Reading comprehension deficiency

On June 2 this year, OPEC+ announced it may begin to wind down its production cuts of 2.2 million barrels daily towards the end of the year. The announcement caused an oil price slump as traders rushed to sell, driven by the perception of weakening demand growth.

On August 1, OPEC+ repeated its plans for the immediate future, prompting another selloff. Since then, media have been spewing gloomy reports about oil prices because OPEC+ was going to start reversing its production cuts from October — as though it was a done deal. Yet it isn’t a done deal. It never was.

This did not prevent either media or the fancy new profession of commodity trading advisers to completely disregard this fact and treat the possibility of a reversal of the cuts as a certainty. Semantics, which journalists at least should be highly attuned to, has stopped mattering. And this is a problem — the same problem that we keep seeing in the transition camp.

What we have here, essentially, is a deficiency in reading comprehension that got massively amplified by algo traders because it’s all the rage and it’s so much faster and easier to trade using algorithms, and statistics never lie, and computer modelling is one 100% accurate representation of future reality.

Wouldn’t it be hilarious if none of the above was actually true? You know, like cheap wind and solar, and competitive green hydrogen, and all the rest of it — because the world’s oil inventories are falling and there aren’t a whole lot of different ways to interpret falling inventories of the world’s most used commodity.