If the stars are lit, it means someone who needs it. If the price of the main commodity in world trade falls when all reasonable arguments, according to the rules it needs to grow, then it is someone who needs it.
Let’s see who is interested in the fall of oil prices, and who is behind this process.
Let’s start learning the game and its rules. At least any liberal anywhere in the world will tell you the rules of the “invisible hand of the market.”
Rule one. With falling prices for any product of its production is reduced, which leads to higher prices. This in turn leads to a reduction in demand, which already controls the level of prices, supply and demand. These “swing” is the famous “invisible hand”, which is itself supposedly regulate everything.
Second Rule. When serious causes that may affect the level of production and way of delivery, the price level changes. If your product does not produce, do not bring – to increase the price for it. If it does not sell – its price is reduced.
Far beyond the examples we will not go. The response by the Russian ban on the import of agricultural products from countries that support sanctions against the country, has led to the fact that a huge amount of fruits and vegetables in Europe remained in Europe itself. What happened to the price of fruits and vegetables? She went down. The notorious “Polish apples”, whose fate is so baked Russian liberals, plummeted in value. Goods do not sell. Goods lot, supply exceeds demand. Question: how in such a situation, according to the canons of modern liberal economy must be received by fruit growers? Where should send their “invisible hand”? They have to produce less fruit and vegetables in the next season, while the price of their goods is equalized and can again return to the original figures. Maybe in this situation the association of agricultural producers in Europe to come to a conclusion … on enhancing production volumes? For prices fell even more?
Why there are different associations of producers? To adjust the level of prices by adjusting production levels.
Take another example – Baltic producers of milk and dairy products as a result of Russian sanctions suffered serious losses. The Russian market was closed, and the milk and cheese left. The result – a decline in prices in these countries, and a feverish search for new markets, which is, of course, came to nothing lead. Japan will not replace Russia for Estonian dairy industry. Maybe in this situation, milk production in Estonia increased, while it would be a conscious action, not the incredible coincidence of facts?
Now back to oil. It is important to understand a few important points.
1. Oil is not a seasonal product, the winter of our planet is constantly in one of its halves, and the chemical industry and all other hydrocarbons consumed year-round.
2. The fall in demand for oil can only happen as a result of serious economic problems. We got hundreds and thousands of factories around the world, hundreds of millions of car owners stopped to fill their cars with fuel.
Oil demand is not falling, its consumption is not reduced. Meanwhile, we are seeing a decrease in oil prices significantly. What kind of miracles?
The war in the oil-rich region with the risk of cessation of production or transportation has always led to an increase in prices, but certainly not to drop it. And what do we see today? The largest oil-producing Gulf countries are in the immediate war zone, or even take part in the fighting as the Saudis in Yemen. Russia – the largest supplier of oil to the world market – a civil war on its borders in Ukraine and took an active role in the Syrian issue. But oil prices are falling and falling, at least a minimum of updating.
And what makes the organization of Petroleum Exporting Countries OPEC? Essentially nothing. Collected, but a decision to reduce production is not accepted. But this is the only measure, according to liberal theory, which can swing the price up.
So why not oil producers reduced production?
Why the oil market does not react to the hostilities in the Middle East, which previously was the cause of price hikes?
Who needs that oil prices are falling?
It turns out that supply and demand are no longer determined by the price of oil. Prices are determined by the market futures – contracts for the supply of hydrocarbons at a fixed price on a fixed date. In the market of sale of these papers is ten times higher than the actual sale of oil. This means that there is huge money that can be directed in the right direction by increasing or decreasing the value of the futures. And this is the benchmark for all other market participants – growing futures will increase the price down – we must prepare for a drop in its strategy and build shopping sales on this basis.
Cash machine determines the direction of price movement. But OPEC might agree to lower production volumes and to achieve a rise in prices and sell at the same price less the amount of hydrocarbons? Could – but can not. Saudi Arabia and other Gulf countries – eminent satellite – the US refuses to reduce production. Moreover – they are increasing it. To demand began to really keep up with the supply of oil. And make it permanent application. Logic where? There it. There is political expediency. The Saudis and other Cathars suffer losses, but they “typewriter” dollar offset their losses through various schemes. Let not all, but compensates. Just as the EU Estonian milkman compensate their losses due to the closure of the Russian market. Let not all, but compensates.
In the course are, and “other” methods.
October 3, 2015, “OPEC President, the former head of the Ministry of Oil Industry of Nigeria Dizani Alison-Madueke was arrested in London on suspicion of committing crimes of corruption.”
The allusion is quite clear, direct allusion. For anyone who does not understand.
And this is the result.
“Today, December 7, world oil prices to the lows of 2015, reacting to a message after the OPEC meeting, at which it was decided not to change oil production quotas. This was according to the auction.
As a result, as of the morning the price of January futures for North Sea petroleum mix of mark Brent fell by 1.17% – up to 42.72 dollars per barrel. January futures price for WTI crude oil fell by 0.99% – up to 39.58 dollars per barrel.
Note in Vienna December 4 last regular meeting of OPEC. This organization has not made a decision to change oil production quotas at 30 million barrels a day, in spite of low prices and an overabundance of “black gold” in the market. As a result, OPEC decided to keep the level of actual production, which exceeds the quota by 1.5 million barrels per day.
Officially, the quota in 2011 is 30 million barrels per day, but it exceeds the organization regularly. As explained by the Minister of Petroleum Resources of Nigeria Emmanuel Ibe Kachikvu, now the level of oil production by OPEC is 31.5 million barrels per day. ”
The price of oil under pressure down … the producers themselves, directly related to the Americans.
And here is an example of “compensation” from the US oil-producing states that “their”.
“MEXICO CITY, Dec. 9 – RIA Novosti. Mexico gained on Tuesday around $ 6.3 billion in the form of insurance, which it acquired last year from a pool of international banks to cover possible decline in oil prices, reported the Ministry of Finance of the Latin American countries. ”
Russia, Venezuela, such insurance just do not get it. They should choke. For leaders in countries that produce oil, it is obvious that the world power with the aim of pushing the price collapse. In this situation, reduce the production of:
• silly, because the price is still going down, but you just lost money by selling at a cheap price less oil;
• downright dangerous, you can very quickly become “corrupt” or “dictator” and even get in a plane crash.
And now, OPEC and other countries not included in it (Russia) do not see any sense in reducing production. They not agree, and have no reason to negotiate.
The last time the United States began to lower oil prices immediately after the events in South Ossetia in 2008. The price then dropped to $ 40 and stayed at that level for about 4 months, falling to $ 147 in three months.
How the United States will be able to keep the price of oil at the bottom, we will soon see …
And the last thing I would like to see. IGILovskaya oil – a drop in the sea, and no weather does not, in any way in the fall in the price is not affected. At the same time OPEC countries could take the initiative to combat the smuggling, which undermines their financial stability. But all are silent. Russia is fighting alone.
Everyone knows who is behind the gap in Russia Daishev (LIH).
And who is behind the desire to bring down oil prices.
Full Brain Stop 