Don’t be fooled by crude’s calm façade—beneath the surface lies a coiled spring of volatility.
Right on cue, Bloomberg.com splashed an article on its front page over the weekend explaining why the price of crude has been so subdued in the face of potentially severe supply disruptions in the Middle East. Turns out the world is awash in oil, the article explained — not just because of the success of U.S. fracking, but also because the Saudis have been pumping oil like crazy to stabilize their market share.
The article was almost surely planted by Bloomberg’s masters in Washington to calm the herd. Energy markets are very heavily manipulated, and PR is frequently used to nudge quotes one way or the other, ostensibly “in the national interest.” Capping prices would appear to be a high priority at the moment, superseding the $100-a-barrel needs of traders and speculators who thrive on volatility.
But who is kidding whom? Just beneath the veneer of eerie, artificial calm lurks enough pent-up panic to push quotes from a current $72 to $100 literally overnight. That’s why I’m sticking with a forecast from a week ago that August Crude will hit a minimum $86. In the meantime, don’t be lulled by the way bulls were rebuked this morning with a so-far $8 reversal from 78. Too many things could go wrong for oil prices to be this docile, and for stocks to be hovering so close to record highs. Only fools are buyers at these levels.
FREE TRIAL OFFER
Be sure to try the premium Rick’s Gold and Bitcoin Radar and lock on to accurate gold and Bitcoin price targets and sharp strategies to keep the turbulence of these markets on your screen, and not on your nerves. Complementary to the radar is the premium Rick’s Trading Room, a 24/7 hub of market-savvy traders sharing real-time updates and actionable ideas. It’s the ultimate combo. Sign up for a free 7-day trial today.