Doing what they can to PUSH UP the price of crude and gasoline prices. This mornings’ WSJ talks of rising prices on crude due to “OUTPUT CUTS”. A total ruse...while the glut oil sits in tankers, etc.
The report says the russkies and Saudis have come to an agreement on controlling output. I’ll believe it when I see it. The Iranians are gearing up and will flood the market with additional oil. The Saudis and Russians are not going to lose share to them. Meanwhile, the frackers keep fracking.
And that is how the oil market is rigged. The output cuts are all Kabuki and designed to give an excuse to ramp up prices. There is no country - not one - that has agreed to a production cut, but just making that statement provides the excuse to run up the price. The oil will flow as it has. The tankers will still be backed up for another 3 to 6 months.
The world remains awash in oil. The fundamentals have not changed one bit in the past six months outside of currency fluxuations. There is no legitimate reason for the run up in crude prices from ~$31 per bbl to ~$45 per bbl.
Not sure what the excuse is for prices jumping so high this time, but you just know there will be some excuse. Many who remain in the O&G towers downtown 'earn' their keep by developing such excuses! The 'energy industry': creating jobs for pathological liars for over a hundred years!
There's a cost associated with playing that contango...bullish perhaps for shippers.