Trump invoked a 1950 law written for the Korean War. The target is oil. The country that already pumps more crude than anyone on Earth.
The memo declares petroleum production and refining essential to national defense. Section 303 lets the president hand out loans, purchase commitments and financial support. Congressional notification gets waived. Efficient.
Trump told a rally in Sioux City, Iowa, that the US has more oil than Russia and Saudi Arabia combined. Then he announced $150 million to fix the shortage of that oil. Both statements came from the same mouth, in the same speech, and the crowd clapped for each.
The memo names no projects. Vice President J.D. Vance separately said the money would expand a Delek U.S. Holdings refinery in Texas. Delek now has a sentence in a presidential memo. Delek stock has a chart. Neither one tells you anything.
The memo blames "constrained financing, long lead times, permitting and infrastructure bottlenecks." That is a list of everything. Add weather and you have a Tuesday.
The backdrop is a war with Iran that began in late February and a Reuters/Ipsos poll showing 36 percent approval on the economy. Midterms are November 3. The Defense Production Act is a hell of a way to say "please like my gas prices."
Retail traders will now buy refiners. They will draw a trendline from 1950 to today and call it a cycle. They will say "the Fed put is now the Trump put" and mean it. Some will use margin. One will explain it to his wife using a whiteboard.
Technical analysis offers no help. No candlestick pattern accounts for a president ordering barrels into existence by citing the Korean War. The chart does not care. Neither does the barrel.
$150 million is roughly what America burns through in crude every few hours. The Cold War is over. Your diesel bill is not.
Photo by History in HD on Unsplash
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