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  Nostalgia ain't what it used to be

Tuesday, 24 November, 2020

Told Ya

Date: 01 February, 2009

By: Chief

Imaget does feel good to be proven correct. It really does. Especially when it is from an outside source. Yep, I'll take it.

Okay, so just what on Earth am I patting myself on the back about? The false price of oil, that's what. Do y'all recall way back in October of last year, the 15th to be exact, I wrote a story titled "Crash and Burn?" Yeah, that one. Well one of the things I was ranting about was why was the price and oil and fuel dropping so dramatically? I mean we all know that Wall Street has no real value — all they produce is paper. And paper, as we all know, is worth zero.

But oil and fuel have an actual value. Oil and fuel are real products. Both are essential for our economy, let alone our very survival. Hence neither should have plummeted (as they did) when the stock market was flushed to the nearest waste treatment plant. However, the exact opposite happened. I surmised that the only logical and, well, reasonable explanation for such a happening was the price of oil and fuel had been set artificially high. I was correct. In the "Crash and Burn" story I wrote (talk about shameless self promotion — I love it):

"[W]hat if the unholy high price of oil was an artificially high price? In my way of thinking, that is the only logical and reasonable explanation as to why oil, which has an actual value, fell almost fifty percent in price per barrel."

And the International Herald Tribune backed me up (quoting the IHT):

"Private trading companies like Vitol and Phibro are storing oil in expectation of higher prices. They are taking their cues from markets where traders buy and sell contracts for future delivery of oil, which are signaling higher prices down the road.

"Adam Sieminski, chief energy economist at Deutsche Bank, noted that a trading company could buy oil at the spot price of nearly $40 a barrel, store it and sell a contract to deliver it in a year for about $60. 'You pay between $6 and $10 a barrel to store it, and you can make $10 a barrel', he said. 'That's why Cushing [oil storage facility] is filling up rapidly and people are leasing tankers'."

Oh, have no fear, it does get worse. Y'all are going to hate the next part.

Back in 2005 I wrote a story titled "The Cause of High Oil Prices." Well imagine that, that story was published the 15th of October as well (ya gotta love it when a plan comes together). In that story I wrote:

"To begin to understand the cause of the current stratospheric price of a barrel of oil, and subsequently a gallon of gasoline, we must all understand what oil currently is. Oil is:

  • "A commodity.
  • "A monopoly.
  • "A particularly unique natural resource that is absolutely essential for (1) individual survival, (2) state economic survival and (3) national economic survival.
  • "Taken for granted."

I went on to explain how the price of a barrel of oil could be artificially inflated:

"What appears to be happening within the oil shipping industry is that quite a few VLCC and ULCC class ships are being taken out of service long before it would be necessary (based upon safe operation) and are either sold for scrap or converted into FSO's [Floating storage and offloading units].

"The FSO's sit at an anchorage in foreign ports or foreign offshore anchorages loaded with oil. Said oil is either off loaded to shuttle tankers for delivery or, at some future date, sold and off loaded to transportation tankers when the cargo owner negotiates a price per barrel that is acceptable to the owner. This is accomplished through either the spot market or the futures market or both. And, as one can tell, it is an extremely lucrative method to manipulate an already unstable market. One that is also easily accomplished.

"In short, if an owner wants a higher price, notify the futures and spot market. Traders go into a tizzy looking for quick, short term and high gains. It is one of the oldest and most commonly used 'tricks in the book'.

"This is not in any way a new concept. It has been done before by the sugar industry back in the late 1960's and early 1970's to produce a certain result — drastically higher prices by producing a shortage when, factually speaking, there was no shortage."

How does my 2005 story equate to what has been happening since the stock market took a huge dump? Well the International Herald Tribune said this:

"From the Indian Ocean to the South Atlantic to the Gulf of Mexico, giant supertankers brimming with oil are resting at anchor or slowly tracing racetrack patterns through the sea, heading nowhere.

"The ships are marking time, serving as floating oil-storage tanks. The companies and countries leasing them for that purpose have made a simple calculation: the price of oil has fallen so far that it is due for a rise."

Not bad. Two for two. Not bad at all.

Now there are other factors at play as well. Such as OPEC cutting back on production. Oil producers, both foreign and domestic shutting down oil pumping rigs and cutting back on production. And, as usual, refiners are also cutting back on the amount of fuels they are producing.

Furthermore the certifiable dirtbags on Wall Street are not playing, as in manipulating, the oil and fuels market at the present time. However, once the price starts heading back up you can make book that the brokers at the commodity, futures and spot market will do everything within their power (which is considerable) to keep the price of oil and fuel rising. All for their benefit and, obviously, to We the People's detriment.

This is all being done in an effort to stem the hemorrhage of money leaving the oil and financial industry's pocket. It sure as shootin' is not being done to benefit We the People. No way. Exxonmobile has just posted their highest ever profit — over $45 billion. Do you make that much in a year? Me too neither.

In other words by merely withholding oil and fuel from the market the oil industry and the financial industry, in time, will artificially force the price of oil and fuel back up to an area of their liking. Which is — the higher the better. After all, they already own Congress so who is going to stop 'em?

Personally, I think it is about time to not only shoot down the price of oil and fuel — in a permanent but civil way — but to out right line up against the nearest wall and shoot every broker, Wall Street fat cat and oil industry executive there is.

That may not be considered civil but it is effective.

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