The oil market considered the world's most important market, is currently crashing. George Gammon explains why this is happening and what it could mean for the future of the economy.
Gammon cites a number of factors that are contributing to the oil market crash. Firstly, OPEC+ recently announced that they were going to cut production by over 1 million barrels a day. This has caused supply to become restricted.
Secondly, there are geopolitical tensions with Russia and Ukraine which is further reducing supply.
Finally, ESG (Environmental, Social, and Governance) has resulted in very little investment in energy, specifically oil.
Gammon then introduces the concept of backwardation, which is when the futures market predicts that the future price of oil will be lower than the current spot price.
This is unusual because it means that the demand for oil is high right now, but the market predicts that the demand will be much lower.
Gammon suggests that backwardation is telling us that the demand for oil in the future is going to be significantly lower than it is now.
Despite all of these factors that should be pushing the price of oil higher, the price of oil is actually collapsing.
This is because the market is predicting that the demand for energy will crash so low that it will exceed our limited supply, causing prices to collapse.
Gammon argues that the most important market on Earth is predicting a recession, if not an economic depression.
Looking at the current price of oil and the futures market, it is clear that the market is predicting that things are going to get a lot worse before they get better.
The market is in backwardation, and even with the price of oil plummeting lately and the low supply, it seems that things are going to get worse.
In conclusion, the oil market crash is a clear indication that the economy is heading toward a recession or possibly an economic depression. While many factors contribute to this, the fact that demand for oil is expected to be so low in the future is the most concerning.
The market is predicting that things are going to get worse before they get better, and it is crucial that we pay attention to these signals and take action accordingly.
I have an investment proposition that I would like to share with George but can’t figure out how to get to talk with him. Any suggestions? There is one thing that can save this planet and it is worth trillions. A food source that can feed 80 billion people or more. Ten times our current population. It can be a place where people, billions of people, can flee tyranny, famine, or nuclear war. The rough layout is on my website but I have gone as far as I can without professional guidance. There is a small booklet on the https://marinea.org/… Read more »
Okay so sentiment has shifted to Recession On – therefore demand and price are anticipated to be Down. Can you make an educated guess to where? Was the recent dip down to $63 and change the low for this cycle?
I suppose that depends on whether there is an economic Recession – or Depression….