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ANALYSIS=>>Was Insider Trading Responsible For Sharp Slide In Crude Oil Prices This Week?

Mar­kets were seem­ingly taken by sur­prise this week on crude oil prices, led by a $3 drop on NYMEX this past Mon­day. There have been a cou­ple of dif­fer­ent analy­ses offered on the recent oil price drop from Mon­day Sep­tem­ber, 17th.

The Reuters expla­na­tion is pre­dictable and may be too cur­sory.

The first expla­na­tion offered was of an algo­rith­mic pro­gramme gone wild, fol­lowed by a price cor­rec­tion due to being at recent highs of $120/barrel on BRENT and $100+ on NYMEX. These were the favorites, how­ever the drop in prices isn’t due to just one fac­tor, and pos­si­bly even a result of insider knowl­edge.

Octo­ber futures options expir­ing on Mon­day and the gen­eral con­tract expir­ing today cer­tainly had a cas­cad­ing effect, fea­tur­ing a $3 drop in 1 minute (on NYMEX) on Mon­day, before regain­ing approx­i­mately $1 at the close. This was the last chance for traders to get on board the lat­est trend and clearly the trend has con­tin­ued with crude falling Thurs­day below $91/barrel ($90.66) on NYMEX before clos­ing at at $91.87. NYMEX crude even briefly fell just below its 100-day mov­ing aver­age at $90.73, spark­ing strat­egy shifts.

Other rumors about the effect of pos­si­ble Saudi inter­ven­tion via increased pro­duc­tion and a poten­tial US elec­tion sur­prise from a Strate­gic Petro­leum Reserves release also weighed on mar­kets. The mar­kets are not a mono­lithic entity by any stretch and what tends to hap­pen is that regard­less of the pre­vail­ing notions, a trend can be started by one fac­tor but exac­er­bated by oth­ers. The fact is that the “mar­kets” are traders (or high fre­quency com­put­ers com­manded by traders, and it’s not always the news specif­i­cally which dri­ves mar­kets, as the human mind doesn’t always pro­duce the most eco­nom­i­cally effi­cient deci­sion. The “tun­nel vision” think­ing of a trader’s one track mind often obscures real news and trends are fur­thered by the rip­ples caused from the ini­tial change in num­bers. This logic applies to the high fre­quency trad­ing com­put­ers also which move mar­kets quickly just based on how trad­ing met­rics are ana­lyzed by expen­sive algo­rithms (which are gold on Wall Street).

Today, a more likely rea­son for the price move emerged. A reported meet­ing Tues­day between Cather­ine Ash­ton, nego­tia­tor for the United Nations Secu­rity Council’s 5+1 (the per­ma­nent mem­bers of the plus Ger­many) han­dling talks over Iran’s nuclear pol­icy, who met with Iran’s For­eign Min­is­ter Saeed Jalili for “infor­mal dis­cus­sions” on the sit­u­a­tion. This meet­ing was held on short notice and out­come is unclear but some feel there has been a pos­i­tive pol­icy sea-change in Iran, putting the onus on the West to help resolve the sit­u­a­tion.

In light of that news, emerg­ing reports of curi­ous crude oil trans­ac­tions points to insider knowl­edge. On Mon­day, pre­ced­ing the $3 drop in prices, “some 13,000 con­tracts of CME’s West Texas Inter­me­di­ate crude oil con­tract and 10,000 con­tracts of the Inter­con­ti­nen­tal Exchange’s (ICE’s) Brent/BFOE crude oil con­tract” were unloaded on the mar­ket by affil­i­ated sell­ers pos­si­bly ema­nat­ing from Saudi Ara­bia, accord­ing to Asia Times. It stands to rea­son that some indi­vid­u­als had early warn­ing that the Mid­dle East risk pre­mium, said to add $10-$15 to the bar­rel price, would be com­ing off the mar­ket price. With most traders look­ing for crude to trend higher com­ing in Mon­day the 17th, the turn-around on options day bears some scrutiny. Who­ever made these trades beat the mar­ket, prob­a­bly with high fre­quency trad­ing help and led the rest of the mar­ket lower for this weekly cycle.

What effect these devel­op­ments have remains to be seen as it gets lost in the fog of war, but in the short term, the global econ­omy stands to ben­e­fit from depressed prices.

The fact that cheaper oil will mean less profit for pro­duc­ers, such as Rus­sia, Venezuela Saudi Ara­bia, will not impact on Iran as they have been sell­ing for any­where up to 25% less than mar­ket price any­way due to the hos­til­i­ties and sanc­tions. That oil has to go some­where and China, among oth­ers, has been a will­ing buyer. The sanc­tions have not really done much other than cause a few headaches and extra plan­ning for Iran as the tem­po­rary effects are begin­ning to wane, which the Wash­ing­ton Post just noted yes­ter­day. The biggest prob­lem was the insur­ance com­pa­nies black­list­ing tankers car­ry­ing Iran­ian crude, but that has sub­sided as ship­pers have found var­i­ous workarounds.

A poten­tial deal with Iran to end the diplo­matic stale­mate will come with ben­e­fits to the West. The ben­e­fits of a deal

1. Cheaper energy costs to the West in the short term, help­ing to reduce strain on the econ­omy.

2. A thaw in the Russ­ian energy stran­gle­hold monop­oly over Europe, to which Russ­ian earn­ings are heav­ily reliant.

3. There is also the ques­tion of Bahrain where the rulers are seen to be los­ing their grip on the coun­try.

If Bahrain falls into the hands of the rebels, then America’s 5th Fleet, will no longer have a base and will also open up a weak flank towards Saudi Ara­bia. The Shi’ite rebels are said to be influ­enced by Iran and some Saudi Ara­bian oil fields are located in Shi’ite ter­ri­tory.

It would be more for­tu­itous to make a deal with Iran, which would have many ben­e­fits includ­ing avert­ing a nasty con­flict. The only way this deal would go through, is with China’s back­ing as Putin and Rus­sia will most cer­tainly not want to bro­ker such a deal that will strip them of future earn­ings and power.

China is only ever inter­ested in greater eco­nomic activ­ity via increased trade, cheaper energy and raw mate­ri­als, not in war per se. China will also be very prag­matic, pro­vid­ing the islands sit­u­a­tion with Japan de-escalates also, as it is some­thing nei­ther coun­try really wants to go to war over. These oil fluc­tu­a­tions are just yet another act in the the­ater that the Elites have pro­vided us with increas­ingly over the last 12 years and beyond.

Against this back­drop, Israel would be forced to tone down the aggres­sive rhetoric and resolve the ongo­ing Pales­tin­ian open sore of a prob­lem instead, unless there is a false-flag “event” of ques­tion­able ori­gins.

The prob­lem with any deal is that, at the high­est lev­els, the coun­tries in the coali­tion against Iran are all com­manded by New World Order col­lab­o­ra­tors. In the long run, the real solu­tion lies in West­ern pop­u­la­tions awak­en­ing to this fact. Amer­ica also has the poten­tial to be energy self-sufficient in the next 10 years or so if it makes a con­cen­trated on rebuild­ing. Europe on the other hand will need strate­gic mutual under­stand­ings for their energy needs to be sta­bi­lized.

Infla­tion­ary pres­sure from the new unlim­ited quan­ti­ta­tive eas­ing pro­gram recently announced by the Fed­eral Reserve is part of the rea­son equi­ties and com­modi­ties (now ex. oil) have con­tin­ued to trend higher, shrug­ging off neg­a­tive eco­nomic indi­ca­tors. Aside from the Mid­dle East ten­sions, with crude oil being a de facto cur­rency, the price would nor­mally be dri­ven higher by the extra “punch” from the Fed. These fac­tors had given some sup­port to crude oil prices but the impact of defla­tion­ary forces and new devel­op­ments from Iran may out­weigh the upward price pres­sures and will be an inter­est­ing trend to watch over the next cou­ple of weeks.

This is ulti­mately a global con­ver­sa­tion for free­dom from tyranny, as oil wars con­tinue to break out and it remains the pri­mary source of energy for bil­lions of peo­ple. Access to energy con­trols life for most peo­ple and it will only be a good thing if this dev­as­tat­ing war is averted.

Author: umbilicalgun

i am a mother, i care deeply about children and the suffering that illegal corporate WAR inflicts follow @lisa_alba for the true news information is king, the more you know the truth, the better choices you can make, in the last 5 years, since i began writing and informing, i have seen the conversation change dramatically. We must keep up the fight, it is vital to the survival of our children and grandchildren. “Rise like Lions after slumber In unvanquishable number- Shake your chains to earth like dew Which in sleep had fallen on you Ye are many-they are few.”



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