CELENTE: Oil Prices and What NOBODY is Talking About

Keep swallowing the Presstitute bullshit that prices are down because Israel didn't strike Iranian energy infrastructure

NOTE TO READERS: This article and dozens of others was published in this week’s issue of The Trends Journal. Subscribe here for the world’s top trend forecasting and news analysis. TRENDSJOURNAL.COM

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As we have long noted, there is absolutely no connection between Wall Street and Main Street.

They are two different worlds.

The equity markets keep going up as most of the global economy goes down.

Need more proof?

Just take a look at oil prices.

Feeling the pain of declining economic growth, tanking 6 percent on Monday, U.S. crude oil prices had their worst day in more than two years.

Why did oil prices sharply fall? The bullshit that the mainstream media sold for the selloff was that Israel did not bomb Iranian oil facilities when it launched its missile strike this past weekend.

Again, total crap mainstream media Presstitute bullshit. This past April, West Texas Intermediate was selling at nearly $87 per barrel. By September, it fell to $65.75 per barrel. Why did the prices fall? It had nothing to do with the Israel War. It had to do with declining world economic growth... especially in China.

According to a September report from the International Energy Agency:

·       Global oil demand growth continues to decelerate, with reported 1H24 gains of 800 kb/d y-o-y the lowest since 2020. The chief driver of this downturn is a rapidly slowing China, where consumption contracted y-o-y for a fourth straight month in July, by 280 kb/d. Average annual gains of 900 kb/d in 2024, compared to 2.1 mb/d last year, will take demand to almost 103 mb/d. An increase of 950 kb/d in 2025 will be equally subdued.

·      Much weaker than expected Chinese runs in July and a further deterioration in margins continue to weigh on the forecast. Cracking margins briefly turned negative in Europe and Singapore. US Gulf Coast cracking margins are more resilient, but they have nevertheless fallen by two-thirds versus year-ago levels.

·    Global observed oil stocks declined by 47.1 mb in July. The drawdown was concentrated in crude oil, NGLs and feedstocks (-75.5 mb), while oil products built to their highest level since January 2021. OECD industry stocks fell counter-seasonally by 12.3 mb in July to stand 78.5 mb below the five-year average. Preliminary data show continued stock declines in August.

·    Oil prices spiralled lower in August and early September, with ICE Brent futures plunging by about $10/bbl as floundering Chinese demand and economic headwinds heightened oversupply fears. Investor selling added to the bearish sentiment, with net speculative exchange holdings slumping to multi-year lows. At the time of writing, Brent was trading at around $70/bbl - the lowest level since late-2021 and down $20/bbl from April's 2024 high.

When the music stops

The rapid decline in global oil demand growth in recent months, led by China, has fueled a sharp sell-off in oil markets. Brent crude oil futures have plunged from a high of more than $82/bbl in early August to a near three-year low at just below $70/bbl on 11 September, despite hefty supply losses in Libya and continued crude oil inventory draws.

Global oil demand growth is slowing sharply from its post-pandemic rates, as already forecast in the OMR for some time. Reported monthly data covering 80 percent of global oil demand during the first half of 2024 confirm the steep decline in the rate of growth in oil consumption, which we have been projecting since our first forecast for 2024 was published in June 2023. Demand rose by 800 kb/d year-on-year over the first half of the year, dramatically lower than the growth of 2.3 mb/d recorded in 2023, but close to our initial forecast. For the year as a whole, global oil demand is on course to increase by 900 kb/d in 2024 and 950 kb/d next year.

The recent slowdown in China has seen its oil consumption declining y-o-y for a fourth consecutive month in July, by 280 kb/d. This stands in marked contrast to the 1 mb/d average pace of growth over the preceding 12 months, or the post-Covid surge of 1.5 mb/d in 2023. The country’s oil demand is now set to expand by only 180 kb/d in 2024, as the broad-based economic slowdown and an accelerating substitution away from oil in favor of alternative fuels weigh on consumption. Surging EV sales are reducing road fuel demand while the development of a vast national high-speed rail network is restricting growth in domestic air travel. The implications of the fundamental shift in the Chinese economic outlook and rapid changes to its vehicle fleet and transport modes are discussed in detail in our recent reports Oil 2024 and World Energy Outlook 2023.

There you have it.

Pure facts that are totally omitted by the mainstream business media.

As we have greatly detailed in The Trends Journal, with the exception of a few nations, such as the United States, much of the world is in economic decline and in a bad situation that will keep getting worse.

Again, never mentioned by the Presstitutes are the hard facts that the global economy, including the United States, was in decline prior to the COVID War, which made a very bad situation worse.

Just days before China launched the COVID War in January 2020, on its Lunar New Year, “The Year of the Rat,” the United Nations reported that the global economy’s 2.3 percent growth recorded was the lowest in a decade. That’s right, the worst growth level since the Great Recession.

They also said that the world’s largest economy, the United States, would see GDP growth of just 2.2 percent in 2019 – down from of 2.9 percent in 2018 – and only grow by 1.7 percent in 2020.

As for the U.S., does anyone remember the sharp December 2018 stock market selloff when 2018 was not a good year for the stock market when the Dow Jones Industrial Average and S&P 500 dove by 10 percent and the Nasdaq fell 8 percent?

Do people remember how then-President Donald Trump pushed the Federal Reserve to lower interest rates to artificially prop up the markets? The UN report noted that as a result of the U.S. interest rates, there would be some economic growth, but “continued policy uncertainty, weak business confidence and slowing job growth are likely to weigh on domestic demand.”

Indeed, despite the market pump, how many remember the September 2019 Repo crisis and its negative effects on equities and the economy? Trends Journal subscribers remember.

And of course, also long forgotten was the Trump 2017 corporate tax cuts, which according to the Tax Policy Center, enriched the one percent and big companies moved their overseas profits back to the U.S. and had a record year of stock buybacks which inflated the price of their stocks. 

TREND FORECAST: Therefore, by the facts, the equity markets and the global economy were in decline prior to the COVID War and the only reason they did not crash was because of the zero and negative interest rates and the countless trillions of dollars of fake money backed by noting and printed on nothing that the central banksters and governments pumped into the system to artificially prop it up.