Oil has surged, but the three-month trend is still down ~13%, even as prices spiked toward $90 on March 6. That matters for inflation. Cathie Wood dives deeper in the full March “In The Know.”
Real Oil Paper Oil (Futures) Finite Infinite contracts Physical Digital bets Stored in tanks Stored in servers Traded by producers Traded by speculators Moves on supply/demand Moves on sentiment
The Pinball Machine
The price bounces because:
· Speculators bet on rumors · Algorithms react to headlines · Leverage amplifies moves · Stop losses trigger cascades · No one is holding the physical
The Absurdity
If real oil holders were driving the price:
· It would be stable · It would reflect supply · It would reflect demand · It would be boring · It would be real
But they're not. The paper traders are.
The Punchline
The futures market is a casino where the prize is the right to buy oil at a certain price. The oil never moves. The digits do.
Doesn’t matter because we’re 38$ trillion in debt, with increased budget deficits and welfare spending, with Ai taking away jobs and only increasing the cost of energy and water, and interest rates on US bonds should be +15% like in the late 70s. Given the destruction of refineries on both LNG and oil in Qatar, Iran and Saudi, regardless of the Hormuz strait will take YEARS to add that supply back. Plus the the Ukraine/Russia war still going on oil prices should be well above $120 barrel.
5 Comments
Gas suppose to be cheap, morons controlling monolopizing it
Thank you, Cathy. Really appreciate your insights and analysis. 🥂
you've got to get better looking glass frames, I'm pretty sure you have the money?
The Real Oil vs. Paper Oil
Real Oil Paper Oil (Futures)
Finite Infinite contracts
Physical Digital bets
Stored in tanks Stored in servers
Traded by producers Traded by speculators
Moves on supply/demand Moves on sentiment
The Pinball Machine
The price bounces because:
· Speculators bet on rumors
· Algorithms react to headlines
· Leverage amplifies moves
· Stop losses trigger cascades
· No one is holding the physical
The Absurdity
If real oil holders were driving the price:
· It would be stable
· It would reflect supply
· It would reflect demand
· It would be boring
· It would be real
But they're not. The paper traders are.
The Punchline
The futures market is a casino where the prize is the right to buy oil at a certain price. The oil never moves. The digits do.
Pinball. 🎰⛽🪑
Doesn’t matter because we’re 38$ trillion in debt, with increased budget deficits and welfare spending, with Ai taking away jobs and only increasing the cost of energy and water, and interest rates on US bonds should be +15% like in the late 70s. Given the destruction of refineries on both LNG and oil in Qatar, Iran and Saudi, regardless of the Hormuz strait will take YEARS to add that supply back. Plus the the Ukraine/Russia war still going on oil prices should be well above $120 barrel.