Money & Economics

mat200 said:
Unlike OPEC, which traditionally manipulates oil prices by adjusting supply, China exerts control by manipulating demand. By deciding to stop purchasing oil and instead relying on its vast stockpiles, China can force global prices downward.
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Sneaky. Such a simple plan... and someone was thinking ahead.
 
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mat200 said:
Theory, why is oil price so cheap ( see the Iran thread discussion we have had on questioning and wondering what is really going on )

China China China

Theory is that China has decided that it will control the demand by building a massive oil storage out and filling it with cheap oil ..


China Replaced OPEC — And Nobody Is Talking About It


This video, featuring Troy W. Eckard of Eckard Enterprises, explores how China has positioned itself as the world's new "swing demand" player in the global oil market, potentially shifting power away from traditional supply-side influencers like OPEC.

Key Takeaways:​

  • China's Massive Storage Strategy (1:37 - 2:35): Over the last decade, China has built enormous storage capacity—estimated between 1.2 and 1.5 billion barrels—which is roughly twice the size of the United States’ Strategic Petroleum Reserve.
  • Control Through Demand (3:31 - 4:12): Unlike OPEC, which traditionally manipulates oil prices by adjusting supply, China exerts control by manipulating demand. By deciding to stop purchasing oil and instead relying on its vast stockpiles, China can force global prices downward.
  • Market Manipulation Mechanics (4:56 - 6:02): By intentionally halting imports, China can create a temporary supply glut. Once prices drop significantly due to this lack of demand, China enters the market to purchase large volumes of oil at lower prices, effectively replenishing its reserves at a discount.
  • Recommendations for the U.S. (6:32 - 7:35): Eckard argues that the United States should similarly invest in a much larger strategic storage capacity (1 to 3 billion barrels). This would allow the U.S. to buffer against OPEC supply shocks without forcing domestic producers to sell their oil at deflated prices during temporary market gluts.
Conclusion:Troy W. Eckard concludes that China has successfully become the number one swing player on the demand side, fundamentally altering how global oil markets operate (7:35 - 8:25).
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I've seen that. And while they do have a strong position, it doesnt fully explain the US price.

Our SPR is all but empty.
Bessent has admitted on TV that he's manipulating futures by establishing huge paper short positions.

We do indeed import Oil contrary to what many think, because 1) we arent and havent been drilling baby drilling, and 2) much of our light oil isnt the right stuff for our refineries.

Sometime in the next 7-10 days we'll have to pay more or ration.
Will the Chinese help us out by halting imports again? (last week it was reported they had begun importing again) :idk:
 
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When even Amazon can’t feed their AI beast, there might be a problem ..


 
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Digging into this today… another key indicator that we’re close to the end

 
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Add this to the picture… we’re on borrowed time

 
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bigredfish said:
I've seen that. And while they do have a strong position, it doesnt fully explain the US price.

Our SPR is all but empty.
Bessent has admitted on TV that he's manipulating futures by establishing huge paper short positions.

We do indeed import Oil contrary to what many think, because 1) we arent and havent been drilling baby drilling, and 2) much of our light oil isnt the right stuff for our refineries.

Sometime in the next 7-10 days we'll have to pay more or ration.
Will the Chinese help us out by halting imports again? (last week it was reported they had begun importing again) :idk:
Click to expand...

Ahem...

 
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"Crack Spreads are saying FU to the paper market"


The Oil Market Is Broken: '2+3 Equals Fish' - w/ Fmr. CIA Larry Johnson
Mario Nawfal



This video features a discussion between Mario Nawfal and former CIA officer Larry Johnson regarding the state of the oil market, which they argue is "broken" and disconnected from reality (0:00-3:06).

Key takeaways include:

  • The Crack Spread Disconnect: Nawfal discusses how the "crack spread" (the difference between the price of crude oil and refined products) spiked, signaling that refineries are facing actual high costs rather than just engaging in price gouging (0:12-1:12).
  • Market Manipulation Claims: Nawfal references Philip Pilkington’s concerns that the oil market has been manipulated by algorithmic trading, comparing the situation to the movie The Big Short, where market participants see a total detachment from supply-and-demand fundamentals (1:31-3:35).
  • The Supply Reality: Larry Johnson explains that the U.S. is facing a significant supply gap of sour crude. He notes that while the U.S. relied on the Strategic Petroleum Reserve to bridge this gap, those reserves are depleting, which he believes forced the U.S. to seek a ceasefire with Iran around early April (5:18-7:07).
  • Geopolitical Strategy: The conversation shifts to the Trump administration's recent actions, with Johnson suggesting that recent military strikes were a high-risk gamble. He believes the U.S. is trying to secure a concession regarding control of the Strait of Hormuz by using a mix of sanctions relief (the "carrot") and military pressure (the "stick") to preserve the MOU and stabilize oil flow (8:42-10:02).
 
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Still holding my XLE at $53.90….
 
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