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Illustration: Aïda Amer/Axios
Oil prices have skyrocketed so far this year, but traders aren't filling their swimming pools with gold coins just yet.
Driving the news: Crude prices rose 3% yesterday after the State Department said it would not extend waivers allowing nations to bypass U.S. sanctions and import oil from Iran. International standard Brent crude prices have risen upwards of 30% so far this year and U.S. WTI prices close to 40%.
However, this year's rally feels eerily similar to last year when oil prices spiked above $85 a barrel in October, only to crater near $50 in December. Traders were caught on the wrong side of the unwind, with bets that prices would rise outnumbering contracts betting it would fall by 9 to 1.
The big picture: The problem is that oil prices aren't rising because the economy is improving and there's increasing demand, Jason Trennert, chairman of Strategas Research, said in an interview with CNBC on Monday. They're rising because of politics. That's not a recipe for a long-term run.
Yes, but: Much of the 2018 downturn in oil prices came because the U.S. instituted the waivers, and the Trump administration is showing little appetite to keep them in place. And with Venezuela's oil production at historic lows, 2 of the world's major producers are on the sidelines.
The bottom line: For a sustained rally in oil prices, demand will need to pick up globally, which will require healthy manufacturing and industrial economies and citizens looking to travel. Whether oil can sustain its surge this year should provide some clarity on the health of the world economy.
Industry analysts say there are a number of headwinds facing the oil market in 2019 that could cool its red hot run. There's substantial supply to fill the market's void thanks to the rapid growth of U.S. shale. Saudi Arabia and its allies also have pledged to provide sufficient supply.
Sinclair Broadcast Group, the massive local conservative broadcaster that's been criticized for pushing Pro-Trump talking points, has been hiring a slew of ex-mainstream news anchors as it pushes into national news coverage. It's also reportedly in the running to buy up a handful of Fox's regional sports networks, Axios' Sara Fischer writes.
Why it matters: Sinclair's hiring spree suggests that it's looking to position itself as a national news competitor to Fox News ahead of the 2020 election, and as an overall competitor to big broadcasters with its foray into sports coverage.
Flashback: This wasn't always the plan. The company's efforts to push into national news and regional sports comes after an embarrassing defeat in its attempt to expand its local news empire last year after its bid for Tribune fell through.
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Whirlpool is selling fewer appliances in its biggest market, but still raking in record profits, according to its first quarter earnings report, Axios' Courtenay Brown writes.
Why it matters: Whirlpool, whose CEO once praised protectionist trade policies, quickly went from the winning side to the losing side of President Trump's trade war. But it's since fended off waning demand with price hikes on washers and dryers, which in turn, has caused even less demand.
Background: Trump imposed tariffs as high as 50% on imported washing machines in January of last year, which Whirlpool hoped would turn consumers away from its foreign competitors.
But researchers argue in a paper released this week that the industry's price increases are not a result of higher material costs, but "domestic firms exploiting their market power.”
Former Godfather's Pizza CEO and presidential candidate Herman Cain's decision to drop out of the running for the Fed was largely expected, but his reason for doing so was surprising.
Driving the news: Despite saying just last week that it was "not in my DNA" to bow out of a nomination to the Fed, Cain called the White House yesterday to say he didn't want to be considered for the position anymore, according to President Trump.
Still happening: The White House is said to still be considering nominating Stephen Moore to the Fed, despite new revelations Moore wrote sexist things about women's participation in sports.
The last word (for now): "Herman Cain was woefully unqualified to be on the Federal Reserve and his failure to garner adequate support should not be used as a pathway by Senate Republicans to approve Stephen Moore, who is equally unqualified, and perhaps more political," Senate Minority Leader Chuck Schumer said in a statement Monday. "Mr. Moore, like Mr. Cain, poses a danger to the economic stability of our country."
My thought bubble: The sexual assault allegations against Cain are disqualifying as is his clear fealty to Trump and lack of economics knowledge. However, he was chairman of the Kansas City Fed's Omaha branch from 1989 to 1991. He was deputy chairman from 1992 to 1994 and chairman of the Kansas City Fed until 1996. That 4 Republican senators came forward to oppose Cain but none have so far publicly opposed Moore is noteworthy is unsurprising.