Energy and precious metals market assessment and prospects for the coming week

Trying to speculate before the realities unfold: That's why price moves are so overwhelming in any market, especially commodities. 

What if the current 25% of oil prices were generated by speculation by the biggest Wall Street traders but not strictly regulated? What if a barrel drops from $ 110 to $ 80?

As commodity investors swayed by fears of a US recession that caused a barrel drop of more than $ 10 for the week just ended, an investigative report by TYT Network appeared on for Some members of Congressional Democrats have also turned their attention to a complex loophole that could help prop up food and gas prices.

The vulnerability, known as Note 563 according to Commodity Futures Trading Commission trading instructions, or CFTC.
According to CFTC subject experts interviewed by TYT, the 563 Note essentially allows Wall Street's biggest financial firms to overpower the healthy price setting with large volumes of swaps based on on commodity - basically a bet on the price of the commodity.

In healthy markets, buyers and sellers set prices by finding an intermediary between them. One side wants low prices, the other wants high prices. The problem is that buyers and sellers of oil and other commodities are overwhelmed by Wall Street merchants, at a rate of more than 10 to one,. Neither of them has an incentive to buyers to actually keep the price low, because very few of them actually buy it; they mainly bet on it.

Certainly, sanctions not only on Russia but also Iran and Venezuela, as well as civil conflicts in Libya, are all tightening world crude supplies while demand returns to pre-pandemic highs. . The problem is that banks and Wall Street merchants are spike in prices from this tight oil situation, where an active futures market will support them.

The problem is not corporate greed, as President Joe Biden and Democrats have said. Or, at least, it's not the greed of the company they have in mind.

In healthy markets, profit margins will inspire reduced competition, especially when gasoline is at record highs above $ 5 a gallon. In theory, an opportunistic petroleum wholesaler could try to attract new customers by lowering their selling prices. 

But even if some wholesalers did, it wouldn't change the market price, because gasoline sales were plummeting against Wall Street expectations.
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