RafaelGonzalez

After talking with Mauricio, we both concurred that a ceasefire was more likely than not, and I valued the fact that we conducted both external and internal analyses of the situation. However, in my internal assessment, I mainly focused on the actions of the government without adequately considering the significance of the people as integral components of the parties involved.

Mauricio was correct in utilizing sources such as polls conducted among Gazans, revealing that nearly two-thirds of them now support Hamas' Oct. 7th attack (NPR). This suggests that civilian and Hamas resistance to any Israeli occupation would be intense. He also referenced polls surveying the other side: Over 90% of Israelis believe that the IDF is justified in its current use of military force in Gaza, differing only in their opinions on the intensity of the campaign (Time).

Taking into account these internal dynamics and being mindful of avoiding an overcompensation bias, I am (very slightly) revising my forecast to reduce the likelihood of a ceasefire based on the uncertain support from the domestic populations.

Talking with Mauricio confirmed our projections, as we exchanged insights on the diverse array of sources we utilized to strengthen our forecasts. I found myself intrigued by Mauricio's consistent allocation of 1% to remote possibilities, which hinted at a potential overlook of exceptional occurrences.

Yet, Mauricio astutely referenced Kahneman's perspective on probabilities, highlighting the challenge of assigning definitive weights to exceedingly rare events—those below 1% or above 99%. Such events are often either disregarded entirely or assigned a negligible decision weight. Tetlock and Gardner similarly argue that assigning a probability of 0% is reserved for events deemed impossible.

Hence, is it plausible for Brent to surpass $100? Yes. Conversely, is it nearly certain that it won't? It is. In that case, we're adjusting our estimation to 1% accordingly for the three categories indicating a +100$ price.

After reviewing my forecast with Mauricio, he correctly noted that the wording of the question suggests the possibility of smaller-scale and covert attacks on the Iranian missile infrastructure. Initially, I had only considered large-scale, overt attacks, perhaps due to a bias favoring cognitive ease.

However, as our discussion progressed, we both acknowledged that considering the current internal and external dynamics, it is highly likely that even if a covert/minor attack occurs, its perpetrator may remain undisclosed, similar to recent attacks on Iranian nuclear facilities like the Stuxnet one. Thus, weighing both supporting and opposing arguments, I reaffirm my initial forecast.

My prior evaluation stays largely consistent. The ongoing prevalence of low prices and recent declines in futures markets suggest that prices will continue to adhere to established patterns. There are only minor adjustments from my initial estimation, slightly favoring the lower price scenario because of the timeframe. 

1.- Brent crude futures settled at $81.62 per barrel on Friday, marking a 2% weekly decline.

2. Investors were evaluating remarks from Fed Governor Christopher Waller regarding potential delays in interest rate cuts, possibly extending by at least two months. This hints at sluggish economic growth and a dampening effect on oil demand, according to Trade Economics. (Reuters)

3. The International Energy Agency noted in its monthly report a slowdown in global oil demand due to a shift towards renewable energy sources.

4. Data from the EIA indicated that US crude inventories increased less than anticipated the previous week.

5. To cross-check my forecast with others, Trading Economics still forecasts Brent crude oil expected to trade at 83.17 USD/BBL by the end of this quarter. 

No notable progress has been made since last week regarding the issue at hand. Estimates remain at 20% (1/5). 

Internal Dynamics

1. Iran has now attributed the Feb. 14 pipeline attacks to Israel, despite no direct reprisals occurring. (Al Jazeera)

2. However, Israeli Foreign Minister Israel Katz, in a communication to the United Nations Security Council, has drawn attention to Iran's increased arms shipments to Hezbollah via Syria. Katz stated on X that "Iran is the head of the snake. We will not be patient much longer for a diplomatic solution in the north. If the dramatic intelligence information we revealed to the Security Council does not bring about change - we will not hesitate to act."

External Dynamics

3. According to The Washington Post, Iran, cautious of escalating conflict, is advising its proxies to refrain from provoking the U.S. While Iran aims to disrupt U.S. and Israeli interests in the Middle East, it is hesitant to incite direct confrontation, privately urging Hezbollah and other militant factions to exercise restraint against U.S. forces, as per regional officials, maintaining the likelihood of such events at one in every five.

Since last week's predictions, there has been very significant advancement, and the situation is developing further as of February 24.

External Dynamics

1. Negotiations have commenced in Paris, characterized by Al Jazeera and Reuters as the "most serious push" in weeks to cease the conflict and secure the release of Israeli and foreign captives. Israeli media The Jerusalem Post indicates Israel's acceptance of a new outline for a hostage deal concerning Gaza.

2. White House National Security Council Spokesperson John Kirby mentioned to reporters on Thursday that initial signs suggest positive progress in discussions regarding hostage release and a ceasefire, describing them as "constructive," and "going well."

3. Earlier this week, the United States vetoed a U.N. Security Council resolution urging an immediate Gaza ceasefire. Instead, American officials have proposed an alternative resolution calling for a ceasefire for the first time, contingent upon Hamas' release of hostages. (Reuters)

Internal Dynamics

4. Within the U.S. political landscape, the NY Times Editorial Board called for a ceasefire, while 13 Jewish Democratic members of Congress penned a letter to President Joe Biden urging exhaustive efforts to broker a temporary ceasefire agreement between Israel and Hamas.

5. Haaretz reports on internal pressure in Jerusalem, where approximately a thousand individuals marched with torches from the President's Residence to Paris Square in the city center, advocating for hostage release and early elections.

These developments have increased the likelihood of a ceasefire to 3 out of 5; considering the requirement for a one-month duration...

6. Reports (NY Post) indicate that Hamas may agree to a six-week ceasefire rather than a permanent truce. Additionally, there are discussions within the Israeli war cabinet regarding a potential truce in Gaza and the release of Israeli captives following the Paris talks (Al Jazeera).

7. Ravid (CNN) also reports on the initial six-week ceasefire:

Regardless of whether it's a truce or ceasefire, both estimates exceed the 30-day threshold, elevating the prospects to 75%.