Oil Price Impact

Use This Skill When

• The user wants to understand who benefits or gets hurt when oil moves.
• The task requires linking crude price shocks to earnings, margins, inflation, or market positioning.
• The analysis needs sector-level or company-level oil sensitivity instead of a generic energy comment.
• The user wants first-order and second-order consequences of an oil move.

Required Inputs

• target: company, sector, basket, or region
• oil reference: WTI, Brent, product spreads, or a specified oil complex benchmark
• shock definition: spot move, sustained change, supply disruption, or policy-driven move
• time horizon: immediate, next quarter, next 12 months, or cycle
• exposure type: direct input cost, transportation, petrochemical feedstock, inflation pass-through, demand sensitivity
• If precise company sensitivity data is missing, state that the analysis is directional and use business model exposure logic instead of fake elasticity figures.

Workflow

1. Define the oil shock clearly: magnitude, duration, benchmark, and cause.
2. Identify the main transmission channels:
   • direct input cost
   • freight and logistics cost
   • consumer purchasing power
   • inflation expectations and policy path
   • cross-commodity substitution or spread effects
3. Separate first-order effects from second-order effects.
4. Assess timing: what hits immediately versus what rolls through contracts, inventory, or pricing with a lag.
5. Determine whether the target can pass through higher costs or capture lower input costs.
6. Conclude with earnings, margin, valuation, and positioning implications.

Output Requirements

• State whether the impact is direct, indirect, or regime-level.
• Specify whether the oil move is likely to be margin-accretive, margin-destructive, demand-supportive, or policy-relevant.
• Distinguish temporary spot effects from sustained pricing regime changes.
• Highlight lag structure and pass-through assumptions.
• End with which datapoints would confirm or break the view.

Output Template

Quality Checks

• Confirm the oil benchmark and shock scenario are explicitly defined.
• Check that the analysis distinguishes input-cost sensitivity from demand sensitivity.
• Verify the lag structure is addressed rather than assuming instant transmission.
• Make sure beneficiaries and losers are explained through causal channels, not intuition alone.
• Remove any unsupported numeric sensitivity if the source is not provided.

Guardrails

• Do not assume every oil move has the same effect across all sectors.
• Do not treat short-term spot moves as permanent cost resets.
• Do not ignore inventory accounting, hedging, or contracted pricing.
• Do not invent elasticity tables or precise EPS bridges without supporting data.
• Do not confuse oil impact with a broader macro call unless the second-order policy path is explained.

Example Prompts

• Analyze how a sustained Brent move from 80 to 95 would affect airlines, chemicals, and consumer staples.
• Show the oil price impact on European industrial margins over the next two quarters.
• Explain which US sectors benefit from a lower oil regime and which ones face second-order demand pressure.