“behavior of oil prices is quite curious”

This showed up as a comment in the “Loss of Confidence” commentary. The author (John) admits he was off topic. And he is off topic to the topic of that post. Rather than trash a good comment, there is enough of it to make a post out of John Hofer’s comment. Read on . . .

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John Hofer:

Off topic: but on March 4, I noted that “The behavior of oil prices is quite curious. Back in 2022, Brent crude reached almost $100 per barrel BEFORE Russia invaded Ukraine, despite the fact the EIA’s January Short Term Energy Outlook stated that “We forecast that global oil production will outpace global oil consumption during both 2022 and 2023, resulting in rising global oil inventories.

Today, AFTER closure of the Strait of Hormuz, Brent has risen to only $82, despite the fact the 20% of the world’s oil supply has been disrupted . . . ”

Last weekend, March 2, Matt Stoller noted:

“Since the start of the conflict, financial markets have not been reacting as much as would be expected to what looks like an important and disruptive change to the global economy . . . During the oil shock of the early 1970s, for instance, the stock market dropped by 50%. Yet so far, the S&P is down by just 7%. That’s not nothing, but it’s not much. There are a number of possible reasons for this dynamic . . . I would add an additional factor – the Trump administration has focused on manipulating markets as part of their war strategy. The most important scorecard for the White House is the value of stocks, so they cannot let them fall.”

IOW–market manipulation. Matt goes on to explain how it works.  “Manipulating the Stock Market Is Trump’s War Strategy“

And then there is this: “Volume in stock and oil futures surged minutes before Trump’s market-turning post . . . The timing of the earlier volume spikes across both equities and crude caught the attention of traders, particularly given the absence of an obvious catalyst at the moment they occurred.” 

CNBC did not let the words “market manipulation” or “insider trading” darken their report . . . how incurious can you CNBC be!?!