Author states the physical spot oil price is $140 while futures are at $110, claiming this divergence is due to US manipulation of futures markets. Cites Reuters article on potential Treasury intervention. Argues that enforcing low prices leads to faster depletion of the commodity (oil), shortages, and ultimately a dramatic price spike, as seen in historical examples like the 1970s US gas lines. The author strongly implies that the physical oil shortage will overwhelm the paper manipulation, causing prices to spike "in the coming weeks," making a long oil position profitable. The predicted supply crisis may not materialize. Government intervention could be sustained or effective. Global demand may fall, mitigating shortages.
Author states the physical spot oil price is $140 while futures are at $110, claiming this divergence is due to US manipulation of futures markets. Cites Reuters article on potential Treasury intervention. Argues that enforcing low prices leads to faster depletion of the commodity (oil), shortages, and ultimately a dramatic price spike, as seen in historical examples like the 1970s US gas lines. The author strongly implies that the physical oil shortage will overwhelm the paper manipulation, causing prices to spike "in the coming weeks," making a long oil position profitable. The predicted supply crisis may not materialize. Government intervention could be sustained or effective. Global demand may fall, mitigating shortages.