The problem with the strategy is, nobody burns crude oil. Crack spreads are off the charts. If you treated crack spreads as normal, crude would already be at $150. Bessent can’t create refining capacity, and it is off-line in the Middle East and Russia, and reserves are draining. Prices are continuing to go up. Shortages are imminent. Diesel over $5 will tip rural voters away from the GOP and we are already there.
The strongest case isn’t necessarily that Treasury is secretly shorting crude futures—that remains unproven.
What is observable is repeated oil-market jawboning + large strategic-reserve releases while inventories, backwardation and refining margins continue to signal physical tightness.
Governments can use rhetoric and inventories to soften the price signal for a while.
The real thesis test is what happens when those buffers shrink before physical supply normalizes.
If that happens, price may have to do the balancing very quickly.
This was phenomenal. First time coming across your work but it deeply resonates. The fact that you also appreciate the work of Chris and Dario says a lot. Appreciate this!
Very interesting analysis. Keep in mind that this Iran conflict started months ago, and other countries started ramping up production also. How does this affect the stock price of producers and the price of oil spread? The Exxon (T-XOM) spread to Oil Prices seems to be below two standard deviations with a very low probability of not reverting to the mean (ADF p=0.033). For Oil Prices we use USO, a proxy for West Texas Intermediate. I have not tried yet an Engle Granger regression model, but this one below seems quote good already. I do not think it is Exxon that is cheap, it is more that oil is expensive. If oil prices go down, then the Exxon to Oil spread curve below will rise again. So I would be more inclined to short Oil than go long Exxon at the present moment. Ideal for those who already own Exxon or similar? Disclaimer: not for investment advice purposes, our core mission is purely enabling analytics tools and methods for widespread use.
When the legacy desks take 43 days to do the math.
On June 28, The Trigg Ledger published a structural breakdown detailing how draining the U.S. Strategic Petroleum Reserve down to a 331-million-barrel floor handed Beijing total leverage—creating a 900-million-barrel mathematical shift that effectively ceded control of global energy price discovery.
On August 10, The Times of India and global desks finally caught up to the reality:
"China’s massive strategic oil reserves help it act as a global swing buyer. During price dips, China aggressively stockpiles excess supply... During price rallies, it can draw down reserves to suppress import demand, directly muting global price spikes..."
While mainstream media reacts to the news cycle, independent intelligence maps the physical supply chains and sovereign chess moves weeks before they hit the wire.
Once again, Sam writes a fantastic detailed piece that helps me put together the various bits of information I have collected but don't have the financial knowledge to assemble into a clear picture with a well defined plan. Thank you.
Crack spreads are high, which pushes crude down, because the consumer pays the finished price.
Now, as to manipulation: the prices of money (interest), gold, oil and uranium are profoundly important to nation-states, and they attempt to control these prices. Nothing new here.
The problem with the strategy is, nobody burns crude oil. Crack spreads are off the charts. If you treated crack spreads as normal, crude would already be at $150. Bessent can’t create refining capacity, and it is off-line in the Middle East and Russia, and reserves are draining. Prices are continuing to go up. Shortages are imminent. Diesel over $5 will tip rural voters away from the GOP and we are already there.
They’ve had decades practice manipulating the gold price, using all three techniques. Those early AM slams are legendary to long time PM holders.
Thought-provoking piece.
The strongest case isn’t necessarily that Treasury is secretly shorting crude futures—that remains unproven.
What is observable is repeated oil-market jawboning + large strategic-reserve releases while inventories, backwardation and refining margins continue to signal physical tightness.
Governments can use rhetoric and inventories to soften the price signal for a while.
The real thesis test is what happens when those buffers shrink before physical supply normalizes.
If that happens, price may have to do the balancing very quickly.
Excellent information. I really appreciate your effort and I am glad for the education
This was phenomenal. First time coming across your work but it deeply resonates. The fact that you also appreciate the work of Chris and Dario says a lot. Appreciate this!
4. Layering
5. Spoofing
You think these guys play by the rules?
Very interesting analysis. Keep in mind that this Iran conflict started months ago, and other countries started ramping up production also. How does this affect the stock price of producers and the price of oil spread? The Exxon (T-XOM) spread to Oil Prices seems to be below two standard deviations with a very low probability of not reverting to the mean (ADF p=0.033). For Oil Prices we use USO, a proxy for West Texas Intermediate. I have not tried yet an Engle Granger regression model, but this one below seems quote good already. I do not think it is Exxon that is cheap, it is more that oil is expensive. If oil prices go down, then the Exxon to Oil spread curve below will rise again. So I would be more inclined to short Oil than go long Exxon at the present moment. Ideal for those who already own Exxon or similar? Disclaimer: not for investment advice purposes, our core mission is purely enabling analytics tools and methods for widespread use.
When the legacy desks take 43 days to do the math.
On June 28, The Trigg Ledger published a structural breakdown detailing how draining the U.S. Strategic Petroleum Reserve down to a 331-million-barrel floor handed Beijing total leverage—creating a 900-million-barrel mathematical shift that effectively ceded control of global energy price discovery.
On August 10, The Times of India and global desks finally caught up to the reality:
"China’s massive strategic oil reserves help it act as a global swing buyer. During price dips, China aggressively stockpiles excess supply... During price rallies, it can draw down reserves to suppress import demand, directly muting global price spikes..."
While mainstream media reacts to the news cycle, independent intelligence maps the physical supply chains and sovereign chess moves weeks before they hit the wire.
Read the original June 28 dispatch here: https://triggledger.substack.com/p/shorting-america-how-trump-sold-our?utm_source=share&utm_medium=android&r=8gc1qf
Once again, Sam writes a fantastic detailed piece that helps me put together the various bits of information I have collected but don't have the financial knowledge to assemble into a clear picture with a well defined plan. Thank you.
Do a little research. The United States actually produces more refined fuel than it consumes, making it a net exporter of finished petroleum products.
Crack spreads are high, which pushes crude down, because the consumer pays the finished price.
Now, as to manipulation: the prices of money (interest), gold, oil and uranium are profoundly important to nation-states, and they attempt to control these prices. Nothing new here.