The shell game is one of the oldest cons on record. Greek historians tell of ancient Egyptian slicksters stripping rubes of spare coins in the shadow of the pyramids. We have concrete evidence dating back to 1670, wherein Richard Hull writes of rogues cheating farmers at “thimblerig” at ye old faire.
The con was supposedly brought to the colonies by a Dr. Bennett, who was infamous for his ability to hide a pea amongst three walnut shells. Jefferson Randolph Smith – a.k.a. “Soapy Smith” – set up mobs of shell men throughout the Midwest and Alaska before he was caught out and shot in Juneau in 1898.
Today we are once again seeing the rise of this classic fiddle. I am not talking of impossible games of Three-Card Monte played on dark side streets off Times Square or such. Rather, I am speaking of the grand swindle that is being foisted on us concerning oil prices.
It’s Not Under That Nut…
If you peruse the newswires, you will see numerous reports that claim to explain why crude oil has hit a barrel, and where it is headed next. And while they are all replete with supposed “facts,” not a one of them actually gets anywhere near the truth. Rather they attempt to draw your attention as far away as possible from the real issues facing us today.
“Oil is up,” the headlines shout, “because the recession is ending.” A peculiar claim, because most productivity reports note that the numbers are still falling, albeit ever so much more slowly than they have been.
Other analysts state that the tepid recovery will actually be the death of oil. They figure that oil prices are actually following some kind of logical demand curve.
Friends, I will tell you right now, that the pea is not under that shell.
… Or This One Either!
Then there are the analysts who claim that oil prices have nothing whatsoever to do with demand. Rather, this whole rise has been the result of manipulated supply. Oil is actually up because OPEC has reduced output. Not only that, but gasoline is up because no one wants to build new refineries in California.
Don’t even bother lifting that shell, Champ. The pea’s not gonna be there either.
OPEC’s reported numbers almost never match this most contentious of cartels’ members’ actual output. Someone always cheats and sells into the grey market. I am told that the real production variance from peak to trough is maybe 5% at best.
Floating Futures (Literally!)
And then there is the most peculiar fold I’ve heard in recent days. It seems that at oil’s very bottom a few months back, speculators loaded up a fleet of some 33 supertankers and sailed them about aimlessly waiting for better prices.
Now some seven of those tankers are reputedly heading for port looking to unload their crude at the current . Talk about taking future hedging literally!
And just to put even more backspin on the ball, I have a report on my desk right now claiming that there is enough oil in those tankers to substantially reduce oil futures by and of themselves.
Shills, I say. Shills one and all.
Where the Pea Really Was the Whole Time
So long as you focus on logical issues like supply and demand, you will never find the pea, folks. Because the price of oil has almost nothing to do with anything going on at Middle East pump-heads or American Refineries.
All of that action is mere distraction – the waving of hands while disguised shills pick your pockets clean. This whole con pivots entirely around the actions of those few grey men in back rooms in Washington, DC, who spend their days seeing to the astounding proliferation of U.S. dollars.
Crude oil futures’ declined 74% in 2008 and saw a 76% recovery in 2009.
Nothing new here to see. As I mentioned earlier, most every wire service and cable news talking head has been regaling you for days as to how oil rushed from to .
It’s All About the Benjamin’s
But the U.S. dollar futures saw an increase in value of each individual dollar as Wall Street massive holdings are devalued via the whole mark-to-market debacle. The dollar fell as Washington attempted to re-inflate Wall Street’s bubble with billions of fresh new dollars.
And oil’s collapse and return does not coincide with any real change in demand? I mean sure, demand fell a bit… but 75%? I think not. Nor does it match any real change in output. Again, that factor may have varied a whopping 5%. Or not.
Rather, oil prices walk in perfect reverse tandem with the dollar. And we all know what Washington is doing with dollars these days.
Not everyone is fooled by the sly subterfuge of supply and demand. There are plenty of insiders who know exactly how the con works.
When you read that Goldman’s Arjun Murti is calling for oil to increase another 18%-20% this summer and fall… Or that Black Rock Energy and Resources (the most accurate mutual fund on record when it comes to oil profits) is calling for crude to climb 30% over the next few years… you have to know that they are watching the proliferation of dollars more than any other indicator.
They know where the pea is, and how to profit off it.
And now so do you.
About the Author
Adam Lass is the editor of successful trading service WaveStrength Options Weekly and regular contributor to Taipan Daily. He has written numerous articles and special investment reports for several major financial publications including Taipan, The Fleet Street Letter (US), Strategic Investment, and Penny Stock Fortunes.
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High oil prices are injured in petrochemical Shahui carbine power – high oil prices, power Petrochem
Article by hi joiney
Comeback this year’s high oil prices, the price has not yet fully market-based refining and power industries most affected, if Crude Prices continued to rise, will have triggered Oil Price increases and electricity prices rise, the final transfer of all Energy And raw materials industries, and thus greatly improve production costs, so that just the recovery of domestic Economy Challenge. Refining industry break-even point is around the corner”Basically, the current cost-push price of crude oil, mainly from the downstream industry recovery, so it is affordable.” Realistic national security analyst, said Qi. The first quarter of this year, in Home Appliances Countryside, Textile Exports pick up, and automotive industries, real estate industry needs driven by the petrochemical industry in China increased by a new round of the starting point. According to newspaper statistics, first quarter results in the disclosure notice of the 87 companies, cloud-dimensional shares, Huafeng Spandex , Fuyao glass nearly 10 chemical companies are expected, first quarter, or losses or increased significantly. CPI at a high level in the domestic context, the domestic downstream oil industry still controls the transmission, if oil prices continue to rise, will be forced to raise oil prices. “In theory, the refining industry’s inventory cycle is two months, and now production is 80 U.S. dollars a barrel two months ago, the raw material for oil refining industry, from 80 to 85 U.S. dollars is the break-even point, if finished in another month Oil prices do not rise, oil refining industry, a loss is inevitable. “realistic Qi said. According to industry estimates, if the crude oil broke through 90 U.S. dollars a barrel, then the downstream petrochemical industries such as construction materials, Plastic , Chemical fiber, will undoubtedly be major area of loss, this situation has skyrocketed in 2008 when crude oil prices have been tested. Power industry is facing a loss again”Coal prices have been so worrying thermal power industry in the first quarter performance.” Datong Securities analyst Cai Wenbin told reporters. Since last year, the impact of rising international oil prices, the international coal price increases are synchronized. Currently the contract price of coal rose 12.5% coal price rise in the market more. At the same time, price increases only at the end of time, according to Datong Securities research, even large-scale thermal power enterprises in Shanxi Province, last year’s price increases could not offset the upward pressure on coal prices. In international oil prices soaring in 2008, the domestic power industry 5 large losses. It is reported that China’s coal linkage mechanism since the start of 2004, implemented in 2005, only one. For the thermal power industry, coal has been completely market-oriented, but the electricity market reform is also difficult to see. CPI electricity price in China account for a large weight of the composition of only average urban household electricity costs account for the total consumption expenditure on nearly 3%. “If inflation expectations in the current case of large price increases will further increase the upward pressure on CPI, which is the main reason for inaction price.” A thermal power company official said. The linkage mechanism according to coal, electricity prices up even, and can only make up 70% of the cost, 30% of the cost increase to be digested by the enterprise itself, which fired power plants is another severe test. Aviation industry is not sensitive to high oil pricesOil prices continue to rise, pay the costs of running the industry will significantly uplift, particularly the cost of oil accounts for up to 40% share of the aviation industry and water transportation. “Oil prices will definitely impact the aviation industry, even if the start fuel surcharge, also depends on the situation with oil prices match.” Huang Bin Air China secretaries to directorate told reporters. GF Securities Huang Ding believes that the economic recovery, the airline load factor rose, bare ticket prices have also increased, thus the recovery of oil prices impact on airlines performance tends to neutral. 2008 overall loss of the domestic airline companies. Recently, Air China listed companies in the aviation industry, the first published report of 2009 results for Yu Ying, Yu Ying main reason is the rise in load factor, which confirms the yellow side from a small point of view.
High oil prices are injured in petrochemical Shahui carbine power – high oil prices, power Petrochem
Article by jekky
Comeback this year’s high oil prices, the price has not yet fully market-based refining and power industries most affected, if Crude Prices continued to rise, will have triggered Oil Price increases and electricity prices rise, the final transfer of all Energy And raw materials industries, and thus greatly improve production costs, so that just the recovery of domestic Economy Challenge. Refining industry break-even point is around the corner”Basically, the current cost-push price of crude oil, mainly from the downstream industry recovery, so it is affordable.” Realistic national security analyst, said Qi. The first quarter of this year, in Home Appliances Countryside, Textile Exports pick up, and automotive industries, real estate industry needs driven by the petrochemical industry in China increased by a new round of the starting point. According to newspaper statistics, first quarter results in the disclosure notice of the 87 companies, cloud-dimensional shares, Huafeng Spandex , Fuyao glass nearly 10 chemical companies are expected, first quarter, or losses or increased significantly. CPI at a high level in the domestic context, the domestic downstream oil industry still controls the transmission, if oil prices continue to rise, will be forced to raise oil prices. “In theory, the refining industry’s inventory cycle is two months, and now production is 80 U.S. dollars a barrel two months ago, the raw material for oil refining industry, from 80 to 85 U.S. dollars is the break-even point, if finished in another month Oil prices do not rise, oil refining industry, a loss is inevitable. “realistic Qi said. According to industry estimates, if the crude oil broke through 90 U.S. dollars a barrel, then the downstream petrochemical industries such as construction materials, Plastic , Chemical fiber, will undoubtedly be major area of loss, this situation has skyrocketed in 2008 when crude oil prices have been tested. Power industry is facing a loss again”Coal prices have been so worrying thermal power industry in the first quarter performance.” Datong Securities analyst Cai Wenbin told reporters. Since last year, the impact of rising international oil prices, the international coal price increases are synchronized. Currently the contract price of coal rose 12.5% coal price rise in the market more. At the same time, price increases only at the end of time, according to Datong Securities research, even large-scale thermal power enterprises in Shanxi Province, last year’s price increases could not offset the upward pressure on coal prices. In international oil prices soaring in 2008, the domestic power industry 5 large losses. It is reported that China’s coal linkage mechanism since the start of 2004, implemented in 2005, only one. For the thermal power industry, coal has been completely market-oriented, but the electricity market reform is also difficult to see. CPI electricity price in China account for a large weight of the composition of only average urban household electricity costs account for the total consumption expenditure on nearly 3%. “If inflation expectations in the current case of large price increases will further increase the upward pressure on CPI, which is the main reason for inaction price.” A thermal power company official said. The linkage mechanism according to coal, electricity prices up even, and can only make up 70% of the cost, 30% of the cost increase to be digested by the enterprise itself, which fired power plants is another severe test. Aviation industry is not sensitive to high oil pricesOil prices continue to rise, pay the costs of running the industry will significantly uplift, particularly the cost of oil accounts for up to 40% share of the aviation industry and water transportation. “Oil prices will definitely impact the aviation industry, even if the start fuel surcharge, also depends on the situation with oil prices match.” Huang Bin Air China secretaries to directorate told reporters. GF Securities Huang Ding believes that the economic recovery, the airline load factor rose, bare ticket prices have also increased, thus the recovery of oil prices impact on airlines performance tends to neutral. 2008 overall loss of the domestic airline companies. Recently, Air China listed companies in the aviation industry, the first published report of 2009 results for Yu Ying, Yu Ying main reason is the rise in load factor, which confirms the yellow side from a small point of view.
Wholesale and retail of refined oil price adjustment at the same time price increases imminent
Article by jekky
Spent more than four months “policy dull period” of refined oil market, oil prices back on the waves below 81 U.S. dollars, meaning is difficult to restrain rises in the domestic wholesale price of refined oil products throughout the recent substantial rise in retail prices preferential margin is also significantly narrowed or even canceled. Interest-Wang Liao Shun energy analyst, told reporters on the China Securities Journal that if the scheduled price adjustment at the end of oil, diesel oil wholesale and retail price gap may narrow, while the terminal retail market but also can return to competitive landscape, there benefits cut prices. Wholesale and retail price increases at the same time Recent domestic oil products throughout the wholesale and retail prices had become the “unbridled” trend. According to CBI data, the mainstream of the wholesale price of diesel rose 100 yuan / ton, gasoline rose 200 yuan / ton; the same period, retail prices for several months also significantly narrowed since the concessions, or even return to the maximum retail limit. Beijing, Shanghai, Guangzhou, Nanjing, Ningbo and other places have narrowed the gas stations offer gasoline and diesel retail sales, while the original had a margin of preference of gasoline up to 0.3-0.5 yuan / liter or so. Interest-wang said the main unit’s goal is to push around the wholesale and retail prices to the local price ceiling. Therefore, through the international crude oil prices, the closer the date when the price adjustment would not rule out two major companies to continue to push short-term high market prices. According to Xinhua News Agency has just released inventory data, 2 the end of China’s refined oil inventory (steam coal and firewood) 1,968 million tons, an increase of 1.9 million tons at the end, an increase of 10.7%; of these, gasoline inventories 6.38 million tons, down 3.8%; diesel fuel inventories 11,53 million tons, increasing 21%. Analysts pointed out that since the March into spring, the market for diesel fuel consumption, there is expected to enhance the original, while the domestic consumption of gasoline have been relatively strong, tight gas resources. Meanwhile, in March after another overhaul major domestic refineries, while also lowering the market supply. Price adjustment range is limited Rise in international oil prices is still the biggest promoter of this round of price increases. Increase in refining costs pulled up the wholesale price of refined oil, while the expected price adjustment of the Development and Reform Commission strengthened, intermediaries increased stockpile of intent. As of March 22, three consecutive 22 working days weighted average price of crude oil changes in the rate of 3.45% from 4% of the price adjustment within a whisker of the benchmark. In accordance with the recent trend of oil prices, if it continues to be maintained at 80 U.S. dollars or more shocks, the weighted average price of crude oil at the end of the three places the rate of change of more than 4%, refined oil price adjustment will touch on “red line”, or may reach 200 yuan / ton. However, Liao Shun said that at present most of the market country II Main 0 # diesel oil wholesale price of the wholesale selling price from the top there are 200-300 yuan / ton in the distance, 93 # gasoline States III from the wholesale selling price the highest wholesale prices are 900 — 1,000 yuan / ton distance. Diesel wholesale prices push inflation rate higher than the possible price rises. At the same time diesel fuel demand is not strong, so after the wholesale and retail price adjustment may also be reduced spreads. Supported by the demand for petrol is expected to maintain the wholesale and retail price differences. ”In the end the retail level, pre-formed pattern of market competition there will be no fundamental change, gas stations is likely continue to have promotions and other competitive activities.” Liao said Shun. Cho Chong IT analysts believe that crude oil because of the three places the rate of increase when compared to the last price adjustment is limited, so even if the price adjustment at the end of its range will be limited, while the actual market wholesale price increases will also be difficult to achieve price-cap. Slower recovery because of market demand, may increase the price adjustment after the market’s “slump” posture.
About the Author
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