THE NEW OIL SPIKE: a classic example of bourse dysfunction

Creating ledger profit out of nothing helps the few & holds back the many

In the last hour, Brent Crude Oil advanced to $40 a barrel in London. This adds a sharp spike to the steady rise after three week of gains – the longest run since May 2015. This is what Barclays had to say about it:

“Investors and traders have been eagerly awaiting their chance to ride the ever-impending oil market rally. Announcements of a second year of massive upstream capex cuts and talks of an output freeze among certain OPEC and non-OPEC countries seem to have provided support to sentiment.”

‘Support to sentiment’. In the real world of economic stagnation, that’s tosh: who’s sentiment? Manufacturers on their backs through lack of demand…do they support the sentiment? Do they want to gear up for a fightback, only to find a critical raw material is more expensive than they expected?

Here is the sole reason why oil’s price has risen again: because crude producers (especially in the US) have cut the number of active rigs to the lowest level since immediately post 2009.

There is sound, far-sighted examination of conditions to provide capital growth for clients and assurance institutions; and there is opportunistic speculation which is risky for clients and injurious to the chances of recovery in the real economy.

Why risky? Because stockpiles are bigger than they’ve been since 1946 and still growing.

‘Ride the ever-impending oil market rally’? Oh per-leeeze: utter rot.

My own feeling is that this represents directionalisation to drag in sap-money, after which the directionalisers will getTF out again.

When things were looking dire aka real for once in January, the Dancing Dodos of Davos insisted there was ‘a disconnect’ between “market over-reaction and the data”. Now it’s briefly Business As Usual, they have nothing to say.

The real disconnect here is between financialised profiteering and the physical production of vital, useful, discretionary and luxury items.

I hope they all suffer a hard landing…right on their spike.

17 thoughts on “THE NEW OIL SPIKE: a classic example of bourse dysfunction

  1. The pros are using mega mega central bank money to manipulate commodities and massage inflation indices and exchange rates.
    The suckers get pulled in with our pension funds and then get spat out when they least expect it.
    QED when you’re above the law.

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  2. I’m afraid we are the ones who have the hard landing, and on their spike too..Twas ever thus, just more apparent now. Like all bubbles I suspect it will go pop soon, an ever increasing supply and glut, and continually rising prices are not a marriage made in heaven. Divorce will be on the cards before too long. Perhaps the $20pb is nearer than we might think.

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  3. Slightly off-topic, but have you seen Recep Ergobanned’s latest demands of the EU?!
    FFS that has to reason #666 to vote “BREXIT” n’est ce pas?
    WAD

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  4. Soz, itchy mouse-finger…
    “Slightly off-topic, but have you seen Recep Ergobanned’s latest demands of the EU?!
    FFS that has to BE reason #666 to vote “BREXIT” n’est ce pas?
    WAD”

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  5. …bourse dysfunction….
    Here we have another example of the G20 meeting in shang’dong’ a week ago. The reptiles get together to F*CK the market so that they can get the results that they need to cover up their mistakes. The banking and media whores were briefed to chime on time, and bingo, today, we get the story.
    It won’t last more than a week. Why? BECAUSE YOU CAN’T BUCK THE MARKETS.

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  6. We used to have ‘ the markets’.
    Today, ‘the markets’ are just the toolbox of the elites to keep the music playing.
    The main victims are the youngsters who will never get a pension.

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  7. Anyone listening to Cameron the liar this pm now knows why Boros the Good is on the Exit side, it’s simple logic, sad but true comes the point where the indefensible becomes undefensible. …. And that’s not sentiment !!!

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  8. Just a very sharp short squeeze before the next leg down right across the commodities group. Only wondering if gold is also benefitting from this trade or is really on an uptrend. I note that the Reserve Bank of Canada has completely sold out its gold. One less seller then.

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  9. I thought of the oil spike as a preparation (a’la plunge protection team) before the fall. Mitigation.
    Suggestions on ZH now point to the banks, who are hopelessly exposed and stand to lose big-time once things return to equilibrium.
    They will lose whatever.
    But it is just numbers in and numbers out. Manipulation.
    By giving producers a leg up the banks stand to lose a little less and their mates are forever grateful.

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  10. These rises and falls in the “market” are artificially engineered so that those crooks in the know can make a pile of money.
    All it takes is a little co-operation.

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