• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 2 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 2 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 3 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 4 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 6 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
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Dian L. Chu

Dian L. Chu

Dian L. Chu, is a market analyst at EconMatters.EconMatters  is made up of a team of financial and market analysts who research, analyze, and write…

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Reasons Why the Oil Market is the Same as the S&P 500

Reasons Why the Oil Market is the Same as the S&P 500

Portraits from the Dark Period

"The price has nothing to do with a shortage of oil. There's a lot of oil on the market. It's because of speculation and OPEC cannot control speculation."  Quote by OPEC Secretary General Badri.

Some people are audible learners, some learn based on touch, some by interaction, for the visual learners out there I provide the following work of art, which I call the “Risk-On Correlated Asset Motif” from the Dark Period by Jerauld de Speculator.

1 – Day S&P 500 & Brent Oil Comparison

1 – Day S&P 500 & Brent Oil Comparison

4 – Month S&P 500 & Brent Oil Comparison

 4 – Month S&P 500 & Brent Oil Comparison

6 – Month S&P 500 & Brent Oil Comparison

Related article: WTI-Brent Spread to Grow as Oil Inventories at Cushing Increase

6 – Month S&P 500 & Brent Oil Comparison

9 – Month S&P 500 & Brent Oil Comparison

9 – Month S&P 500 & Brent Oil Comparison

2 – Year S&P 500 & Brent Oil Comparison

2 – Year S&P 500 & Brent Oil Comparison

3 – Year S&P 500 & Brent Oil Comparison

Related article: Gold and the US Dollar

3 – Year S&P 500 & Brent Oil Comparison

5 – Year S&P 500 & Brent Oil Comparison

5 – Year S&P 500 & Brent Oil Comparison

Correlated Global Markets require one thing, a whole lot of Juice!

The first thing you have to realize about markets is that they are crooked. If you believe the price of oil has anything to do with the stuff that comes out of the ground, then I have some nice beachfront property in Louisiana for you.

It is all about the juice, whether it is 401k money coming in the beginning of each month, Central Bank injections, share buybacks, increasing leverage ratios, or currency funding the initial money has to be there in what I call the juice for markets, and I mean all markets.

This is why before and during almost any major up move in markets traders go to the EUR/USD and USD/JPY funding crosses for the juice to propel the move. It all starts with the juice, that is what determines price in markets.

This is why the S&P 500 has stalled for a couple days; traders are waiting for the next juice injection into markets. There would have to be some ‘crazy good’ news for firms to extend their leverage ratios at this point, so they wait for the next big fed injection, major currency move, or 401k money for their next major move up in markets.

Finally, those traders who think they are trading oil, you are actually trading the S&P 500, for all intents and purposes, it is the very same liquidity fueled market.

By. Dian Chu




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Leave a comment
  • Earl Richards on February 15 2013 said:
    Google the "$2.5 Trillion Oil Scam - slideshare" and google the "Global Oil Scam." The US is a victim of this scam. Plug your electric car into your household, solar power battery.

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