Friday April 15 2016
Oil Prices Rebound as Governments Target Big Oil
Zero Hedge provides a look at just how much oil is waiting to be off loaded.
This link is provided to emphasize the point we have been making in this space the last few months; new readers take note. The price of oil does not move on supply and demand. The price of oil moves on waves of social mood. Social mood is patterned on a robust fractal demonstrated by the Elliott Wave principle. That is high sounding technical talk better explained in my web log themarketperspective than via a general interest newspaper column.
But, our point is that oil bottomed along with the stock market on February 11. The news, then as now, was uniformly negative about bullish prospects for oil prices. New York analysts were eyeing $20. The storage tanks in Cushing, OK were full. Tankers were waiting offshore literally around the world to off load more oil than any buyer wanted. Worse shale producers with too much debt had no alternative but to produce more oil to make interest payments. Ditto for OPEC and other oil producers like Russia who had nothing else to sell. And so the outlook was uniformly bleak.
Amidst that chaos, we predicted a low and then an advance in price. And so oil has risen from just under $27 to near $44 just yesterday. Share prices of everything energy have also risen though are still quite depressed from the lofty levels of eighteen months back.
Energy and stock prices have fallen early this year and then risen in tandem. We are near the seasonal peak for stock prices at Tax Day. This bears watching. Stock prices have enjoyed a furious rally of 15% since February. But stock prices generally have not exceeded last year’s highs. That would be necessary for a real across the board break out.
Meanwhile, the climate change crowd is not giving up. Its latest target is big oil and the biggest of them all-Exxon Mobil XOM. The tactics remind me of the TET offensive created by a North Viet Nam General who had studied in the USA. He reasoned that if the North created such furious attacks on US positions in Viet Nam, the resulting publicity, whether the North was successful or not, would weaken US support for the war. That would eventually spread to Congress and a lack of funding for the War. And once TET launched in 1968, that is exactly what happened. Most Americans were not aware that the North lost the offensive, only that mass casualties were happening in what appeared to be an out of control situation.
Multiple legal salvos have been launched in what is obviously a coordinated campaign to discredit XOM. This has an antecedent. It is the same tactic used against big tobacco. The government eventually proved that big tobacco had withheld information that smoking was in fact injurious to one’s health. In the same way, the object here is to fish long enough to find some evidence of climate change cover-up. This is a brilliant tactic in that the prosecutors never have to prove the danger of climate change, merely that there was a cover-up. The same tactic discredited Nixon during Watergate.
Unable to pass a carbon tax, the group now coordinates on Big Oil ( and you our readers) via the courts. How else could it be that the Attorney General of the US Virgin Islands (now honestly did you know the Islands even had an Attorney General?) and New York State both subpoenaed the same company over the same issue? The conspiracy thickens. Kenny Bruno and Bill McKibben, founder of 350.org, led the fight to defeat the Keystone XL pipeline. They are urging state attorney generals to establish in the public’s mind that Exxon is “a corrupt institution that has pushed humanity toward climate chaos and grave harm” in an explicit statement issued by the group.
I suggest that West Texas residents familiarize themselves with the 350.org website. The avowed purpose on the site is to “revoke the social license of the fossil fuel industry and keep carbon in the ground.” In other words put the entire oil industry out of business. There is of course no way existing wind and solar (now at a distinct price disadvantage to conventional oil) can provide the energy necessary to power America but hey, phrases like renewable energy sounds great!
The Racketeer Influenced and Corrupt Organization Act RICO was created to stop money laundering and such by drug cartels and organized crime. Now Sharon Eubanks who led the tobacco litigation believes XOM can be pursued under RICO.
Readers take notice, your employment is in the cross hairs of the climate change lobby.
Contact Professor Elam at dennislelam@gmail.com
Professor Elam 
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