Take heart, we only need to wait approximately 60-days until we see a major price decline in diesel and gasoline prices in the USA. Once the midterm election is over, prices will begin their retreat with the finished collapse mid-January.
The non-pretending reality exists within a generally non-western perspective that current “market prices” are not driven by oil supplies, refining capacity or the other various justifications used by the speculators, traders and various regional spot-market control systems. The prices are being controlled in order to influence political outcomes.
Once those political influence operations are concluded, the stakeholders in the market price approach will moderate their justifications accordingly, and prices will plummet. Sound nuts? Well, let me explain who agrees.
On my side of the argument is Russian Federation President Vladimir Putin, who does happen to operate the world’s largest gasoline station – at least, according to the professional republicans. Others on my side include Chinese Chairman Xi Jinping, Saudi Crown Prince Mohammed Bin Salmon, Qatari Sheikh Tamim bin Hamad Al Thani, Turkish President Recep Erdogan and Venezuelan interim President Delcy Eloína Rodríguez Gómez.
Others who accept the reality of this position, albeit with various political limits to their ability to speak openly about such matters, include President Donald J Trump, Treasury Secretary Scott Bessent and Secretary of State Marco Rubio. Unfortunately for this aligned group they are stuck inside the largest western political system who controls global finance and world economic outcomes.
What all of these aforementioned names understand is that “market prices” are entirely detached from the archaic terminology behind supply and demand; a quaint concept that stopped applying years ago – but pretenses must be maintained or else the masses may find their pitchforks, see: DSA pitchfork suppliers.
A second subset of allies who unintentionally support this perspective, includes those who use the terms “sold at a discount” where “sold at a discount” in reality means sold outside the western market pricing approach.
How many times have you seen the term “sold at a discount” repeated when you are reading about former Venezuela oil being sold to China, or current Russian oil being sold to India?
It’s such a common term it is accepted without anyone ever asking, ‘what is this discount you speak of, and how is it applied’? No-one seems to ask that part.
We accept this terminology created by “western market pricing” advocates just as we accepted the term “service driven economy” in the era before Donald Trump.
The reality is that ‘western market prices’ are not an outcome of supply, demand or even availability or production capacity. Western market prices are determined by speculators, traders and regional benchmarks created by “independent agencies.”
Remember those pesky housing loan bond rating agencies, Standard and Poor’s and/or Moody’s during the lead-in to the 2008 financial crisis. That type of rating ‘independence’ is akin to the benchmarks of these regional independent agencies within the energy markets; which is to say, they are not independent at all – they are part of the manipulated western financial system that determines ‘market pricing’.
Behind that curtain are the traders, speculators, ideological banks and financial systems who create the finance system for the energy market. Want to stop oil exploitation, change the lending requirements to favor windmills and solar panels etc. Not coincidentally changing these lending rules and regulations was Mark Carney’s former job. Does that sound like an open market approach?
Thus, when you really understand how this pricing is structured you begin to realize the price of diesel has nothing to do with the supply of it and the price is more controlled by those who wish to generate financial -or political- outcomes from it.
You don’t have to take my word for it, review the words of the world’s largest oil/gas producer about this rigged game. {SEE HERE} Wouldn’t Vladimir Putin be the subject matter expert?
“How, in fact, is the price of gas formed on the European exchanges? It is not determined by producers, but by exchange traders.”
In essence, right now “the west”, specifically Americans, are paying fuel costs based on market commodity prices. The most recent examples are oil, LNG and now the headline leading, diesel fuel. However, the actual supply of diesel fuel is not driving the price. The price is being driven by speculation and trading, which is based on arbitrary price formulas created by western multinational corporations and financial markets.
Right now, Russia is overproducing diesel fuel, and shipping it out of the country to allies. Yet diesel prices in the west are determined by commodity traders, and the pricing mechanism is disconnected from the supply. {SEE HERE}
This is why Secretary Bessent essentially said yesterday, he was “evaluating” calls for a U.S. export ban on diesel. Bessent knows it makes no sense to halt U.S. exports of diesel fuel, because (a) the US has no ability to store it, and (b) if we produce more than we can store, that doesn’t lower the USA price.
Our US diesel supply doesn’t lower the US diesel price because the price is set by market traders, by the western financial markets, not by production or supply. There is a disconnect. It’s the same reason why Oranges grown in Florida cost the same as Oranges shipped into Minnesota. Local supply does not determine local price; the rigged commodity market does.
The USA could be swimming in diesel fuel and yet the price at the pump remains $6/gal.
Ironically, or not, Sylvain Charlebois, a Canadian describing the potash issue, exposed the western price manipulation in this article {SEE HERE} when ultimately, he asks, ‘how can Belarus sell potash so cheap’, and ‘Belarus could put pressure on Canadian potash prices’.
If Potash pricing is determined by western market commodity prices, then how can America get a cheaper fertilizer product for their farmers by buying from Belarus? The answer is in the part of the conversation they don’t want us to have.
Belarus can ship the product far cheaper to the USA because Belarus doesn’t need to participate in the “western commodity” pricing structure. Belarus can increase production and sell at a price they determine, exactly like Russia.
Apply this level of potash thinking to oil, gas or diesel fuel, and you realize what BRICS have been arguing about western price manipulation. Suddenly the price is not attached to supply, demand or production capacity, but is really connected to an elite rigged game of market price controls.
The price of USA gasoline and diesel will drop as soon as the event behind the price control is concluded.
That event is the USA midterm election.
I’m sorry but I did not understand this analysis.
Speculators and traders are PART of the market. Always have been.
Market price is the level that reflects what ALL market participants are willing to pay at any given instant in time. This includes the traders and speculators, as well as the consumers, middlemen, and investors.
I don’t understand how any single participant can “control” the commodity price in this context.
You first have to stop or erase your historic contexts and start over. It’s not an individual trader issue. AI now has algorithmic bots to act as thousands of traders simultaneously speculating. Those thousands are actually one person.
Anyone know
WHO is / are
the “one person” (s)?
🤔
Thanks. Makes sense. Especially if making a profit is not the end goal.
A click of a mouse ..
CFTC commitment of Traders report bears you out. I posted the numbers below , on the NY diesel futures
I won’t try to even help you to understand it, because some of it is very idiotic, too me. This explains how it works. If you do read it, do it slowly and think about it.
Crude Oil Pricing: A Guide to How the Market Actually Works
I might be wrong, but I would think that this hasn’t helped.
Obama, O’Biden, Newsom, perhaps others.
Thanks for that. Combined with SD’s response, I understand how the mechanics work.
Still….somebody is happy to potentially lose a lot of money to do this manipulation.
“Belarus/BRICS” are not playing within the system you are describing.
They are playing on an alternate, but parallel system.
Ok and in 60 days Nevada will lose the only Republican in the house and maybe our governor.
PDJT has made a major mistake giving Iran any benefit of the doubt.
It is sad to see so many who have no idea how the market works.
This is the same angle that Promethean Action has been pushing. The price is set by the commodities brokers in “the city of London” such that speculators can maximize their profits. I don’t doubt that, but it kind of skips over the entire reason such exchanges were created – to provide “price discovery”. If the price were just a matter of production cost plus desired profit then what is the incentive for lower production cost or more production volume? And without the commodities market producers would have no way to hedge, putting their existence at risk. And if it’s just production cost that sets the price then by definition that says that nothing else matters. Not transportation risk, war, weather, politics, technology, etc. I don’t think I can subscribe to that.
So there is some truth to what they are saying. Third party market makers aren’t performing that function out of altruism. And sure, they are absolutely in a position to rig the game for political reasons. The commodity is just the vehicle to derive profit from, is doesn’t matter what it is, corn, oil, political influence. But when you are taking your economic advice from communists like Putin I think you have to take a step back and ask if that makes sense.
Sundance, I’m scratching my head a bit. Are you saying that the drastic drop in supply of fuel and fertilizer due to the Iran war didn’t cause drastically higher prices for the same?
Or that Trump was mistaken for asking Ukraine to stop hitting Russian refineries, out of concern for less supply?
My own work overlaps with energy markets and, yes, it’s true that speculation plays a part in pricing but in my 30 years of experience, the core factors are truly grounded in supply, production issues.
It’s less of a ploy to actually influence the election outcomes (it doesn’t really make moderates think that the DSA is a good idea) – it’s more of a ploy to use the narrative as rationalization after the fact, when seemingly the Uniparty has just enough votes/wins to achieve their desired outcome. This is why the media is heavily involved, before and after the event.
“Suddenly the price is not attached to supply, demand or production capacity, but is really connected to an elite rigged game of market price controls.”
The Promethean folks have been saying this for some time, that the controls are centered in the old City of London and its affiliated banks, insurances, funds, speculators, etc., etc. They say President Trump is upsetting this whole system, but so far it seems that he is still a prisoner of it.
Maybe it’s time for a dramatic re-alignment: Knock the old system back on its heels; create a new US/Russia/Arab Gulf (USRA) energy alliance, and take control of the prices!
Next week, President Trump will announce: “As of today, USRA oil will be $40 a barrel! The store is open!”
Maybe this short video (23 minute) will help people understand how markets can be controlled:
Here’s a summary:
“This video examines how Britain used trade deficits, shipping, insurance, financial clearing, and colonial intermediaries to redirect silver flows through its own economic system. By controlling trade routes, settlement mechanisms, and credit access, Britain shaped the global silver economy without formal ownership or direct extraction.”
Just substitute silver currency for oil, food, … by controlling shipping, insurance, futures markets, …. When people talk about “City of London” this is referring to how the old british colonial system learned to control things from afar…
Open interest is a bit under 300,000 contracts now. A few years ago, it was 400000. Commercial interest are net short and have been all year. The only group substantially long is the speculators and retail traders, who on most recent reports are net long 12000 plus contracts. That won’t move the market. All basis NY, I did not look up others. Brent’s always highest, it’s cost basis not manipulation, except that involved in skewing the cost basis.
It is interesting that the big money has been so short during tight supply. Reserves globally are truly thin, well below average. That suggest, as the article here does, continued expectations of a reversal, and possibly, forward selling because prices are elevated. That’s not that hard to see, I should have looked at that while at my desk.
Hope it helps.
“The prices are being controlled in order to influence political outcomes.”
With price relief projected in 60 days, the mission of the influencers has succeeded. Unfortunately, delayed gratification will not likely win voters who are fixated on fuel prices and lack an understanding of the associated politics.
Insightful
This makes me ill, not sure why as I have apent my professional career in AgriBussiness and Caegill,ADM,Bungee and a couple of other have been hurting American farmers for decades using the same market strategies put forth in this article.