Hello friends. OPEC controls a lot of the oil supply, and they can essentially set the price of oil to whatever they want within reason. It is often said that Power Corrupts. The sheer level of power wielded by these people is not something a retail trader can ever imagine, so it stands to reason that the sheer level of corruption inside of the oil market is also not something a retail trader can ever imagine.
Nobody seems to remember when or why oil went below zero. It was a liquidity play by OPEC, since they wanted to drive out all of the USA based competition in the energy production markets, and claim a larger share of the market. They also wanted to liquidate the massive banks which they knew for a fact had taken out huge leverage at low interest rates to hopefully earn a yield on commodity markets. They were able to do BOTH of these things by selling off their massive reserves of oil to push the prices down artificially, and they ultimately were allowed to buy back that oil for less than zero thanks to their genius plan.
But their plan isn't over; That part was only the beginning. Once you corner most of the production for a market, then you corner most of the supply for the market, and then finally you mark up the prices and sell off to unsuspecting fools. They have completed step 1, 2, and 3. Now they need to complete step 4: sell off to unsuspecting fools. This requires liquidity which the market doesn't naturally provide, because these oil billionaires are selling to tiny sheep who don't have much money. So naturally they need to corall the sheep in such a way that they can sell as much oil as possible for as high of a price as possible. This means they will most likely need to sweep the prior high on oil by buying it up more, before sending it down down down.
Thanks for playing.
Nobody seems to remember when or why oil went below zero. It was a liquidity play by OPEC, since they wanted to drive out all of the USA based competition in the energy production markets, and claim a larger share of the market. They also wanted to liquidate the massive banks which they knew for a fact had taken out huge leverage at low interest rates to hopefully earn a yield on commodity markets. They were able to do BOTH of these things by selling off their massive reserves of oil to push the prices down artificially, and they ultimately were allowed to buy back that oil for less than zero thanks to their genius plan.
But their plan isn't over; That part was only the beginning. Once you corner most of the production for a market, then you corner most of the supply for the market, and then finally you mark up the prices and sell off to unsuspecting fools. They have completed step 1, 2, and 3. Now they need to complete step 4: sell off to unsuspecting fools. This requires liquidity which the market doesn't naturally provide, because these oil billionaires are selling to tiny sheep who don't have much money. So naturally they need to corall the sheep in such a way that they can sell as much oil as possible for as high of a price as possible. This means they will most likely need to sweep the prior high on oil by buying it up more, before sending it down down down.
Thanks for playing.