society,” Currie said. “If we lose this pricing mechanism, there won't be enough investment, and there won't be enough behavioral adjustments.”

Wall Street veteran Jeff Currie said that the world's most important oil benchmark futures have now almost been reduced to a kind of “emotional contract,” weakening its usefulness as a tool for managing price fluctuations. “Everything energy-related is rising, except Brent crude oil isn't,” Currie said in an interview on Thursday. “It's out of touch with the real world.” Currie is the founder and CEO of investment firm Real Macro. He said that the current price of Brent crude oil is about 106 US dollars per barrel, which does not reflect the extent of the threat facing supply from the Strait of Hormuz to the Black Sea. Recently, the threat facing the oil market has further escalated. Attacks on oil tankers are frequent along the Strait of Hormuz, and attacks on Saudi Arabia by the Houthis have intensified. The freight market has also surged. Currie said that as the global environment deteriorates, the disconnect between Brent crude oil and the spot market is creating “the risk of not being able to price”, making hedgers reluctant to use this contract when they need it most to protect themselves. “These futures markets are absolutely critical to the operation of an industry in modern society,” Currie said. “If we lose this pricing mechanism, there won't be enough investment, and there won't be enough behavioral adjustments.”