Goldman Sachs Group, Inc. (GS): How You Affect Oil Prices More Than Military Conflicts Do

Today, we find ourselves in a similar position to the days before the 1991 Gulf War. The alleged use of chemical weapons in Syria has led to international backlash and the possibility of U.S. intervention in the Syrian civil war. The threat of a U.S. strike has raised many questions: What kind of military response should we expect from the United States? Will Iran and Russia, both allies of the Syrian government, respond? What if Israel gets involved? Could this potentially affect the Suez Canal and its Sumed pipeline, one of the most critical oil transit routes in the world?

These uncertainties have driven the price of Brent crude up by 4% over the past couple of days, even though no intervention has commenced. It appears that the evidence of increased U.S. production, big oil discoveries in ultra-deepwater regions around the world, and a U.S. Strategic Petroleum Reserve currently at almost 700 million barrels is still not enough to keep investors from stocking up in fear of a looming crisis.

What a Fool believes
The lesson to be gained from these situation is, as always, that investors are faced with uncertainty everywhere you look. In the past 100 years of U.S. history, the U.S. has been actively engaged in a military conflict for 43 of them. We have experienced oil embargoes, missile crises, multiple economic collapses, peak oil, and everyday stories that should give us reason to sell non-essential items and stock up on commodities just in case.

The key to being a great investor isn’t about timing the market perfectly or trading the hot stocks and dropping the losers; it’s having the temperament to put aside our immediate emotional responses to these situations and evaluate then dispassionately. It’s not an easy task. We’re fighting against the very mechanisms that have helped us as a species survive to this day. Those who have been able to do it over a long period, though, have benefited immensely.

The article How You Affect Oil Prices More Than Military Conflicts Do originally appeared on Fool.com and is written by Tyler Crowe.

Fool contributor Tyler Crowe covers anything energy for The Motley Fool. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter: @TylerCroweFool.

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