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Oil speculation

fff

Well-known member
First we've got the credit card companies reined a bit, now it's time to look at oil and commodity markets.


The Commodity Futures Trading Commission on Tuesday will announce that it'll begin publishing how much hedge funds and other big financial firms are trading in oil and other commodities, with an eye toward curbing what critics say is speculation that pushes prices up.

The CFTC currently publishes weekly data that lumps some of the big financial firms' transactions in with those done by so-called commercial users — airlines, refiners and others who actually use the oil. Critics argue that leaves regulators and the public unaware of how much oil prices are being influenced by speculation.

"Enhancing the quality of information in these weekly reports will better inform market participants and the public about the positions of the various types of traders," CFTC Chairman Gary Gensler said in a statement that was to be made public early Tuesday.

Since oil prices hit their all-time record of $147 a barrel a year ago, there's been growing pressure on regulators to curb excessive speculation in energy trading, and commodities markets more generally. The issue resurfaced in recent months as oil prices climbed from $40 to $70 with little obvious change in oil consumption patterns.

"I'm glad that the CFTC really, for the first time I can remember, is focused on excessive speculation rather than just manipulation in the energy markets. I think that's key because excessive speculation is a different concept," said Michael Masters, a hedge fund manager who's testified before Congress on how speculators are influencing oil prices. "It's the idea that speculators can set the price of commodities once they've become a dominant force in the commodities market. That's different from . . . a small group (of traders) engaged in some form of a nefarious scheme."

As a Treasury undersecretary in the final days of the Clinton administration, Gensler was involved in the deregulation of commodities trading that critics think contributed to today's global financial crisis. As the new CFTC chairman, Gensler is making amends by holding planned hearings and winning praise from colleagues.

"In the past couple of years the U.S. taxpayer has taken a kick in the teeth on prices they pay for a loaf of bread, a gallon of gas, even the palladium that goes in the catalytic converter in your car — and it's the responsibility of the CFTC to ensure, not high or low prices, but fair prices," said Bart Chilton, a CFTC commissioner, in a statement to McClatchy.

"I think that the CFTC has not done enough to ensure that speculative limits or levels were enforced aggressively and that exemptions from these important regulations were granted appropriately. And, I believe that American consumer paid the price . . . for that lack of diligence."

The exemptions he referred to involve big Wall Street firms such as Goldman Sachs, Morgan Stanley and others, which have been exempted from limits on how much they can trade.

These financial players are treated as commercial players although they've never taken possession of the product. That allows them to hedge bets they've made in the unregulated swaps market, where private bets between two parties take place outside a regulated exchange.

The size of these swaps markets dwarfs the regulated futures market, where traders collectively determine the price of oil by trading contracts for future delivery.

Critics of the current system think that excessive speculative money in both the swaps markets and on futures exchanges is driving up oil prices.

Also driving up prices, the critics say, is the practice by pension funds and big university endowments to invest in commodity indexes, a practice called index investment.

These investors buy a range of commodities, including oil, and then hold the contract as if it were stock in a company whose share price will rise over time. Masters and other experts think the practice distorts the process of a buyer and seller discovering the real market price of a product by supply and demand. Under the new regulations, index investments also will be publicized.

Critics of the current system hope the greater transparency in commodities trading will evolve into the kind of disclosures found in equity markets, with big investors making public how much stock they own in particular companies.

"I really think commodities market positions should be identifiable just as equity markets are," Masters said.

http://www.mcclatchydc.com/227/story/71349.html
 

TexasBred

Well-known member
First we've got the credit card companies reined a bit, now it's time to look at oil and commodity markets.

Two totally different animals fff..... And 99% of what has been done to CC companies is not right either. They should have the right to penalize, riase interest rates and close accounts. Anybody with half a functioning brain would know these conditions are in the contract but YOU trigger them being used........That said, speculating in oil and gas is no different than speculating in a stock or a bond and not nearly as risky if you have a clue about what you're doing. Besides.....Barracko wants $5.00 gasoline so you'll buy those sardine can GM cars.
 

backhoeboogie

Well-known member
Our Commander and Thief took away all drilling incentives right off of the bat.

The folks who are taking the old played out fields and doing the injection wells and circulating water through the sands are telling me $60 a barrel is now the break even point. Each barrel they get has to be trucked all the way to Ponca City, OK from here. So if they are paying $60 at Ponca City, they are losing money. Shutting down operations until the price gets back up is the best option for them.

Credit Cards don't have trucking, rail, pipe line or ocean tanker expenses. How can you even start to make a comparison?
 

fff

Well-known member
TexasBred said:
First we've got the credit card companies reined a bit, now it's time to look at oil and commodity markets.

Two totally different animals fff..... And 99% of what has been done to CC companies is not right either. They should have the right to penalize, riase interest rates and close accounts. Anybody with half a functioning brain would know these conditions are in the contract but YOU trigger them being used........That said, speculating in oil and gas is no different than speculating in a stock or a bond and not nearly as risky if you have a clue about what you're doing. Besides.....Barracko wants $5.00 gasoline so you'll buy those sardine can GM cars.

Not two different animals. It's the Democrats putting the American people on equal footing with big business in both instances.

Credit Card companies still have the right to penalize late payers, raise interest rates and close accounts. None of that changed, though retoactive interest rate raises are out. They now have to give more notice and options to consumers before they do these things. Isn't it strange that those credit card offers have stopped going out to anyone breathing? Suddenly, when the credit card companies have some rules to follow, they're getting picky about who they offer their cards to.

Details here: http://www.walletpop.com/top5/prepare-for-credit-card-changes
 

hopalong

Well-known member
backhoeboogie said:
Our Commander and Thief took away all drilling incentives right off of the bat.

The folks who are taking the old played out fields and doing the injection wells and circulating water through the sands are telling me $60 a barrel is now the break even point. Each barrel they get has to be trucked all the way to Ponca City, OK from here. So if they are paying $60 at Ponca City, they are losing money. Shutting down operations until the price gets back up is the best option for them.

Credit Cards don't have trucking, rail, pipe line or ocean tanker expenses. How can you even start to make a comparison?

Becaause the liberals especially fff are clueless as to what is really happening, dont forget kolo gets a dividend check from Google, even though they don't pay dividends and she doesn't have stocks nor bonds,
and all oldtimer knows it is BUSH BUSH and the rightwingernuts (his over worked word of the month) ((like neocons)) was for a long long time! :wink: :wink:
 

fff

Well-known member
backhoeboogie said:
Our Commander and Thief took away all drilling incentives right off of the bat.

The folks who are taking the old played out fields and doing the injection wells and circulating water through the sands are telling me $60 a barrel is now the break even point. Each barrel they get has to be trucked all the way to Ponca City, OK from here. So if they are paying $60 at Ponca City, they are losing money. Shutting down operations until the price gets back up is the best option for them.

Credit Cards don't have trucking, rail, pipe line or ocean tanker expenses. How can you even start to make a comparison?

Manure. The only drilling incentive was pumped up $4 gasoline and $150 oil. They were simply not justified by the demand or by the supply of oil/gasoline.

:lol: :lol: Surely you're not trying to make me feel sorry for the oil guys because gasoline is so high? ROTFLMAO! It may scare you, but this won't be the first time old wells and fields have been shut down.

What every voter should realize when they go to the polls next time is that $4 gasoline was NEVER justified. It was brought to you by the Bush/Cheney Administration and the Republican Congress. :mad:
 

fff

Well-known member
hypocritexposer said:
FFF, ever heard of Goldman Sachs? they are speculating with your money, thanks to Obama.

You're the hypocrite, all right. President Bush gave the first money away to banks. Heck, he even hired the Chairman of Goldman Sachs as his Sec of Treasury AND gave them Federal money. One thing Obama and the Dem Congress have done since they've been in charge is require more accounting from banks that receive Federal money. Because of that required accounting, several firms are giving the money back. Under the Bush Administration, there was absolutely no oversight on how the Federal money was to be spent!
 

hypocritexposer

Well-known member
$350 billion was Bush's contribution. Obama could have stopped the second half.

how about Cap and Trade, how's that going to be used as a speculative "tool", Stimilus? any opportunity there for Goldman Sachs?

Oh, and about that transparency? Which organization does Obama plan to have oversight, the FED. He's going to expand all control that Bush ever gave.

The New York Stock Exchange LLC (“NYSE”) will be decommissioning the requirement to report program trading activity via the Daily Program Trading Report (“DPTR”), which was previously approved by the Securities and Exchange Commission (the “Commission”).1 The last trade date for which member organizations will be required to file the DPTR with the Exchange will be July 10, 2009 and therefore the last required date to submit the DPTR will be July 14, 2009.

Tuesday, June 30, 2009
NYSE Halts Transparency, Feels Goldman Program Trading Disclosure Is Unnecessary

In a move set to infuriate and send many Zero Hedge readers over the top, the NYSE has taken action to make sure that nobody will henceforth be able to keep track of the complete dominance that Goldman Sachs exerts over the New York Stock Exchange. This basically ends our weekly Program Trading updates disclosed every Thursday indicating that Goldman has singlehandedly captured all of NYSE's program trading.

How will oversight of the FED work? Not too well, it seems.

Members of the U.S. Senate today rejected a proposal for an audit of the Federal Reserve, the private institution that virtually controls U.S. interest rates, money supply and other economic influences.

The Senate vote against the plan from Sen. Jim DeMint, R-S.C., was among a series of voice votes on a number of amendments to a spending bill that provides money for Congress' own budget.
 

aplusmnt

Well-known member
so fff you are going on record to say Obama will do something about high gas prices?

That he will be able to get the prices back down closer to where they were when he came in office?

How many months before we get to show you to be wrong about your Hope and Saviour?

Gas Prices around here were in the $1.60 range when he took office. I will be waiting for that below $2.00 gasoline again! Please let me know when it will come?
 

fff

Well-known member
aplusmnt said:
so fff you are going on record to say Obama will do something about high gas prices?

That he will be able to get the prices back down closer to where they were when he came in office?

How many months before we get to show you to be wrong about your Hope and Saviour?

Gas Prices around here were in the $1.60 range when he took office. I will be waiting for that below $2.00 gasoline again! Please let me know when it will come?

Considering gasoline was $4 this time last summer, I could say that he's already done something about gasoline prices. They dropped pretty good when he was elected, but have gone up way too much since then.

I doubt we'll see gasoline below $2 on a regular basis ever again. We can think the Bush/Cheney Administration for that.
 

hypocritexposer

Well-known member
fff, what will happen if you get your wish of the big oil corporations being non-profitable?

At present, private oil corporations control about 5-8% of the oil reserves, worldwide.

the Nationals (Russia, Saudia Arabia, Ven. Iran etc. control the rest. will they have more or less control over the supply, and price of oil, if the American companies have less exploration $$ available?

Right now the oil corporations are spending profits they made while prices were at record levels to buy/develop alternative energy.

A little off topic, but any US aid money that goes to countries with National oil companies, offsets oil profits that would be otherwise spent on the popultaions of those countries.

throw in cap and trade, and the question would be, how is this going to affect US oil prices? remember oil is traded on a global market, the prices are controlled by controlling the supply?
 

Sandhusker

Well-known member
fff said:
aplusmnt said:
so fff you are going on record to say Obama will do something about high gas prices?

That he will be able to get the prices back down closer to where they were when he came in office?

How many months before we get to show you to be wrong about your Hope and Saviour?

Gas Prices around here were in the $1.60 range when he took office. I will be waiting for that below $2.00 gasoline again! Please let me know when it will come?

Considering gasoline was $4 this time last summer, I could say that he's already done something about gasoline prices. They dropped pretty good when he was elected, but have gone up way too much since then.

I doubt we'll see gasoline below $2 on a regular basis ever again. We can think the Bush/Cheney Administration for that.

If this isn't a credibility / intelligence defining post..... :lol: :lol:

Back to the topic; The CFTC has good rules, they just need to get back to the basics. The Goldman's, Morgan Stanley's, etc.... of the world clearly are speculators and should have to play under the rules for speculators, not commercials. The rules get bent for them because the make the exchange a heck of a lot of money because of their volume of trades.
 

backhoeboogie

Well-known member
fff said:
backhoeboogie said:
Our Commander and Thief took away all drilling incentives right off of the bat.

The folks who are taking the old played out fields and doing the injection wells and circulating water through the sands are telling me $60 a barrel is now the break even point. Each barrel they get has to be trucked all the way to Ponca City, OK from here. So if they are paying $60 at Ponca City, they are losing money. Shutting down operations until the price gets back up is the best option for them.

Credit Cards don't have trucking, rail, pipe line or ocean tanker expenses. How can you even start to make a comparison?

Manure. The only drilling incentive was pumped up $4 gasoline and $150 oil. They were simply not justified by the demand or by the supply of oil/gasoline.

:lol: :lol: Surely you're not trying to make me feel sorry for the oil guys because gasoline is so high? ROTFLMAO! It may scare you, but this won't be the first time old wells and fields have been shut down.

What every voter should realize when they go to the polls next time is that $4 gasoline was NEVER justified. It was brought to you by the Bush/Cheney Administration and the Republican Congress. :mad:

You are COMPLETELY clueless. Did you even buy fuel after the incentives for domestic supply were implemented? Those incentives are what gets us out from under the mercy of the Saudi cartel.

Your commander and thief is the one who is putting the Saudi Cartels back in control and prices have risen drastically since he took office and started hosing everything up. Where have you been? Can you pull your head out?

Somebody put some smelling salts under Frankie's nose? If that doesn't do the trick she needs to be committed.
 

backhoeboogie

Well-known member
aplusmnt said:
so fff you are going on record to say Obama will do something about high gas prices?

That he will be able to get the prices back down closer to where they were when he came in office?

How many months before we get to show you to be wrong about your Hope and Saviour?

Gas Prices around here were in the $1.60 range when he took office. I will be waiting for that below $2.00 gasoline again! Please let me know when it will come?

She hasn't bought any fuel for the last year. It is obvious.

She thinks Obama's Saudi buddies are going to shed tears when they get the price back up where they put it. She thinks Bush wanted it to be $150 a barrel. Just read her words.
 

backhoeboogie

Well-known member
fff said:
:lol: :lol: Surely you're not trying to make me feel sorry for the oil guys because gasoline is so high? ROTFLMAO!

If you go back and read the words you'll see that I was referring to Maw and Paw producers who are in the salvaging what was left behind business. As usual, you just ranted away about something you know nothing about.

Go back to your cut and paste methodology from the liberal left. Atleast those folks have actually kept up with current world events.
 

TexasBred

Well-known member
fff said:
aplusmnt said:
so fff you are going on record to say Obama will do something about high gas prices?

That he will be able to get the prices back down closer to where they were when he came in office?

How many months before we get to show you to be wrong about your Hope and Saviour?

Gas Prices around here were in the $1.60 range when he took office. I will be waiting for that below $2.00 gasoline again! Please let me know when it will come?

Considering gasoline was $4 this time last summer, I could say that he's already done something about gasoline prices. They dropped pretty good when he was elected, but have gone up way too much since then.

I doubt we'll see gasoline below $2 on a regular basis ever again. We can think the Bush/Cheney Administration for that.

fff...pull your head out. Oil and gas was coming down long before barracko hit the WH. Gasoline has gone up here almost 100% since he was innaugurated. But he himself said he expected oil and gas to go that high...just not quite as quickly as it did....now his policies will send it back up.....he wants $5.00 gas and he'll get it....sit back and watch it happen.

Oh and by the way. I received 3 "pre-approved" credit card notices last week and had my line increased on the other. The same one that upped my limit is paid in full every month and this month had one charge for $42 for diesel..guess what....they put $1.50 "minimum finance charge" on it even tho it had only been on my account for 12 days. That's a 72% APR. And I "WAS" a good customer. The card is now cancelled at my request.
 

aplusmnt

Well-known member
fff said:
aplusmnt said:
so fff you are going on record to say Obama will do something about high gas prices?

That he will be able to get the prices back down closer to where they were when he came in office?

How many months before we get to show you to be wrong about your Hope and Saviour?

Gas Prices around here were in the $1.60 range when he took office. I will be waiting for that below $2.00 gasoline again! Please let me know when it will come?

Considering gasoline was $4 this time last summer, I could say that he's already done something about gasoline prices. They dropped pretty good when he was elected, but have gone up way too much since then.

I doubt we'll see gasoline below $2 on a regular basis ever again. We can think the Bush/Cheney Administration for that.

How biased can you be? You think he has already did something about gas prices? What did he do? Any bills he signs any regulations are a matter of public record so what did he do?

Gas prices had already dropped before he took office, they have risen since he took office.

And what did Bush do that would keep prices never to go below $2.00, could you be specific and why can Obama not undo it?

In reality if Bush made the economy so bad then that would help gas prices to go below $2.00 not never go there. In hard times you get deflation which pushes prices down not up!

Do you have any idea about anything that you talk about? :roll:

You look like an idiot, blaming Bush all them years for gas prices going up then your saviour had a faster rise than under Bush at same time.

Just like you never would acknowledge that gas prices were rising so fast under Clinton at the end of his second term that Al Gore called for a selling of the National Reserves on his campaign trail to slow the rise!

You are so biased you offer no accurate information to any discussion on this board!
 
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