A Primer on the Price of Oil


There are five main elements to the plots of my books, political corruption, big oil, fusion energy, conspiracy, and high tech computer gadgetry.

My comments today have to do with the price of a barrel of oil.

First I want ask you to change your thinking just a little. Don’t think of oil as fossil fuels, gas, diesel, natural gas, etc. Think of it as ENERGY. Energy makes your cars go, heat your houses, etc. Oil companies are actually energy companies.

We hear, on a regular basis, about how the price of a barrel of oil is this or that, how it went to over $130.00 per barrel etc.

How did we arrive at that price or whatever the current price is?

In its purest, most basic model, it is simple supply and demand. I say purest, and most basic because that’s the only way it would seem fair, and logical. It is actually, much darker and very sinister.

The basic concept is this; ‘The more you have of something (low demand) the less it costs.’ Pinto beans are very plentiful (high supply, low demand) so they are cheap (cost). Gold is fairly scarce (low supply, high demand) so it’s pretty expensive (cost).

Oil today is traded in barrels. It is traded on various commodity exchanges around the world. Just like pinto beans, the more barrels of oil (energy) you have available on the market the cheaper it is. One way to affect the price is to not produce as many barrels of energy. Reduce availability. OPEC (Organization of Petroleum Exporting Countries) has done this several times in the past.

Another way to affect the price is to buy up all the available barrels of oil energy on the market. Again reducing availability. This is where it starts to get dark and sinister.

I did some research on the WEB to see if I could find out who buys the most oil on the futures markets. I wanted to know the person or company that buys the most oil. Not to be found. Not even countries were listed as biggest buyers of barrels of oil. Countries are listed as users of oil. That’s not the same as being listed as buyers of oil energy. The reason this is important is because you can buy a barrel of energy, hold on to it for a month or so, then, resell it for a profit. (Very dark and sinister.)

Interestingly enough, that little piece of data is not readily available. Why? Did I not look in the right places? Admittedly, I only looked for an hour or so. (That’s all my head could stand. Do your own research and you’ll see what I mean.) It may in fact be out there, I just don’t know where. Do your own research. Draw your own conclusions about their ulterior motives. It would actually be interesting to know who are the actual buyers and sellers of oil energy by name and country.

A little side note here. If you have more money than GOD you can just drop the price of oil. This would not be done without a specific objective in mind. Recently there has been a drop in the price of a barrel of oil. I have seen a news article suggesting that this is the result of middle eastern oil producing countries just dropping the price. This would not have been a random thing. It would have been done to interfere with the fracking that is going on around the world. Fracking has been very successful in increasing the production of oil in the countries that have had to otherwise buy the oil from the middle eastern countries to supplement their own needs. Now, there are stories in the news about layoffs in the oil fields.

So there are people/companies/countries that, buy and use energy, and there are people/companies/countries that buy and sell energy.

What I did find out is that, in order to play on this market, you need to have a hundred Million in capital (for sure), storage facility (Maybe), and a refinery, (Maybe.)

In the futures market, you are buying barrels of energy early betting that the price of that barrel of energy goes up before you have to take delivery. When the price does go up, you sell it before you actually take delivery. Thereby making a tidy profit without ever touching the first drop of oil. ‘Speculating’ is what it is called. This speculating and speculators are a huge factor in why oil (energy) is priced the way it is.

So, the question is, “Who has the where withal to play on the oil (energy) commodities market?”

Like I said before, for sure, you need a hundred million dollars. Who has that kind of money? Investment houses, banks, insurance companies, and etc. However, the most interesting groups are oil companies and other countries. That’s right, oil companies. They can produce all the oil they want, then buy it right back up on the market to raise the price, then sell it for a profit without having to refine the first drop. Or, they keep the oil, refine it and sell the gas, or diesel at the artificially inflated prices. I don’t think that the SEC would allow that here in the states, (I pray not. I don’t actually know that for a fact.) but if you’re an oil company in a foreign country without very tight laws, that is exactly what can be done.

Countries can and would do that. Believe it or not, we are in a financial cold war. Most of the world has already learned that direct hot wars are stupid, wasteful, and inefficient. Most of the world has learned, “Control their finances and you control them.” (The memo just hasn’t reached the terrorists yet.)

So why is Putin being so stupid with Crimea and Ukraine? Putin wouldn’t give Crimea or Ukraine the time of day if it wasn’t for their natural gas pipe line and fossil fuel resources. Again, “Without oil you can’t fund a good fireworks show, much less a policy of sustained aggression.”

Those resources are just another tool for Putin to use in the attack and control of the US or other small countries of the area. There isn’t a thing that the US can do about it either. (Maybe!) What do you think China is doing? They’re pretty rich. It has over a trillion dollars of our debt. It can take the interest from that debt and buy up oil futures and make the US even more subservient. Iran and Venezuela can do the same thing.

So how do you counter this?

Take away the money they get from those resources. Remove or severely decrease the value of ‘oil energy’.

What if oil energy was made irrelevant? What if the demand for oil was almost non-existent? What if we all had cars, and trucks, etc. that used a different source of energy, like electricity?

Wouldn’t that require a very large source of electricity? Yes.

Wouldn’t that require building a lot more, dirty fossil fuel and nuclear generating plants? No!

Clean Fusion energy, NOT DIRTY FISSION, could give us all the cheap, clean electrical energy we wanted. No hot house gases, no radioactive storage requirements, no nuclear melt downs.

Imagine what would happen if the President announced today, that the US was going to unilaterally embark on a project to commercialize fusion energy. Furthermore, we are going to fast track it and accomplish this within the next ten years.

What would happen if we had an energy policy based around fusion energy? Fusion creates so much energy, that the need for fossil energy would drop off the charts very quickly. Energy could be much cheaper.

My own suggestion would be to make the electrical energy generated by fusion FREE, just like the air that we breath. (The politicians would never let that happen.)

With abundant cheap energy, industry would grow, manufacturing production could go up, jobs would increase, terrorists and third world militia countries wouldn’t have away to fund their wars, and jihads. etc, etc, etc. (This assumes that the politicians didn’t corrupt it in some way.) And by the way, the environment would get cleaner too.

So why don’t we have fusion energy now?

In the beginning, there were a lot of very formidable technological hurdles to overcome.

However, there has always been the ‘Interference’ factor. Who loses if fusion energy becomes a fact of life? BIG OIL! Fusion is the only thing that threatens BIG OIL. Photovoltaic and wind farms are only small supplements that could never produce the predictable energy that oil energy can. They are no threat to BIG OIL. Predictable energy such as conventional nuclear, and fossil fuel production is the only way to grow a country and it’s industrial might. With all the money that BIG OIL has it is easy to imagine that they could be interfering with the advancement of fusion energy, this means US and international countries.



O.R. "Tex" Graves
Tex Graves earned a Bachelor’s Degree in electronic engineering from DeVry Institute of Technology Chicago Campus, graduating first in his class in 1974. Prior to that, he served as a Radio Intercept Operator for four years in the United States Air Force Security Service. His duties during his enlistment included monitoring the Chinese as well as the Communist Bloc countries of Europe. As a result of this extensive experience, Tex has always been a techie with a professed lifelong interest in thermonuclear physics, specifically as it applies to sustained nuclear hot fusion. Tex currently lives on a homestead he calls Buzzard’s Roost in the Texas Hill Country with his wife Annie, and cat Pumpkin, who answers more readily to the name Piss-Ant.

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