Speculators and political posturing disrupt oil and gas fundamentals
Tom KirkmanIndependent Project Manager
Market speculators and political posturing are the flies in the ointment of global oil & gas supply and demand fundamentals.
And political leaders and oil & gas market speculators have apparently gone stark, raving mad in their virtue signaling. As in foaming-at-the-mouth hysterical irrationality.
===================
“The growing chaos in the energy market heightened on Wednesday after sanctions against Russia caused the pull-out of major Western energy companies from the country and traders shunning Russian oil cargos.
… Although the United States has not yet targeted Russian oil sales as part of its sweeping economic sanctions following the invasion, US traders have already acted to put such imports on hold, disrupting energy markets.
… Speculators who invest in the future of such commodities as crude oil can have a significant effect on its price as well. Crude oil speculation is much like other forms of investment – the speculators are basically “betting” on whether they believe the price of the commodity will rise in the future.
If a speculator buys oil reserves at an artificially-inflated price (i.e. higher than its current market worth), this will cause the producers to desist trading with other buyers, in the hopes of selling their oil at a similar price in the future. In this manner, the prices can be artificially driven up.
… President Joe Biden’s administration has warned it could block Russian oil if Moscow continues its aggression against Kyiv. However, Psaki said the White House is considering how that could rattle the markets.
“That’s something we heavily weigh,” she told CNN separately. …”