Stop Oil Speculation Now!

Of coarse it will make a difference to drill now, dont be a fool....How you say? Well just the hint of a rumor of an attack on Iran, bam, the price goes up. If its announced that it is approved by congress and passed, it will drop you mark my words, then once they "announce" that we are actively setting up drilling and its a go, it will drop drastically again. I would be willing to bet with just these 2 things taking place it will bring oil to under $100 again alone. Then in a few more years it will be back to $50, so why not start now. I can promise you if you do nothing it will not change for the better. So its your choice, stick with the way it is, or try to do something about it

reply to post by jefwane


In regard to the $15 drop in oil, I doubt everyone all of a sudden started shorting oil. There are probably many that still feel secure in a long position as the subsequent rebound indicates.

reply to post by ChocoTaco369


It isn't the futures market that is the problem, so don't be embarrassed for me. It is the unregulated speculation and hording being done by investment banks and hedge funds like MS and GS that have moved offshore to circumvent FCTC oversight, and a do nothing Congress that is allowing the pillaging to continue that is the problem.

reply to post by ChocoTaco369


Funny then that this sort of thing never happened to oil prices until the US government unregulated the futures market?

Oil prices used to rise and fall nice and smoothly while it was regulated.

In 2006 when the CFTC lost more regulating control over the energy futures is when oil prices, shortly afterward, started skyrocketing.

Coincidence?

I don't think so!

The system ran smoothly when it was regulated, why did they feel they had to unregulate it and then just sit back and watch the oil prices rise!

Why did they feel that they HAD to unregulate energy futures to begin with?

What was wrong with the way it was regulated before 2000?

The CFTC (Commodity Futures Trading Trading Commission) was designed to keep speculation/manipulation of commodity prices down.

‘Perhaps 60% of today’s oil price is pure speculation’

The report pointed out that the Commodity Futures Trading Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, “Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.”

Further, the CEA directs the CFTC to establish such trading limits “as the Commission finds are necessary to diminish, eliminate, or prevent such burden.” Where is the CFTC now that we need such limits?

The CTFC "had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand!

They used to be able to keep prices of oil commodities from being manipulated, but now oil futures commodity traders are allowed to trade without the CFTC regulating them. Their hands have been tied and now traders can manipulate the market by speculating on oil futures without the oversight of the CFTC.

Now speculators aren't only just speculating on "supply and demand" but also you'll see the market react to the news, when one country threatens another country or when an article comes out that may mention how much more oil China might be using in 10 years. Nobody needs anymore oil, so the demand didn't go up, and the supply has remained constant, Yet the price of oil jumps!

That is not speculation on the "supply and demand" of oil!

[edit on 7/22/2008 by Keyhole]

reply to post by ChocoTaco369


*sigh* here we go again. I would like to hear you explain what the US is going to do with all the oil it would pump tomorrow if they drilled today. Where are they going to get it processed? Where are you going to store this oil until you can get it refined?

That right there is my main point. Oil speculators know that the US cannot refine any more oil. That is why the price should not drop significantly if they drill. Oil sitting around in a tank indefinitely is no different than oil sitting around in the ground.

reply to post by Keyhole


I think you are right on with this one....

They love to "bend" the rules to fit their agenda.

Speculators were small entities before 2006. Since 2006 the ETF, hedge and private equity funds have tried to use the futures market like the stock market. These managers never traded futures before. They were essentially stockbrokers and mutual fund managers. All on a sudden they decided like subprime stupidity they must jump into commodity futures pits. They were actually driven by the competition to produce 100, 200 or even 300 % profits.

One of the most idiotic thing I keep hearing on ATS is that:

"All was fine and dandy in the US economy until those pinko commie liberal homosexual abortion lovin', did I say liberals? got congress....."

As these billions of dollars made its way into wheat, Corn, Soybean, oil, gasoline and other commodity futures, prices moved up. The CFTC increased the margin from $1000 to $1500. Normally in the stock market, you can only buy $2000 worth stock with $1000. Right now these moron fund managers are buying $140,000 worth crude oil with only $7250 maintenance margin money. For these funds, $7250 per contract is nothing.

Please read this article......

Nancy and Harry didn't do this......the CFTC did. Look it up.
I'm sure it will be easier to blame the "liberals" for this though. So, go ahead.....

Source 1
Source 2

And just so you know WHO wanted to be deregulated....
I bring you ....THE SCOUNDRELS.


Energy Markets Advisory Committee...

Bob Anderson
Committee of Chief Risk Officers

Laura Campbell
Memphis Light, Gas & Water

Donald Casturo
Goldman Sachs Group, Inc.

Paul Cicio
Industrial Energy Consumers of America

Bo Collins
1.618 Group LLC

Sean Cota
Cota & Cota Oil & Propane

Kevin Fox
D.E. Shaw & Co., L.P.

John P. Heimlich
Air Transport Association

R. Skip Horvath
Natural Gas Supply Association

Brian Kelly
Colonial Energy, Inc.

Anthony Mansfield
Heller Ehrman LLP as a representative of Shell Trading (US) Company

William McCoy
Morgan Stanley

James Newsome
NYMEX, Inc.

Ron Oppenheimer
Merrill Lynch Commodities, Inc.

Paul Pantano
McDermott, Will & Emery as a representative of the Futures Industry Association

Satu Parikh
Lehman Brothers, Inc.

Robert Pickel
ISDA

Dr. Craig Pirrong
Bauer College of Business
University of Houston

Michael Prokop
Amerex Brokers LLC

Richard Sandor
Chicago Climate Exchange, Inc.

John Shelk
Electric Power Supply Association

Foster Smith
J.P. Morgan

Jeffrey Sprecher
IntercontinentalExchange, Inc.

Mark Stainton
Citadel Investment Group, L.L.C.

Don Whittaker
American Petroleum Institute

Ungh. Ok, I understand that everyone is looking for names to pin the blame to... but it's a fool hearted run you're getting into.

The speculators are : Everyone who has invested in Oil.

There's no-one actually sitting there, hands folded, staring maniacally at a load of cash saying "Geeves! Raise the value of oil another 20 dollars!"

It's all in how the system of investment works.

I'm assuming most of you have learned how investment works, for any of you that have yet to go through high school, I'll give a basic example.

Person A has an investment of 5,000 barrels of oil. Technically, this would mean he owns 5,000 barrels... if it were a long time ago. But now it's mostly an imaginary connection to the physical goods. However, the value of that good is still directly linked to the investment value.

So, along comes Person B, who noticed his investment in, say, gold, wasn't doing as well as he had liked, and noticed that Person A's investment in oil is getting valuable. So person B asks person A if he can some off him.

Person A says "Well, the value of oil right now is $100 per barrel. But I don't want to part with it at face value... I want to make a profit off you, so I'll sell it at, say, $105 per barrel."

Person B, knowing that the value is continuing to climb, agrees, knowing it will be worth much more later on.

The other investors notice this $5 increase, and use that as an example of what they can sell theirs for to other investors.
Hence... the value of it just went up $5.

Of course this is a very basic example, you'll get into learning about trading in school at some point... assuming they haven't totally screwed up the education system since the early 90's.


You see, it's not really the people you want to blame, it's the system by which they use to trade.
They need to make a profit, they aren't going to purposely depreciate the value of their investment just because you want them to.

Essentially, you can't stop investors from being investors, otherwise, the whole economy stops.

These are the speculators, and there's nothing evil about what they're doing.
It just means the investment system has a flaw.

Problem now is, how do you regulate the sale of oil investments without causing irreparable damage to the rest of the economy?

Originally posted by RRconservative
Stop giving oil speculators reasons to think prices will go up.

I think that especially the large investors who drives market trends understands that oil price rises will be supported by the US government as one of the strategies to create a market for all thos dollars they have to print to finance the Pentagon and it's wars.

Start drilling in the 1.1 BILLION acres that are currently off-limits.

While i don't have any objection to that a fraction of the investment required to bring that US oil to the market can very probably yield 5-10 million barrels a day from Iraqi oil fields. Considering that you that there is no known oil reserves that could be exploited so cheaply ( we are talking a few dollars per barrel) one may very well assume that the invasion was meant to keep oil expensive and supply restricted.

Bush lifted the National moritorium on drilling, it is time for Congress to do the same.

End the Pelosi Premium!

It's all just posturing for votes. These people will invade and crush entire nations to ensure high oil prices and they are probably not going to be stopped by a senate filled with oil executives and investors.

Stellar

reply to post by johnsky

These are the speculators, and there's nothing evil about what they're doing.
It just means the investment system has a flaw.

The flaw would be the wholesale deregulation, across the board, in the name of corporate interests.

Originally posted by budski
Capitalism at work.

We all created the monster - now we moan when it's out of control?

Common people do not benefit by capitalism and have been fighting it in it's various guises for millenia. Please don't use that 'we' when that 'we' has gotten as 'wealthy' as we are today by keeping the capitalist at bay.

It's time to get back to basics.

Which are rarely as simply as we might like it to be. I am quite guilty of this myself so don't waste time trying to log out of my eye; you just work on your splinter.

Interestingly, the SEC moved in when it was alleged there had been stock manipulation of financial companies here but fail to act when it's about oil.

Wonder why... (sarc)

I doubt that there is a easier mechanism to create a market for dollars than to manipulate the oil market so as to best raise prices. Considering the 85 odd million barrels, that gets traded on the average day represents billions worth of dollars i am fairly confident that it's a good measure of the decline of the US as financial power. A the US economic collapse ( you say recession i say decline) continues and speeds up oil prices will in my opinion keep climbing.

Stellar

Originally posted by Grafilthy

And just so you know WHO wanted to be deregulated....
I bring you ....THE SCOUNDRELS.

You forgot McCain's ex-economic brain child (who he still consults with) Phil Gramm, who is the one who "slipped the "Enron Loophole" through Congress in 2000!

McCain Defends 'Enron Loophole'

Gramm's timing was perfect. Members of Congress wanted to go home for the holidays. They lumped H.R. 5660 — the Commodity Futures Modernization Act — into a package with several others and created H.R. 4577, the Consolidated Appropriations Act of 2000.

The bill was passed unanimously by the Senate in December of 2000. These men were Phil Gramm's stooges. Either that or they were in on the plan to fleece the oil goose and their fellow Americans.

*****SKIP*****

Here is the problem with HR 5660. This “Commodities Futures Modernization Act of 2000” attempted to resolve a dispute over jurisdiction between the SEC and the CFTC. Two key elements of the bill appear to have a direct impact on the markets and the financial services industry, specifically investment banks and hedge funds. The act created the “Enron loophole.”

That loophole exempts energy speculators who make trades electronically from U.S. regulation. Some people argue that the unregulated energy speculation, made legal back in 2000, can account for much of the inflated rise in oil prices.

Not to mention his wife was working for Enron at the time and making $1 million a year!

[edit on 7/22/2008 by Keyhole]

reply to post by Icarus Rising

Again, blaming the speculators is akin to blaming the messengers. The oil price is set on the futures market, so it IS the future's market that dictate the prices. What decides if the price goes up or down on the futures market is the oil speculators - every single guy and girl that buys and sells oil day to day based on events. They gamble if oil is going to go up or down in the future, and since Congress does not want to increase supply - in fact, they want supply to decrease - when world demand is going through the roof, it goes wayyyy up.

Drill today and the same market forces that drove oil up at a record pace will drive it down at a record pace, just like GWB's announcement drove it down at a record pace. Oil is down over $4.50 per barrel now. If Congress doesn't ACT, all the losses will just add back up in time.

[edit on 22-7-2008 by ChocoTaco369]

Originally posted by Keyhole
reply to post by ChocoTaco369

 

Funny then that this sort of thing never happened to oil prices until the US government unregulated the futures market?

Oil prices used to rise and fall nice and smoothly while it was regulated.

In 2006 when the CFTC lost more regulating control over the energy futures is when oil prices, shortly afterward, started skyrocketing.

Coincidence?

I don't think so!

Everything you said is completely irrelevant. Completely.

In the 1960's, we had more supply and refining capability than we had today. Until recently, we were the ONLY world superpower. China was tiny. India was tiny. Brazil was tiny. Osama Bin Laden was a little boy. There was no 9/11. No Muslims burning Paris to the ground. Etc. We were the only top dog in the world until recently!

We are in territory today that we have NEVER been in. We have other nations that are becoming bigger oil pigs than we are. THAT is why prices have gone up the way they have - worldwide oil demand has increased on a path never seen before in the history of mankind, and the people who control our country have done NOTHING to secure our future. In fact, they are letting our supply and refining capabilities DECREASE in an attempt to make the public miserable with high prices. The Democrats want Congressional seats and POTUS BAD, and an angry, ignorant public strapped for cash will ultimately blame the president, the administration and ultimately the Republicans when in reality, they're the only ones doing anything to relieve prices.

reply to post by ChocoTaco369


A big part of the problem is these hedge funds and investment banks that have moved offshore to better manipulate the futures market are treated as energy suppliers when they aren't. They are under no obligation to deliver on their oil contracts. Morgan Stanley has become the biggest stockpiler of heating oil in the Northeast. What does that tell you? They are purposely taking the oil off the market to artificially short the supply and drive the price up further, making their long position in the futures market a sure thing. It is criminal collusion to defraud the public of a crucial commodity for the purpose of exorbitant profit. It is wrong, evil, insane, and it must be stopped immediately.

[edit on 22-7-2008 by Icarus Rising]

reply to post by Rook1545

Well, let's see. First off, the US needs to drill its OWN oil. Nothing is more valuable than energy independence, and if we can get off of OPEC, true stability will reach the US market. Every time some nutjob burns an oil field in Nigeria or Saudi Arabia, it won't affect US oil supplies. We will cut transportation costs as well. This is the first thing we can do.

With the US out of the world oil market picture, the excess oil will get bought up by more and more nations. Between our own energy independence and the excess oil in the world market, every nation will increase the size of our national oil reserves in order to relieve the tightness of national supplies that all nations face. Any excess oil in the market will just add to a drop in prices since it is STILL getting bought up, just at a slower rate.

Excess oil will do nothing but drop prices, and the more oil on the market, the lower the price. It really isn't that hard.

reply to post by ChocoTaco369

And you don't think deregulation has anything to do with this???
You are sadly misinformed.

THIS IS NOT A SUPPLY AND DEMAND ISSUE!!!!!!!!!!!!!!!!!!!!!!!!!!!1

reply to post by Icarus Rising

How does Morgan Stanley buying more oil equate to a massive conspiracy of them driving up oil prices on purpose? Everything isn't a conspiracy, you know.

Maybe Morgan Stanley is buying more oil because it keeps skyrocketing every day, and they are stockpiling more and more $140/barrel oil because they fear it'll go up to $200/barrel and they won't be able to afford it, so they're stockpiling the cheaper oil as a business move? That's what Southwest Airlines did, and they're the only guys turning a profit because they're getting cheaper jet fuel than everyone else.

Again, you're blaming the messengers. Oil prices have risen quickly because we are facing a demand issue unseen in the world during mankind's existence, and our supply decreases every day. Pair that with a crashing US Dollar at a rate never seen before thanks to record low interest rates to protect the banks and the handful of idiots who got in over their heads by not reading their mortgage TOC's (who DESERVE to fail in a free market, btw), and you have a massive, massive oil spike.

You want cheaper oil? Raise interest rates, let the idiots who got in over their heads with mortgages fail and DRILL DRILL DRILL our way out of it, which is a lot easier than you think. That's all we have to do, and oil will be below $100/barrel in days. In the years to come, with a stronger US Dollar and guaranteed energy independence in 5-10 years, expect $40/barrel as the norm once again. $0.88/gal may never be seen again as world demand has increased too much in the past 10 years, but $1.88/gal will be a welcomed improvement to the American people for years to come.

[edit on 22-7-2008 by ChocoTaco369]

reply to post by ChocoTaco369

Maybe Morgan Stanley is buying more oil because it keeps skyrocketing every day, and they are stockpiling more and more $140/barrel oil because they fear it'll go up to $200/barrel and they won't be able to afford it

Cant afford it????

Revenue ▲ US$ 84.12 billion (2007)
Net income ▲ US$ 3.209 billion (2007)

WIKI

Guess they spend all that money on the necessities then, like gas, food, and rent. Notice the up arrows??? That means profit.

reply to post by ChocoTaco369


Imo, MS is keeping the oil off the market in order to drive the price up as far as they think it will go, at which point they will sell it to GS, and make an even more exorbitant profit. GS will then do the same thing in return, and the merry-go-round will keep turning while the rest of us become homeless and starve.

Yes, this is a conspiracy of monumental proportions taking place right before our eyes.