1. Ok so my brief economics thoughts on oil futures being fucking negative. One of the things that early 20th century theorists like Kropotkin and Émile Pouget emphasized is that capitalism relies on creating artificial scarcity in order to

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2. generate profits. This involves things like the destruction of pearls (as Kropotkin describes), intentionally letting food rot and keeping factories closed during depressions as people starve, and so on and so forth. Though this economic

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3. sabotage the ruling class fettered the forces of production that could provide for the well-being of all humanity for their own benefit. Timothy Morton, who wrote a really good book on oil and coal called Carbon Democracy reads this through

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4. through Veblen and his concept of strategic sabotage and documents how a lot of the oil games Russia and the UK were playing around Baku for example right before WWI were actually about acquiring rights to oil drilling not to actually drill

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5. any oil but to keep anyone else from doing it. Firms would also fund strikes in order to shut down their own refineries to reduce supply (or create the perception that supply was reduced) in order to keep the price high enough for them to stay

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6. in business. There's a compelling argument but Bichler & Nitzan, however, that the price of oil isn't based on supply and demand at all but on inter-sectoral strategic sabotage by oil companies, weapons manufacturers

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http://bnarchives.yorku.ca/420/2/20141100_bn_still_about_oil_wpcasp_web.htm#fn_19

7. and states, who have interests in high oil prices to maintain their power, against sectors who benefit from low oil prices. This requires however the kind of sabotage in productive terms that we've talked about earlier, everyone involved in oil

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8. production has to work in lock step (in terms of output, lobbying, messaging, ect) to keep prices high. If this fails and the various oil producers start fighting each other (over for example a massive economic shock like the coronavirus) then

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9. everything goes to shit. We saw the beginning of this with the price war between Saudi Arabia and Russia and their allies a moth ago and it looks like today traders and producers have lost discipline entirely and are just straight up panicking.

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10. It's unclear to me whether this signals a real shift in global power relations or if the oil producers will get their shit together and go back to extracting wealth but uh oil's like -$33 a barrel right now so they need to work fast.

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11. If there's still power in what Bichler and Nitzan call The Weapondollar-Petrodollar Coalition I think we're going to see a new oil war fairly soon but the coronavirus seems to have changed all the rules and is breaking down the old order

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12. Some other important things to note, the negative futures prices are for a type of oil that's basically only produced and distributed in the US and we're seeing a time lag between previous production and prices as contracts for delver come up.

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13. Producers a month ago seem to have not reacted to the Saudis and Russians fighting it out and kept up their production on top of the fact that there's been an unprecedented shock in demand reduction in the US (economists may be dogshit at

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14. determining actual demand but uh a significant portion of the population, particularly people who would normally do suburbs to city commutes, isn't driving right now so....................) and producers thought the economy would be reopened

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15. by May 1st, so what we're seeing is basically all futures being traded because if you have a contract for oil delivery in May you have to go pick up your oil today and people don't want to go pick up the oil because there's way too much of it

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