I found the "recent work" that Jonathan Ferro is referring to in his introduction to Jeffrey Currie. Couldn't find a text version to summarize, but here's a longwatch video interview that has extensive details about the matters being discussed:
The essence of the interview is a question about why the price of oil (as reflected by Brent crude and WTI (West Texas Intermedite) has remained (relatively) stable despite the ongoing conflict in the Gulf. Those prices went way up when the "hot war" started, then moderated back down when the "memorandum of understanding" was executed, and now they are heading back up in a gradual fashion.
I have not previously been aware of Jeffrey Currie, but his reply (starting at the 1:15 mark of the second video) is exactly what I've been thinking - so I assume he is a brilliant genius. His Wikipedia page indicates that he is a highly-respected economist at the University of Chicago. Listen to as much of that interview as you have time for. I heard the same arguments presented live to Jonathan Ferro this morning on Bloomber's Surveillance program in the pre-market and I was blown away by the insights.
For the TLDR and TLDW crowd, I'll add some more nuggets. First the definition of "crack spread":
Crack spread is a term used on the oil industry and futures trading for the differential between the price of crude oil and petroleum products extracted from it. The spread approximates the profit margin that an oil refinery can expect to make by "cracking" the long-chain hydrocarbons of crude oil into useful shorter-chain petroleum products.
And before I move on, one note. Any juvenile salacious comments about "crack spread" will be instantly vaporized on review. The comment section here is for serious discussions of the world economy.
(more text to follow later after I get some other chores done. The U.S. equity markets are closed already anyway).
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