How a Single Imaginary Line Is Pushing Oil Prices Up

Oil prices have swung harder this month than in years.

On Wednesday, you saw how – and why – some financial institutions manipulated the market to start these swings.

But to give you insight into why the markets played along with these manipulators, I asked Sean Levine to give you his view of what's happening with oil – and where crude prices are going next.

As director of research and product development at the Energy Capital Research Group, where I'm executive chairman, Sean has an unmatched view of what oil markets are up to.

And as you're about to see, there's nothing real about what's been happening to oil this month.

Look How the Big Banks Are Manipulating Oil Prices Now

There are a lot of rumors flying around the oil industry right now, and the financial news channels have no idea how to handle it.

One day, they'll be talking about OPEC abandoning its oil deal and letting oil prices fall.

The next, they'll be all over a drop in oil in storage in the United States, driving prices up. You'd be forgiven for not knowing what on Earth is going on…

And thinking you should just stay out of the energy market altogether.

But nothing could be further from the truth. In fact, today is a great time to get in. You see, there's a reason why oil prices nose-dived so fast two weeks ago…

And why they're recovering at record speed.

The Real Reason for Last Week's "Oil Flash" - and Why Crude Prices Are Moving Back Up

Late last week, crude oil prices took a nosedive. WTI (West Texas Intermediate, the benchmark crude rate for futures contracts in New York) declined 4.8% on Thursday, fueled by massive overnight (and overseas) sell-offs. That translated into a 7.7% dive for the week to date.

If there has ever been a better example of the tail wagging the dog, I haven't seen it.

As you've seen me say before, swings in oil prices often have less to do with market dynamics and more to do with paper traders – people trading futures, options, and other hedges. Of course, what does happen in the actual market may be the initial prompt for how such derivatives are played.

This time, however, we had an avalanche of events that magnified the impact.

Your Best Play on Oil's Move to Asia

Earlier this week, Kent recommended a basket of three great stocks to play the "American Energy Revolution" as we move toward functional, meaningful energy independence over the next decade. These picks were all about the domestic energy "balance" of fossil and renewable fuels the U.S. must maintain and develop to meet that goal.

But energy is a truly global market, constantly changing, and absolutely packed with the kinds of opportunities Kent's spent his entire career in intelligence and academia researching and cultivating.

Picks like the one you're about to get…

Now, Kent normally shares these recommendations only with his paid-up Energy Advantage readers – it's only fair. But the market changes underway – call it the "rocket fuel" under these shares – are so profound (and the profit potential so juicy) that he asked us to share this with all our Members. His subscribers have already picked up double-digit profits here, and he thinks it's likely those gains are just the beginning.

What Really Happens in an Intelligence "Scif"

The U.S. is just beginning an investigative process that may be more significant than any series of events since Watergate or Iran-Contra.

Events unfolding may have a major impact on the policy making apparatus and the balance of power inside the Beltway, as well as have profound global implications.

In all of this, almost without question, we will see effects on market pricing, cross-border transit, and international flash points. All three will have pervasive results for the energy sector.

But we are at a very early stage in all of this. So today I thought it useful to broaden our usual discussion and share, from personal experience, what actually happens when one employs a facility that is being bandied about these days.

I'm talking about the term "scif" (pronounced "skiff"). It's been prominent in the news because of actions by the chairman of the House Intelligence Committee (reviewing documents on the White House grounds) and public interest in how the relevant congressional committees (the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence) review and oversee secure files.

What I'm hearing about scifs today has me concerned…

An Old Rival Is a Dangerous New Player in the South China Sea Energy Crisis

For years, I have worked with the U.S. Department of State, providing advice to developing countries on oil and natural gas issues. Our work together goes back some 46 years.

It began during the Vietnam War, when I was recruited into a division of the State Department's Bureau of Intelligence and Research (INR), initially involving insertion into the Southeast Asian theater of operations as a field counterintelligence officer.

A great deal of the work I did, and the losses I and others suffered, remain classified to this very day, but suffice it to say that deployment earned me the first of my three Presidential Intelligence Awards – and launched more than two decades of active service in the intelligence community.

However, much of my more recent work has involved matters related to the geopolitics of energy, certainly one of the most complicated and potentially explosive issues our world faces today.

As a result, I have traveled to a number of countries over the years to work with officials on establishing energy policies and practices.

This is the New Player Meddling in the South China Sea Crisis

For years, I have worked with the U.S. Department of State, providing advice to developing countries on oil and natural gas issues. Our work together goes back some 46 years.

It began during the Vietnam War, when I was recruited into a division of State's Bureau of Intelligence and Research (INR), initially involving insertion into the Southeast Asian theater of operations as a field counterintelligence officer.

A great deal of the work I did, and the losses I and others suffered, remain classified to this very day, but suffice it to say that deployment earned me the first of my three Presidential Intelligence Awards – and launched more than two decades of active service in the intelligence community.

However, much of my more recent work has involved matters related to the geopolitics of energy, certainly one of the most complicated and potentially explosive issues our world faces today.

As a result, I have traveled to a number of countries over the years to work with officials on establishing energy policies and practices.

This "Nanocatalyst" Breakthrough Will Change the Way We Drive Cars Forever

Occasionally, something crosses my desk that brings me back to my very early years, the ones in which theoretical physics was just about the only thing I thought about (aside from playing baseball).

I had a professor then that would comment on how important pure science was, even though more research money flowed into applied matters.

He used to say: "Pure science can teach us about the origins of the universe. But unless you can turn that into developing a quicker-drying paint, there is unlikely to be much market interest in it."

However, over my years in the energy sector, I've seen that the two worlds sometimes come very close together.

And they're about to do just that again. Because researchers have come up with a revolutionary – and cheap – new way to fuel cars.

What This Oil Price Roller Coaster Actually Tells Us

  Crude oil prices this morning are up slightly and effectively flat following the fast decline earlier this week. Despite the clamor being raised by "analysts" portending a bloodbath in oil prices during the  sharp decline late last week, neither the underlying market dynamics nor the oil trading contracts themselves were pointing in that direction. […]

What I Revealed in My Windsor Briefings, Part I

Last weekend's annual meeting at Windsor Castle again brought together some of the world's leading energy authorities, policy makers, ambassadors, and officials. The Windsor consultation remains the most unique energy meeting in the world, featuring some high-level exchanges among a small number of heavy weights.

The last issue of OEI discussed the geopolitical dimensions of our Windsor sessions. My two briefings this year had the responsibility of taking point on both production and financing expectations for 2017.

And here's what I told the assembled dignitaries about the real story unfolding between oil supply and demand…