Oil makes the world go round. So when the Saudis cut their production because of weakness in China - or so we are told - and oil flies up, that's regarded as a sign of strength, not flatlining.
I need everyone to remember that you must never overestimate the power of the machines and the people behind them to be stupid and so stupid things.
Of course oil going higher is a because of cutbacks and a recognition that we may not, in this country, be able to flood the oil market as fast as the Saudis can cut back.
If the Saudis were flooding the world with oil to please Trump, they do not need to do more now because Trump has to be worried about his base and Texas and the decline in the health of that sector of the economy.
We know that Texas is a safe Republican area but, knowing as I do Trump, I think he wants a monster reelection win so he no longer has to deal with the idea that he lost the popular vote. If he can get it so that Texas has a big turnout, he will be well on his way to be a full-fledged majority winner.
Does all of this sound fanciful?
Yes, if you don't know the man. But absolutely not - it's totally real - if you do.
Remember, the Saudis are the ONLY country in the world with a spigot that can be turned on and off.
We can't.
We produce as much as we can, no matter what, no matter if the gasoline market is weak - it is and no matter if tanker rates are getting too high to store the stuff, no matter if Cushing is overflowing.
But the Saudis? On/off -- $45, $48 -- the world, within 10 bucks either way - is their oyster.
Today it's their oyster. And it's making the S&P go up. Not much more to it than that, is there?
