Posted 12/4/2023, 7:04:17 AM
OPEC+ Cuts Fail to Boost Oil Prices Due to Speculators and Algorithms
- OPEC+ announced production cuts which would normally increase oil prices, but prices actually fell due to speculative trading and algorithms driving prices down
- Short sellers are artificially suppressing prices by selling large volumes of oil which triggers algorithms to sell more, allowing short sellers to profit
- Lower oil prices encourage overconsumption, which is unsustainable since the futures market is essentially "printing oil" that doesn't really exist
- Politicians like Biden benefit from lower oil prices in the short term, but will face consequences when OPEC+ supply cuts eventually drive prices back up
- OPEC+ controls oil supply and stated it is reducing it, so eventually prices should rise regardless of speculative trading in the futures market