The politically motivated crash in oil prices is nearing its end and instead of bankrupting Russia, there is a good chance, that it will lead to the replacement of the US Dollar as international reserve currency. Meanwhile mainstream media and their very own pundits keep fooling the public: “It’s the Saudis wageing war on the US shale industry”, “it’s a structural waning of demand”, “it’s the growth prospects”… It’s the derivatives and a deliberately created oversupply, stupid !

This is intended to be a mini post, solely aimed at dispelling the myth, that a lack of crude oil demand (or the expectation of it) has led to the slump – which is by now more pronounced than it was in 1985.

Please have a look at SRSRoccos most recent post and tell me where the falling oil demand is – I am not able to see it. Steve has plotted IEA data into a graph, that shows rising demand – if anything. (In Q4 this could have been helped by already falling prices).

And just in case you think, its a rapidly deteriorating outlook on the world economy – this must be a special, somewhat unconvential take on the business expectations for 2015. Please google “economic growth 2015″ ´for last seven days and have a look, what the banks and institutions expect: an improving situation. (Oil demand is quite inelastic by the way).

Not that the expert’s models have to be right, but: The only thing that would justify a really, really bleak outlook, would be scenario à la 2009/09, when the oil price crash preceeded the steep downturn of the real economy.

So either media and their experts do not tell you what they think is the truth (an impending financial meltdown) – or it is a blatant effort in perception management and the experts speak out of both sides of their mouths…

By the way – from today’s POV I shall stand by my prediction of a supply shortage in the case of an oil price crash. Just give the industry time to shut down/mothball production, that is not up to the current low prices….