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Which Way Wednesday – The Oil Demand Scam


Not a very exciting market while we wait for Friday's Fed Speak but we have been amusing ourselves picking up some cheap positions – in case the free money train is going to keep on rolling.  The nice thing about sideline cash is you get to deploy it, which is so much more fun that being full of positions you're stuck with and praying they don't drop.  In addition to all those free trade ideas we gave you yesterday (and TOL is up over 10% since Monday's featured pick!), we added 3 more long trade ideas in yesterday's Live Member Chat Room, including IMAX, which spiked higher as we sent out our Top Trade Alert for that stock.  

Our shorting lines remain the same as yesterday and you have to be nimble with those S&P (/ES) (SPY) contracts but the trading range allows for many opportunities to pick up $250-$500 pretty much every day though yesterday we firmed up on shorting the Russell (/TF) at 1,250, with tight stops above that line.  On the Russell, it's $100 per point per contract – so a little more aggressive.


We're doing a Live Trading Webinar today at 1pm, EST and we'll do a little Futures Training.  Oil should be in play today with inventories out at 10:30 but we already saw an API Report that indicates an unexpected (by economorons) 4Mb build and that should be good for those USO puts we told you about last week.  Keep in mind the reason for the build is mainly the 500Kb/d Exxon (XOM) refinery is off-line and 7 x 500,000 = 3.5M barrels that weren't refined – duh!  

Of more concern to the oil bulls is the ever-declining demand for gasoline, as evidenced by the EIA revising their gasoline consumption expectations from +4-5% in January to +1.5% in their July estimate and even that may be revised down as US consumption, according to our friends at CNBC, had missed 10Mb/d estimates by 200,000 (2%) all summer.  

Of course, those guys are full of crap and totally misleading you because US consumption is actually 8.1Mb/d so either CNBC and their analysts are incompetent or they are lying to you to make you think demand is much higher than it really is.  My 14 year-old daughter was able to spot the lie using this chart from the EIA's weekly Petroleum Status Update – let's see if you can too:

That's right, we're EXPORTING 1,673,000 barrels of petroleum products (mostly gasoline) EVERY SINGLE DAY and our refineries are only making 9,770,000 barrels of gasoline a day so Americans are not even close to consuming 10Mb/d of gasoline.  Not only that but now we're EXPORTING oil too – over 600,000 barrels a day now that export restrictions have been lifted (thanks GOP!) and STILL they have a net build in oil – where's the demand?

In fact, actual US demand for petroleum products has been declining since 2006, when higher-mileage standards for autos began to kick in (thanks Obama) but the US energy cartel has more than made up for it by EXPORTING 5 TIME MORE PRODUCT than they did prior to 2006.

LOL, isn't it funny?  Our country is run by corporations who tell us to conserve but then charge us the same price for less fuel while also gouging other markets with the exports we made possible by conserving (spending more money on fuel-efficient cars too) - so much fun!  So, we have learned that every person you hear on TV or read writing about strong US demand or tight supply is LYING TO YOU because a child can see that the US has way, way more fuel than it actually needs – the US Oil Cartel is just selling our energy security to the highest bidder, that's all.  

That's right people in California, you pay $1 more per gallon of gas ($1,500/yr per car) because they tell you you're too far from refineries while they are shipping US-made gasoline to JAPAN and AFRICA and FRANCE and, for some reason, CANADA – how funny is that.  The joke's on you, of course but that's what you get for having 14 Republican Congressmen in your state – SHAME ON YOU!

Shame on all of us for allowing this farce to go on.  The US is one of the only countries on Earth that doesn't charge energy companies for the oil they take out of the people's ground.  That's right, a country that was founded of the people and for the people and by the people is being robbed by Corporations who are now considered people by the Supreme Court (thanks GOP!).  

You know, we make fun of the British because they are so willing to stand in lines and we make fun of Canadians because they are so polite but Americans are the only country in the world that simply bends over for any Capitalist that comes along to rape them and then says "


When did we get so pathetic that we allow ourselves to get screwed over like this?  When did we get to the point that we don't even care if both candidates running for President are proven liars?  If you don't expect your President to be honest with you, of course you don't expect newscasters to tell you the truth and certainly not CEOs and why should anyone act in anything other than their own self-interest in such an amoral world?  

Is this really how we want our children to grow up?  If you want to change things then YOU have to take a stand at some point.  YOU have to set an example and YOU have to demand more from the people you take all this crap from every day.  We are Americans, damn it, we should be getting MAD about these things, not shrugging our shoulders as if it's normal!

As noted brilliantly in 1976:

I don't have to tell you things are bad. Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's worth; banks are going bust; shopkeepers keep a gun under the counter; punks are running wild in the street, and there's nobody anywhere who seems to know what to do, and there's no end to it.

We know the air is unfit to breathe and our food is unfit to eat. And we sit watching our TVs while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that's the way it's supposed to be!

We all know things are bad — worse than bad -- they're crazy.

It's like everything everywhere is going crazy, so we don't go out any more. We sit in the house, and slowly the world we're living in is getting smaller, and all we say is, "Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials, and I won't say anything. Just leave us alone."

Well, I'm not going to leave you alone.

I want you to get mad!

I don't want you to protest. I don't want you to riot. I don't want you to write to your Congressman, because I wouldn't know what to tell you to write. I don't know what to do about the depression and the inflation and the Russians and the crime in the street.

All I know is that first, you've got to get mad.

You've gotta say, "I'm a human being, goddammit! My life has value!"

So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window, open it, and stick your head out and yell,

"I'm as mad as hell, and I'm not going to take this anymore!!"

That was 40 years ago – are things better or worse?  

Whose fault is that?  


Provided courtesy of Phil's Stock World.

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