Dubai 2.0.
The oil market makes me laugh. A friend of mine who runs one of the largest commodity desks in the world is always telling me there is so much oil and gas, they have to bribe the inventory bean counters to keep the reserves numbers down. You see the producers love high prices. Oil has inelastic demand and while we complain (especially those of us who have to pay in USD), the producers get richer.

Now I know little about the way oil is priced but I do know that Libya produces sweet oil and sells it to Europe and it has little immediate impact on our lives. There are different grades of oil and there are different extraction and distribution costs. I know that calculating oil reserves is near impossible and I know oil speculators are the drivers of price, not the true demand/supply. The market is opaque, misunderstood and all the things a speculator loves.

Take a look at this fintag graphic. What does it tell you? I have absolutely no idea except we shall all be driving electric cars powered by electrons made from nuclear fusion and the burning of carbon long after we have all died.

Today’s shorts:
Goldman says oil is running out (reuters)

Brent crude bounces around like an oily ball (reuters)

Today’s longs:
Charts look pretty in yellow (wtrg)

Oil to hit USD220 (nomura) (telegraph)

Gossip:
Goldman/Nomura is shorting oil like crazy.