The Alleged Diesel Shortage Thing is a Scam

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by Chris Black

Every time oil goes up, gas prices go up, to the point that we are now paying $190 per barrel equivalent at the pump. 

There isn’t a supply problem.

At the current prices, refiners should be putting out product at a record rate. 

There is a massive demand problem and the big traders know it. 

They are attempting to paper over the demand destruction to keep the record profits off contract churn.

From 1980-2000 the crack spreads were incredibly stable, only shooting up during the gulf war. You were talking a range of around $3 to $6. Energy companies were some of the most profitable businesses with crack spreads under $5. 

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Everything went crazy after 2000 with an average spread over the last 20 years of $18, representing a massive windfall. 

It wasn’t the oil companies that did it though. 

It was Goldman Sachs and other Wall Street funds who were suddenly able to gamble in commodity futures like a table in Macau. 

All thanks to Bill Clinton with the Commodity Futures Modernization Act, then George Bush with the repeal of Glass Steagal.

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