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When Not Even "Terrorism" Can Boost The Price Of Oil...

Tyler Durden's picture




 

There was a time, not so long ago, when "terrorism" was great news for the oil complex (and thus energy stocks). Since The Fed enabled the unleashing of expensive American shale oil, that appears not to be the case anymore... (until the radical ideologs start attacking Oklahoma and Texas?)

Pre-Shale...

 

Post-Shale...

 

Ipso Facto: Terrorism is "unequivocally good" for Americans?

 

Charts: Bloomberg

 

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Tue, 12/08/2015 - 15:22 | 6895163 Chuckster
Chuckster's picture

?

Tue, 12/08/2015 - 15:54 | 6895332 swass
swass's picture

"When Not Even "Terrorism" Can Boost The Price Of Oil..."

... well, in this case, the terrorists are selling oil.

Tue, 12/08/2015 - 18:13 | 6896081 Angel_Eyes
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Tue, 12/08/2015 - 15:23 | 6895164 Truther
Truther's picture

Nothing seems fucking right anymore. Probably see $28 to $23 bottom before the SHTF

Tue, 12/08/2015 - 15:40 | 6895251 Bunga Bunga
Bunga Bunga's picture

tenish

Tue, 12/08/2015 - 15:50 | 6895312 nuubee
nuubee's picture

What we're discovering, is that oil is just another form of fiat.

Tue, 12/08/2015 - 15:25 | 6895171 Nex
Nex's picture

Oil price is where it is because of politics. But question is good: why ISIS never attacked some big oil pipeline but attack cities like London, Paris? I think is harder to hit big cities in west than some pipeline in ME and that will be much greater problem for west, very strange.

Tue, 12/08/2015 - 15:24 | 6895174 cpnscarlet
cpnscarlet's picture

No, Virginia. There is no rational explanation for anything anymore...so you might as well believe there is a Santa Clause with a workshop full of elves at the North Pole.

Makes as much sense as anything these days...like a communist sympathizer in the White House.

Tue, 12/08/2015 - 15:25 | 6895177 Professorlocknload
Professorlocknload's picture

Terra vs. Algore Carbon tax,,,and the winner is?

Tue, 12/08/2015 - 15:28 | 6895192 cpnscarlet
cpnscarlet's picture

There isn't one radical Muzzy in the world with enough balls to consider any target in TX or OK. Those folks shoot back and hit things!

Tue, 12/08/2015 - 17:27 | 6895852 Global Douche
Global Douche's picture

And we have the guns! But God forbid if an Okie gets into a pissing match with many cops there, thanks to the ill-conceived HB 1381 passed with the pen of Her Majesty, the Sun Queen. A cop can literally slap a FELONY on anyone making physical contact with them, even out of uniform. Apparently, there's no duty for the cop to announce they hold the badge, which makes the law a total piece of shit (and bonanza for some high priced Tulsa/OKC lawyers - I'll just sit back and watch!)

Tue, 12/08/2015 - 15:29 | 6895197 aliki
aliki's picture

im surprised that CNBC isn't interviewing the girl from RBC who call the bottom at $100, then 90, then 80, then 70, then 60, then 50, then 40 ... only reason i can think of that they still employ that woman is that she was doing her job, that is, to get all of RBC's clients willing to buy what they wanted to short

Tue, 12/08/2015 - 15:35 | 6895230 MadVladtheconquerer
MadVladtheconquerer's picture

Its quite simple:  when even the terror organizations are selling oil, no one has an interest in seeing oil flows disrupted.

Tue, 12/08/2015 - 15:40 | 6895241 PrimalScream
PrimalScream's picture

ZH - don't count on it.

The situation in the Middle East is getting worse daily.  There's a Cold War and an economic war.  Some players in that game will see an advantage to a strategy that increases oil prices.  Do you really think that they can't find a way to make this happen?  That siutation can go downhill in so many ways. 

Tue, 12/08/2015 - 15:39 | 6895249 ReignDeer
ReignDeer's picture

release the kraken!

Tue, 12/08/2015 - 15:48 | 6895303 dot_bust
dot_bust's picture

The Fed is covering up foreign selling of U.S. Treasuries by pushing down the price of oil.

China and Japan Continue to Liquidate US Treasury Holdings: What It Means

November marked a record month for China in terms of the pace of its liquidation of foreign exchange reserves. The People’s Bank of China reported on Monday, December 7 that foreign exchange reserves, which mostly consist of U.S. Treasury debt, dwindled by another $87 billion in November. This constitutes a stunning 2.5% drop in one month.

http://247wallst.com/banking-finance/2015/12/08/china-and-japan-continue...

Tue, 12/08/2015 - 15:57 | 6895349 Rockatanski
Rockatanski's picture

interesting. sounds like a good ZH topic with responses i can learn from.

Tue, 12/08/2015 - 19:30 | 6896433 RMolineaux
RMolineaux's picture

I doubt that the Japanese are selling significant amounts of US treasuries, as this would be contrary to their objective of lowering the value of the yen.  In the case of the Chinese, they sold a lot of treasuries in the last few months to maintain the value of the yuan in the face of a strengthening dollar and their desire to enter the SDR basket of the International Monetary Fund.  Now that they have accomplished the latter, they can allow the yuan to float freely, as recommended by the IMF.   

Tue, 12/08/2015 - 16:45 | 6895637 cpnscarlet
cpnscarlet's picture

We know that the oil futures market is too big for long-term manipulation and is used by oil consumers and producers to maintain liquidity and supply despite swings in supply or demand. Simple Econ 101.

So, if rises in terrorism isn't enough to sustain the oil price, then doesn't the situation simply speak too how REALLY BAD THE GLOBAL ECONOMY is getting and how poor demand is? OK, there is excess supply, but it's OIL. Lower prices would be helping sop up some of that IF the global economy was at least a little normal.

I'm no oil expert, but a long-time investor. Most days now, I just sit in a corner with a bunch of dice trying to decide things like "over supply", "poor demand", "geopolitical effects", and "central bank intervention". I just hope this really is a controlled stomp on oil, because if it isn't, then most of the world is truly broke and getting broker.

Tue, 12/08/2015 - 17:17 | 6895799 Global Douche
Global Douche's picture

I agree with swass that the terrorists are selling oil, and bunga on the tens for a barrel of oil. Oil was barely over 10 bucks a barrel during 1998. It made for a cheap road trip from Tulsa to Chattanooga at 72 pennies a gallon! Not long ago in OKC, I got fueled up for 1.63/gal and have the pic to prove it. At least I live where the quakes haven't awaken me, but I won't knock on wood, lest I jinx myself into a 5 or greater Richter. There are women whose rides on the Wally World scooters could trigger these.

Tue, 12/08/2015 - 17:22 | 6895822 redd_green
redd_green's picture

Ba-lo-ney.  Oil price is manipulated by a few very big players.     Anyone who reads garbage correlation into the price of oil moves deserves what they get. 

Tue, 12/08/2015 - 17:30 | 6895869 farmboy
farmboy's picture

It has more to do with Citadel spoofing oil down

Tue, 12/08/2015 - 19:11 | 6896342 RMolineaux
RMolineaux's picture

 I hope that Tyler is not suggestng that frackers should reduce their costs by dumping waste process water into the nearest stream.  That is something we ideologues (note spelling) would certainly object to.  IMO, no purpose is served by attempting to make a correlation between oil price and "terrorism."  The recent price drop was obviously the result of a sovereign decision by the Saudi Monarchy to drive high cost producers out of business.  The targets were the US, Russia and Venezuela.  The obvious response is to rein in the power of the Wahhabi monarchies by reducing their military capabilities.  A withdrawal of the massive military aid which they receive from the US would, I am sure, make them more cooperative.  In any case, their current course of action is self-destructive.  They are rapidly depleting their petroleum resource while destroying their fiscal budget and also depleting their foreign currency reserves.

Tue, 12/08/2015 - 20:45 | 6896874 Youri Carma
Youri Carma's picture

Indeed 'normaly' a little oil pipe leak in Timbuktu would spike oil prices.

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