Today, I’m pulling back the curtain on the oil price manipulation game.
Recently, mainstream financial media has been on their business-as-usual fear mongering campaign in promoting US$350 per barrel crude oil prices in the future as a real possibility due to what I call the BBR (Big Bad Russians) factor, even though short-sighted NATO enforced economic sanctions on Russian oil and price capping would, without doubt, hold some culpability for the materialization of such prices. Recently, Reuters touted a JP Morgan analyst prediction, “Oil could hit $380 if Russia slashes output over price cap”, and another mainstream financial media site pushed public fear levels to 10 by forecasting similar apocalyptic prices in an article titled “America braces for $380 oil.”
All of this fear mongering is based upon forecasts that Russia could cut daily oil production by five million barrels per day (5mbpd) without hurting its own economy in response to ongoing NATO discussions to cap Russian oil prices at levels below those set in futures/spot markets. This proposal is not a new one, but a regurgitation of one proposed last May by US Treasury Secretary Janet Yellen, in order to punish Russia. Here are at least half a dozen false things about that JP Morgan price scare report, also reconstituted in a $300 to $400 per barrel oil price range prediction by Deputy Chairman of Russia Security Council member, Dmitry Medvedev. However, I believe that Medvedev’s affirmation of these possible future oil prices is simply a consequence of pure gamesmanship versus actual stupid belief in these possible prices from the likes of American and Japanese analysts.
Before I start with my 7 reasons why the Russia $380 oil price prediction connection being made by the mass financial media, let me simply ask for at least 30 shares of this article as the prerequisite to publish the next free article on this platform. With this PSA out of the way, let’s get started!
Seven Reasons Why Blaming Russia for Future $380 Oil Prices is Nothing But More Russian Demonization
- Decades of Wild Crude Oil Price Spikes Occurred Before Russian Demonization
Oil prices fluctuated in wild volatile price swings from $143 in April 1980 to a paltry $36 in April 1986 to $87 in September 1990 to $20 in November 1998 to $187 in June 2008 to $58 six months thereafter in January 2009, with many more volatile price swings in between those periods and many after as well. One literally needs no more than a thimble sized container of intellect to understand that these wild price swings were never caused by schizophrenic swings in global crude oil supply/demand dynamics but were caused by banker oil price manipulation schemes executed in oil futures markets for their own Machiavellian profits to the detriment of all oil consumers around the world.
- Oil Futures Prices Once Went Extremely Negative
People have literally forgotten about the time oil futures contracts sold for -$37 a barrel. Yes, that is not a typo. Oil prices in derivative markets once went negative, in April 2020. Part of the explanation for how a commodity price can turn negative, other than the fact that prices are determined in bogus derivative markets, was the following: A sharp global downturn in economic activity caused by unnecessary Covid lockdowns during Q1 2020 caused an excess of supply in which buyers did not want to spend cash to store oil in offshore supertankers with no demand.
However, the greater part of this equation that produced ($37) per barrel crude oil was this often non-discussed reality (oil price manipulation) that I disclosed eleven years ago here in an interview conducted by my friend, German journalist Lars Schall. In this article, Mr. Schall quoted a Chief Economist for a Wall Street firm that once confided, “Total NYMEX open interest in crude is 1.4 million contracts or about 1.4 billion barrels of crude. Daily volume of crude traded on NYMEX is over 1 billion barrels per day. Total daily global demand is only 83 million barrels per day. The amount traded on one single exchange is more than 10 times total daily consumption. It’s a giant casino with prices being driven up by speculators and consumers having to pay more and more.”
In other words oil derivative markets are every bit as fraudulent as gold, silver, platinum and palladium derivative markets. Though I understand why Harvard and Wharton MBAs will embrace such drivel written by JP Morgan oil analysts because they learned in their MBA programs to accept and believe such propaganda, everyone on Wall Street knows that manipulation in oil futures markets plays a much larger role in setting oil prices than any oil producer cutting daily supply by 5,000,000 bpd ever could, even if that oil producer is BBR (Big Bad Russia).
- The Massive Leaps Necessary to Conclude More Sanctions Will Create $380 Oil
The logic behind the above $380 per barrel prices is so idiotic that it begs belief. Here are all the illogical suppositions necessary to arrive at this price, none of which include banker oil price manipulation: (a) NATO nations cap Russian oil prices below spot oil prices (which has zero bearing on prices Russia will actually choose to sell its oil); (b) Russia consequently agrees to sell oil prices way below market even though there is no enforcement law outside of nuclear war than can force them to do so; (c) Russia becomes so angry at its voluntary incompetence in managing oil prices that it retaliates by curbing production; (d) Curbed production causes oil prices to soar even though in reason (2) I informed you that prices set in oil futures markets determine global oil prices far more than supply/demand determinants ever will. And on top of all these unlikely presuppositions, Russia currently is already offering their oil to China and India at discounts from global spot prices.
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