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.