Report: Huge Short Interest in Energy Markets (LENR Related?)

Yesterday we posted here a link to a document published by the BlackRock Investment Institute in which they stated that they were watching carefully developments in LENR technology as they try to evaluate the future of the energy markets.

For a long time we have discussed here what might happen in the energy markets if people start taking LENR seriously. Now we know that BlackRock is doing so it makes me think that there is more of a chance that perhaps some of the movements in the energy markets could be related to expectations of LENR hitting the markets sometime soon.

Today Sifferkol linked to the Bespoke Investment Group who published an article titled “Energy Sector Short Interest Going Parabolic”.
An excerpt:

“As of the end of January, the average stock in the Energy sector had 9.88% of its floating shares sold short. As the chart below illustrates, this is the highest level of short interest for the sector since at least 2008.”

Also Today Liberty Newspost posted a link to this article from Business Insider titled “Wall Street is betting against energy companies like crazy”. This article quotes the Bespoke IG article above and also notes,

‘In an afternoon email on Wednesday, NYSE floor governor Rich Barry wrote, “By the way, according to our contacts on the Street, there is an inordinate amount of ‘Street Buzz’ going around that there is so much short selling in energy stocks being done by hedge funds that some stocks are becoming hard to borrow (!). It is a hugely crowded trade at the moment.”‘

Is this activity connected with LENR? I don’t know how it’s possible to get a definitive answer to that question, one way or another, but there certainly seems to be significant sentiment that energy markets are heading lower, even thought there was quite a rally in the oil markets recently (although it has dropped this week).

This all makes me wonder what would happen in the financial markets if it was demonstrated that a commercial LENR plant was operating successfully. From everything that Andrea Rossi has said, it will be at least a year before that happens. Meanwhile, there will likely be people who have confidence in LENR as a new and superior energy source placing bets, and perhaps we are seeing some of this betting playing out in the markets already.

  • Nicholas Chandler-Yates

    It couldn’t have anything to do with the fact that coal and Natural Gas prices are in a downward spiral, and that most energy produced in the USA is made via coal and Natural Gas. Add to that the fact that renewables such as solar are becoming profitable per Kw, and that large scale cheap grid scale batteries are likely to become a thing before solar gets big enough that it becomes a limiting factor.
    Thats far too predictable. *sarcasm*
    LENR isn’t mainstream enough to be affecting energy markets. I doubt even companies that are following LENR are betting on it yet, why would they? the forecasted time for real energy production is still foggy at best.
    No offence but this is a case of seeing what you want to see. The larger forces (fossil fuel prices, and renewables becoming cheaper) are writing on the wall to financial investors that the old energy plant companies are on the way down.
    Occams Razor, no need to invoke even the slightest shred of LENR influence to explain this.
    When LENR makes waves in larger media outlets, come back to me.

    • GreenWin

      Unhappily the “larger media outlets” are equivalent to POTS wired phone service — losing subscribers at record pace. Workforce sitting home watching NBC’s Brian Williams evening newscast are incapable of affecting the financial markets. And NBC just announced Brian has been “suspended without pay” due to a fabricated war story.

      Larger media outlets are going to go the way of the DoDo bird if they don’t get wise and start reporting accurate news. Meanwhile Blackrock is closely tracking LENR announcements around the world and… er, somehow, institutional investors (Blackrock) are piling on to short fossil/fission energy.

    • SG

      I wouldn’t be too sure about that. Futures traders are some of the most well-informed people on the planet. Knowledge of working LENR+ has the capacity to move futures markets. Those with vast amounts of money on the line or under management are very likely in the know.

      • I’ afraid that LENR, not as a technology (not required to work), but as an awareness is not short term enough to change the market.

        aware people will wait for the moment when they know that the usual trader will learn that LENR is real in few month, and only tat that moment they will buy a low future for oil.

  • Axil Axil

    Short sellers borrow stock and sell it, essentially betting that the price of their target company will fall before they have to replace the borrowed shares. They have been disparaged as vultures, rumor mongers, cheats and criminals.

    The short sellers want to pressure companies out of business so like vultures they can feast up to there beaks in carrion of a dead carcass. The goal…to take the stock price down to zero, Its all about making money my stout fellows…just business,

  • Gerrit

    At the same time Blackrock is increasing its investment in offshore drilling rigs owner Transocean.

    • Axil Axil

      Buy low, sell high.

      • Gerrit

        which means that Blackrock assumes oil prices will recover over time.

        • Agaricus

          Just as soon as most of the competition has gone bust.

  • Nigel Appleton

    The current bombing of the oil price is as much political as anything, with the US and Saudi Arabia trying to screw Russia and its Middle East allies.

    It’ll be some years before we see LENR power stations, cars, ships (although I suspect LENR-heated homes are closer); and oil is an essential petrochemical feedstock.

    I’ll be going long on fossil energy if the oil price tanks much more. Mind you, if there’s an opportunity for investment in LENR, I’ll be into that like a ferret down a rabbit-hole

    • mcloki

      I agree. There will be money to be made for people like us who invest in LENR firms now. I hope this site keeps a list of stocks to keep an eye on in the LENR field.

  • It seems to me that a lot of people don’t realize that it doesn’t matter if it takes 1 year, 3 years or even 10 years to commercialize LENR for the markets to react wildly. Oil and energy are historically all priced on the idea of future scarcity. I mean, it only costs the Saudis a couple of $ per bl to extract oil för another 20 years or so at current pace. When scarcity is replaced with the idea of energy abundance it means everything for the market right now. This is what is maybe starting to happen. We are nowhere near though. As Ian has explained in numerous excellent posts; if the market rules, oil will eventually level at $10. Because it’s the best business for the Saudis (who has more or less all the easy access oil reserves).

    • Agaricus

      Your point that oil price is in part determined by trade in ‘futures’ is taken, but surely this would not extend to possible events a decade or more into the future? It must also be clear to the traders that liquid fuels will not be affected by availability of cold fusion generated heat and electrical power for at least 20 years and possibly longer, not to mention that other uses for oil such as feedstock for plastics and chemicals will probably grow continuously if prices remain modest (<$50/brl). Personally I remain unconvinced that LENR is a primary cause of oil price falls, which seems more likely to be primarily due to geopolitical gaming on the part of various world powers.

      Whatever the cause, a sustained price of $10 a barrel from Saudi would put most other providers out of business, and in many cases their assets would mostly become unusable after a year or so of disuse (i.e., couldn't be re-started) and would have to be dismantled or abandoned. If the Saudis keep pumping at absurdly low prices, this would amount to a war on other producers, some of whom might be tempted to take direct action to prevent them continuing to do so.

      In other words, this apparent over-reaction in the market is potentially quite dangerous, and could lead to a real scarcity of oil supplies many years before LENR comes on stream as a commercial energy source. Conversely (and perversely) if oil prices do remain very low without any interruptions in the supply, this could affect the introduction of alternative energy sources, including LENR itself, which might find it very hard to compete with the very low cost of energy from oil (and gas?).

      • There will be geopolitical problems. No doubt. And all other producers will be put out of business. No doubt. The timeline is undecided though.

        So far, I agree that LENR is not the prime mover of the oil market; the enormous over-supply is, as Goldman Sachs wrote again yesterday ( Allthough I do believe that to some extent LENR is part of it as a catalyst for the idea of future energy scarcity to give in. And for sure future traders (algos?) are reacting to these news. It’s their job to do so.

        I don’t agree that the Saudi prices are absurd at all. If you could pump at $1 and sell at $10. And at the same time kill of the competition.That’s good business… Only reasons for higher prices are the idea of scarcity even beyond 10-20 years. Because without that idea; if the Saudis doesn’t pump now, by that time all remaining oil will be completely worthless. And for a while $30 will be low enough to achieve this market share growth.

        • probably most people, except happy few who wait for the sheep panic signal, don’t know about LENR.
          even those who are aware know that to make money they have to wait for the sheep to be aware. they just have to sell the day before the sheep react, not before.

          however the good point is that shale revolution, like renewable myths, have prepared the minds for the revolution.
          the oil companies, the states, the funds, have war plans ready for low cost energy… just option, but when LENR will look serious, they will just have to adapt.

      • bachcole

        But the Saudis can pump just so much oil. People who need oil will simply go elsewhere and buy at a (relatively) higher price, and the buyers will be happy to pay say $45 per barrel. The Saudis won’t charge $15 per barrel when they can get $45 per barrel. The Saudis’ own limited oil flow will “force” ( or encourage them) them to charge more. Just asking.

        • Agaricus

          The Saudi capacity is large enough to satisfy all ‘free’ demand for a year or two, i.e., excluding situations where governments skew the market by overtaxing or blocking oil imports to protect their own oil industries. In the past they’ve cut production in order to maintain oil prices, but apparently not this time around. The reason for this is almost certainly strategic, and may include at least one objective that is only partially related to Saudi oil interests.

          This means other producers must match the low prices if they want to sell any oil. If their costs are higher than the level set by the Saudis then of course they’ll go bust, or at the least, temporarily withdraw from the market and hope prices recover. The first hit is already evident, with tar sand and oil shale businesses going down. These will be followed by other low grade or hard to get at sources such as ‘heavy crude’, deep wells and offshore operations until only the middle eastern sources are left to fight it out between themselves. Bad news for the rest of the world in the longer term, unless LENR emerges into the commercial arena before then.

          • Omega Z

            “or at the least, temporarily withdraw from the market ”

            That’s the Billion$ ticket. The Saudi’s obtain your customer/market share. Any business person will tell you customers can be expensive to obtain because they are loyal to their current supplier. But once you get them, even if you don’t always treat them well, that loyalty has become attached to you. We’ve already seen the Saudi’s cut preferred customers some slack. A Loyalty reward of sorts.

            Any harm to the U.S. is just collateral. They are not the target. Most of it’s oil comes from it’s North/South American neighbors. Very little from the M.E.. It Costs a lot of money to ship that oil halfway around the world. $40 dollar shale oil is cheaper then $30 Saudi oil.

            As in another post, They can sell from existing shale oil wells much cheaper then some seem to think. It depends on what the well owners are willing to accept as a profit margin. The Drilling of additional wells especially in a new field is where questions arise. And it doesn’t take long for a lag in well drilling to make a difference in prices.

            Even with my knowledge of some of this industry, The number of wells drilled each month(Several 1000) amazes me…

      • Omega Z


        In the U.S, they have regulations if a well is left unused, it must be Capped. Due to some unscrupulous entities in the past doing a poor job of capping & having seepage, they mandated that they be poured with concrete top to bottom. But this is for wells deemed no longer productive.

        Most wells once/already drilled can pump oil at very low prices. It becomes a matter of how little profit the owners are willing to except Knowing that the WELL will eventually go dry over a given time. During periods of low prices, they can let the well go idle for extended periods of time. Pumping it for a day or 2 every month or two… When prices recover, they can then go back to regular production.

        There are 1000’s of wells in the U,S, that only produce 5/10 barrels a day. They have been & may continue to produce this way for many decades. I’m aware of some 40 years old not far from me. When prices are up, they pump nearly everyday. When prices are down they do as described above.

        Note these are all under small companies or private owned. Big oil has to much overhead to bother with them. If they have such wells, they sell them off or cap them if no takers.

        Many things about oil are interesting & many are probably unique to the U.S. as many landowners retain mineral rights. Only 1 well per 20 acres. That 20 acres can be of any configuration. 1×20, zig-zag whatever.

        Ahh, but I see 20 acres with 10 wells. How is that possible. 1 is for 200/300 feet down. Another is for a different depth & so on. Who came up with this. I figured it out. You only have technology to drill so deep. 20 years latter, New technology lets you go deeper. It’s a progressive process & continues on the books. If you own the mineral rights, you can still sell/lease those rights by depth.

        Most oil equipment that goes to junk was probably headed there anyway. Most of it bought by small start ups at auctions by bigger companies who purchased new. Most of this equipment are money pits. Somebody else’s headache they got rid of. Like buying a used car. Most of this equipment will last many years with little care.

    • Sean

      I agree, as I do follow the markets. If however a demonstration of LENR is made beyond the little experiments shown in videos, including the 1MW plant. Lets say something impressive like a side by side Jumbo jet engine and a LENR powered engine equalling the same horse power. I believe heads will turn and money will be invested. As you say, its years off as I see it at present. Watch this space..

    • Omega Z

      You need to separate Oil price & stock price.

      Oil prices are short term supply issues. 3 to 12 months.
      If I’m a business concern that uses a million barrels of oil a month, i buy these on contract months in advance to guarantee supply for my needs at a specific price & time. Whether prices are up/down at that time no longer matters. I’ve locked in.

      If I work with a 12 month lead & you ask me about the 13th month, I’ll tell you to check back next month. When the 13th month becomes the 12th month that falls in my time window. They simply aren’t concerned with LENR until it enters there lead window. Obviously if aware, they would prepare should a transition be needed, but this wouldn’t effect their present needs & operations.
      Stock values are based on projected income. This is usually based on 15 to 20 years out. (Stupidly I believe) Given there is no Guarantee that the most profitable business may even exist beyond 5 years. Considering 4-6 year economical cycles, projected income should be based on 5 years out. I allow 10 years for energy companies as they need to think farther ahead. It takes many years to develop energy/oil fields. If they aren’t buying at auction leases & oil rights beyond 5/10 years, they may already be in trouble. LENR or Not.
      You speculate that the current situation is because these Pension funds are aware of LENR & the impact it would have on the stock prices.
      My Question is, If you were them, would you be waiting for a price point to trigger your selling of these stocks.

      I would speculate that, They bought these stocks during the previous downturn at blowout prices. They have since rode them back up & down. They have long term outlooks. As long as dividends are paid, a rise & fall is of little concern. They do this all the time. It only becomes of concern when dividends stop & it appears they may have received their last dividend for some time.

      With the lack of dividends, They would now intend to get out if the price appeared to be set to fall below what they bought them for. The fact that Few stocks have paid decent dividends for quite sometime has probably also had an impact. They have to be more conservative in investments then in the past.

      As to the Saudi’s, I believe their costs are around $10 a barrel & rising. The cheap oil is gone & the more expensive oil is being developed. Aside from that, You don’t pay $10 to get oil out of the ground & sell it for $10. It should also be noted that the Saudi’s have a goal to cease oil exports within 20 years. What remains will be kept for Saudi economic needs.

      • jousterusa

        The American Reporter pointedout last week, Citibank analysts told CNBCthat the rise in WTI and Brent oil prices is “a head fake” -their term – and that they will likely fall to the “$20 range.”

  • Agaricus

    IMHO, in a market that is already falling and is extremely nervous and unstable, any possibly bad news (for oil) will cause ‘blips’, without being in any way a prime cause of further falls. These falls were going to happen anyway, and are probably just being triggered at certain times by each apparently significant development in the LENR story. The overall trends are pretty constant when the detail is ironed out.

    • bachcole

      I just tried using “ecat” in my Scrabble game. I am sorry to report that it did not work, yet. (:->)

      Do we know how much any country, in particular the Saudi Arabia, is pumping and shipping at any particular time. Or do they keep this information to themselves. I wouldn’t put it past them to be doing an Arab Oil Glut to try to destroy the oil industry in the USA.

  • Agaricus

    Their understanding of the actual nature of LENR and its limitations and potentials are probably vague though – I doubt that many of them have much background in science.

    • bachcole

      You just came up with that in order to support your thesis, not to reveal the truth. Because I know that a lot of people here, including myself, do not have so much a great deal of background in science and we managed to see the reality of LENR++. I DO NOT spend 8 hours a day at the computer researching threats to my business. I don’t spend 8 hours at the computer, and much of the time I am goofing off and reading about health and other things. A $4+ TRILLION business has the resources to pay lots of people to do that research, and they would certainly have more of a background in science than I and many other people here do.

      So that data point is erased as untrue. Keep working at it, because you are making good points. However, this was not one of them. (:->)

      • Agaricus

        You miss the point. I’m sure the oil people are fully aware of the nature of LENR. Unfortunately that’s not who I was talking about. I was talking about traders – mostly people with backgrounds in banking who rely on their computer screens, Reuters and tittle tattle for buy and sell signals, and who have little time for research if scientific issues.

        This article give an insight into the kind of people involved, and how they work:

        • Oil traders comes in different shapes. Trading on different timeframes. You could be in out during the day because you’re not comfortable with your position while sleeping. Or you might have a several month timeframe. Or both. With different position depending on analysis. Hedge funds do exactly that and they have loads of scientists on their paylist. GS and JPM have been massively short since 2011. They have to report to CFTC. So that is a fact. As you linked; up until 2010 the producers,like Statoil used to hedge produced oil at current price a month a head of actual sale. They still do that. But. As I said before the main change is the bi banks position. It used to be long. Since 2011 it,s

    • Actually loads of quants in finance have a scientific background. The banks pay better than most for physisists and engineers.

  • Agaricus

    Saudi oil is concentrated in just a few strata quite near the surface and is exceptionally easy to access.They have spare capacity and are playing an extended game, so they’ll have enough time to increase pumping capacity if they need to.

    This Nasdaq article explains the various factors playing into their strategy quite well:

  • Edac

    I think too much is being read into happenings with LENR and stock and commodity movements. The cost of energy and associated stock are likely to go up and down several times before LENR has any significant effect. I am sure one day the will be a very significant effect – but not now. There are far too many other goings-on in the world that are having far larger effects than LENR at the moment.

    A huge short interest in any commodity usually means it is due for a reversal, even if only at short term reversal.

  • Private Citizen

    Not sure what it will take to convince the world LENR is real, but i doubt current energy moves are from fear of imminent disruption–probably more about insider trading on insider market manipulations to further geopolitical economic warfare.

    Do you really think that after a year, when Rossi emerges to tell us his magnificence of an industrial plant is a success, the world will suddenly believe? If just his presence in a lab, removing fuel samples caused incredulous cries of fraud, what about his marathon vigil in the plant? So what happens after that, 2 more plants and another year?

    Eventually it is going to take true, open, multiple independent verifications, in my humble–as many tests by as many parties as it takes. The sooner IH gets that message, the sooner they will get patent rights and $billions in investment capital. Quit the feckless slow-roll and the rope-a-dope and give the world LENR, asap!

    Yeah, Rossi owes me nothing. Awkkk! Poly want a cracker.

    • Omega Z

      I want my cherry pie ala mode NOW, But I realize it will be another hour before the pie is done & out of the oven..

      This is the IH/Rossi situation. It’s not yet ready. I bet Donuts to Dollars they are just as anxious as we are to show this to the world.
      This is human nature. We all can’t wait to show our master piece whether a piece of art were working on or what ever.

      • Private Citizen

        Pie in the sky by and by. Where have i heard that one before?

  • Omega Z

    “Money that consumers in the USA normally should have paid to Saudi Arabia is now used for shopping.”

    Not so much. It’s been mentioned in MSM that it’s having less impact on Shopping. Many are using the savings to pay new insurance costs, Paying down debt, or just trying to maintain their present standards due to stagnate wages.

    It should also be noted that the U.S. gets very little Oil from the middle east. It is more or less a token amount. Most of the U.S, oil comes from it’s North/South American neighbors.

    • LookMoo

      By “shopping” I do not only means retail business. With more money available on the market all types of business wants a part. For many in USA and EU energy prices have been an expensive and expanding account especially for people living outside the big cities where public transport is not present or practical.

      Almost every economic indicator is pointing strongly “up” and the reason for that is the new situation on the energy market..

      USA have been a major player in the gulf for one reason OIL. The last 10 years USA have been swinging from the Gulf oil to the shale oil (Canadian oil).. In 1979, the Persian Gulf countries supplied 31 percent of U.S. crude oil imports, but not any more..

      If Canada impose a ban on crude oil export (like the one USA have in place) or if other overbid USA for Canadian oil.. USA could again see an increase in energy costs.

      • Omega Z

        Note that the Oil export ban is more a symbolic issue considering the U.S. imports oil. U.S. oil prices are alined with world prices. Proof of which is the reduction in well drilling correlating with the oil prices. As the U.S. Oil industry is mostly private rather then state owned, These prices will stay connected to the world oil price.

        As to Canada, They are free to sell their Oil to whom ever wants to buy it. It is a world commodity & as to the “overbid”, that is a major part of being a commodity. It works much like an auction. Some buyers choose to buy at set price contracts with deliver dates. If prices decline, Those with contracts still pay the contracted price.

        U.S. Oil imports have always been by intent. Vast quantities of U.S. oil is under Government management as in it lies on Public lands & they determine when to auction off leasing rights. Places like off the coast of California has as much oil as Texas ever had on private land.

        Vast tracks also stay untouched in U.S. water along the East coast & the Gulf of Mexico & huge reserves in & around Alaska shorelines. This has purposely been controlled to encourage Oil imports.

        In short, The U.S. has used oil imports as a means of transferring wealth to regions of need. U.S. citizens are charitable, But they would never contribute by choice the amount that certain powers want transferred. So they do it with oil imports.

        The Jobs exported are also by intent. Most all of these products could be manufactured cheaper stateside. We’ve had the automation by which to do it for decades. The Government manipulates the laws & Taxes to encourage Corporations to offshore production.

        Corporations pay taxes in China & if those profits are brought back stateside, we tax them again. This is to encourage them to invest that money there. To keep that money there. You will find this policy practiced in most of the 1st world countries to some extent. Build an Economy & create a pacified contented Country. That’s the intent even if it doesn’t always turn out well.

        In recent times, the dynamics have changed. They want to shift the financial focus to countries with less excess resources to exploit for wealth transfer purposes. This is where Cap & Trade comes into play. 100’s of billions directly transferred through U.N. Agencies.

  • jousterusa

    It’s hard to understand why it will take a year to get the I Mw E-Cat up and running when the device was validated in Lugano months ago.

    • James Rice

      I believe the 1 Mw is based on warm cat technology, not hot cat. I wonder if that indicates possible control issues have not yet been solved with the hot cat, i.e., it is not mature enough for commercial use yet.