Bullish Inflows Support Planned Intervention In Oil

Today’s action in the oil market represents a classic example of “beat the grass to startle the snakes.” I often use this phrase to describe the rearranging control of the trend into the right hands. As the guest commenter suggests in the video below, 60 millions barrels of oil will be consumed before midnight tonight. In other words, this invisible hand intervention is completely meaningless to the supply picture.

Watch the right hands continue to accumulation into weakness. That is, gain control over the trend in oil. Welcome to la la land of centralized intervention.

Crude Oil (WTI) and Crude Oil Diffusion Index (DI)


Also, watch for opportunistic buying in other key markets such precious metals, copper, and equities.

Headline: Surprise Oil Release by IEA Rattles Markets, Investors

The surprise release of 60 million barrels of oil from the strategic petroleum resverves of 28 nations sent shockwaves through global markets and left investors confused about why governments opted jump into the market now.

The International Energy Agency said the decision was aimed at offsetting market disruptions prompted by Libya's war and to stave off a possible spike in energy prices.

The Paris-based agency warned that the release was in response to an "imminent threat of shortfall," according to Executive Director Nobuo Tanaka, which could undermine the nascent global economic recovery.

"Today, for the third time in the history of the International Energy Agency, our member countries have decided to release stocks," he said.

Source: cnbc.com

Oil Stocks Tumble on Release