The Nymex crude oil futures market has spiked higher this week as 6% of the world’s oil production was knocked off line by the weekend drone attack on Saudi oil installations. This is a game-changer, regarding the “war premium” added to the price of a barrel of oil. Up to last weekend it can be argued there was little to no war premium at all in the price of crude. In years past the war premium for oil was significant, arguably above $20 a barrel at times of heightened tensions in the Middle East. But then booming U.S. shale oil production reduced U.S. dependence on Persian Gulf oil. Now, traders and investors worldwide see how vulnerable the Persian Gulf oil producers are to terrorist attacks disrupting oil production. While the Middle East is not the 800-pound gorilla it once was in the global oil market, it’s still a heavyweight provider of oil for major countries in Europe and China. Going forward, look for crude oil prices to carry a significant war premium of probably at least $5.00 a barrel. That suggests the days of Nymex crude oil prices below $50.00 a barrel may be over. Stay tuned!–Jim