Many people still have a complacent attitude to the reduction of global oil supplies by 20% or more resulting from the closure of the Strait of Hormuz, the destruction by the Houthis of the Saudi east – west pipeline and not helped by Ukraine’s attacks on Russian oil infrastructure. This is due to many of them believing government lies to the effect that much more oil is flowing through the Strait than is actually the case, coupled with the impact of the closure being greatly cushioned up to now by the drawdown of strategic oil reserves all around the world, but these reserves are now virtually exhausted. What this means is that if we soon see a major attack on Iran that provokes it into retaliating by destroying the rest of the production capacity of pretty much the entire Mid-East, global oil production will be reduced further from its current 20% drop to a near 32% drop, as the Mid-East supplies almost a third of the world’s oil – and this will hit at a time when global inventories have been drawn down to the point of exhaustion. The results of this will be apocalypic.
There are only two plausible explanations for the apparent insanity that we are currently witnessing. One is that the politicians and world leaders responsible are incompetent raving lunatics and the other is that they have an agenda and are operating according to some Grand Plan.
Henry Makow is of the view that both these major conflicts, the campaign against Iran and the festering endless Russia – Ukraine war, are being orchestrated for the ultimate purpose of eventual massive population reduction with Freemasons embedded on both sides working to bring them about. This would explain why Russia, instead of dealing a decisive blow to the neo-Nazi regime in Kiev, has allowed a war of attrition to drag on for about 4 years now that has culled a large number of clueless Slavs on both sides, thus clearing out the local population of a resource rich region so that the favored people can move in when the time is right.
We do not have to answer the question regarding whether these conflicts are the result of usual human stupidity or whether they are due to some nefarious plot, because if hostilities against Iran are ramped up as looks likely the result will be the same regardless of the underlying reasons – the elimination of a third of the world’s oil supplies which will obviously collapse the global economy as the oil price rises to $200 - $300 a barrel or even more.
The immense power and wealth of transnational global elites has led to them believing that they are Gods. They do not see themselves as the beneficent custodians of the human race. Instead they view the majority of the population of the world as an infestation and a nuisance that is cluttering up the planet and consuming their resources and if you have ever visited ant-heap mega-cities like Chennai, Dhaka, Sao Paolo in Brazil or even Venice in the Summer, you can see their point. As globalist Yuval Harari famously said a few years back “What do we need so many humans for?” Accordingly, they want to get rid of them, especially now that they don’t need most of them any more as they can soon be replaced by AI and robots, so they are implementing measures to eliminate most of them. The Covid shots “only” wiped out 20 million or so although the resulting infertility, miscarriages and turbo-cancer continue to exact a toll. That’s “small potatoes” measured against a global population of 8 billion. If you look at a long-term chart showing how global population has grown in lockstep with the availability of cheap energy, you quickly understand that the most effective way to cull the population is to drastically reduce the supply of cheap energy, especially as it is also used to manufacture fertiliser – are you starting to put 2 and 2 together yet??
Since the main purpose of this article is to explain why oil looks set to go much higher, we will stop there, having figured out the possible motive of the elites for drastically reducing the global supply of oil which must drive the price much higher, and will now turn our attention to the charts.
Starting with the 1-year chart for Brent Crude we see that it is truly remarkable, given the ongoing effective closure of the Strait of Hormuz for much of the year now, that its price has still not “officially” broken out above its highs back last March – May up near to $115. However, this anomaly appears to be due to financial chicanery, for out there in the real world if you try to buy a barrel of oil the price is considerably higher which is why the United States Oil Fund and the United States Brent Oil Fund have already broken out to new highs, as we will see when we look at them below. So although the uptrend from early July could turn out to be a bearish Rising Wedge, if Israel and the US back off from attacking Iran further and wind down hostilities, with the price forming a Double Top with the March – May highs, the aforementioned breakout to new highs by both BNO and USO and the big military buildup point instead to a breakout to new highs and a probable dramatic increase in the price before much longer.
The 1-year chart for Light Crude is similar to that for Brent Crude , although it looks more positive as the uptrend from the early July low is about parallel. An attack on Iran is likely to trigger a swift breakout above the key resistance at the Spring highs leading to accelerating gains.
Now we will take a quick look at the charts of a couple of oil proxies. Starting with the United States Oil Fund we see that the current parallel uptrend that started from the early July lows has already driven the price to new highs. This chart looks entirely bullish and a reason for showing it is that it also shows volume and the Accumulation line. The volume pattern is powerfully bullish with heavy volume on the Spring advance following the attack on Iran and very light volume as price reacted back late in May and in June, which is why the Accumulation line held up so well. This enabled us to deduce that it would advance anew, and it did.
It’s a very similar story with the United States Brent Oil Fund, included to give you a little more of a range of oil securities to invest in. It too presents a very bullish picture with the price having broken out to new highs and established itself at higher levels, suggesting continued robust advance by oil and oil related securities. The reason that both of these oil funds have established new highs and yet oil itself hasn’t is believed to be the use of financial engineering to suppress the oil price, especially ahead of the mid-terms, but the funds’ charts suggest that they won’t succeed in keeping the oil rice constrained for much longer.
Note that I have made these oil charts black which I have always wanted to do, because oil is black, as we know. The reason that they were not made black in the past is that some readers / subscribers wanted to print them out, which obviously used a huge amount of ink, but almost no-one prints things out these days.
The conclusion is that oil, oil funds and oil stocks all look like strong buys here in expectation of continued outperformance by the sector relative to pretty much everything else.
End of article.
Posted at 12.40 pm EDT on 18th October 26.