Big Players have been lately buying oil at $43/bbl and filling up supertankers, and then PARKING those supertankers in port to wait and much later unload to fill oil futures contracts later at higher prices. This story has been covered on CNBC and others in last 24 hours. This speculative buying involved many millions of bbls of oil, to fill up countless supertankers used as floating warehouses.
It’s pretty simple really,
oil companies are drastically cutting back on exploration because it is not profitable at $40 a barrel
– they are buying what oil that they can find right now (with the bazillions of dollars they made this year when oil was at $140 a barrel)
– they know that sooner or later, all the cutbacks in oil production are going to lead to a snap back in oil prices, sending them upwards fast
– nobody is going to be able to start pumping it out of the ground fast enough again to take advantage of the higher prices
– oil companies say “Hey, it just so happens we’ve got all these supertankers sitting here with oil in ’em”
– stored oil is sold to highest bidder
– oil companies laugh all the way to the bank (if there are any left a year from now)
In other words, have the oil companies started their own strategic oil reserves because they know a year from now that there won’t be enough oil to go round?
