Until recently, I didn't really buy the market manipulation scenario. Rampant speculation? Sure. But when someone buys a futures contract and doesn't actually take delivery, the oil doesn't leave the market. Over time, things would even up. But when I start hearing 40 year veterans of the markets, and even Saudi oil ministers saying things like "I've never seen anything like this", I have to start wondering if something else isn't going on.
I think I may have at least a possibility. What if a company or country or companies or countries that are taking delivery of crude, aren't really taking delivery of crude? What if some producers set up phony transactions? What if they went so far as to deliver the product, only to have it come right back through the back door?
Why? To inflate both production and use numbers. Prices are the result of market perception. If it looks like producers are going full tilt and barely keeping up with the demand, prices rise. Creating this appearance really wouldn't be that difficult, especially if you control the books, the production, the delivery and the inventory. It would be tough for an American company. It would be a piece of cake for a state run oil monopoly....or two.
I'm not saying it's actually going down that way, but if there were a way to manipulate a price surge, that's the only way I can think of to pull it off. The only way to discover it would be to take a good hard look at the specific companies that are taking delivery of crude and see if that crude is actually getting to end users, and actually getting used.