speculators drove up oil prices [Archive]

Nbadan

01-12-2009, 02:44 AM

BacktoBasics

01-12-2009, 09:50 AM

There are people who didn't know this?

johnsmith

01-12-2009, 10:15 AM

Told ya so....

http://spurstalk.com/forums/showthread.php?t=101727&highlight=speculators

http://spurstalk.com/forums/showthread.php?t=103418&highlight=speculators

http://spurstalk.com/forums/showthread.php?t=101027&highlight=speculators

http://spurstalk.com/forums/showthread.php?t=99458&highlight=speculators

Actually, you copied and pasted articles that told us so. You told us nothing. Which is about par for the course when it involves you.

Wild Cobra

01-12-2009, 11:23 AM

Actually, you copied and pasted articles that told us so. You told us nothing. Which is about par for the course when it involves you.
That's Propaganda Dan for you.

Can someone explain to me how speculators drive up the price? I still haven't seen it. If a speculator buys a future for too much, he loses money at market. Period. It still boils down to supply and demand.

DarkReign

01-12-2009, 11:46 AM

That's Propaganda Dan for you.

Can someone explain to me how speculators drive up the price? I still haven't seen it. If a speculator buys a future for too much, he loses money at market. Period. It still boils down to supply and demand.

Should have watched 60 Minutes last night.

Who is the biggest oil company in the world? Morgan Stanley.

It all started with Enron and their goal to control the Commodities market, energy in particular (electricity specifically). After they fell, it was estimated that they alone drove up the price for electricity by as much as 300% for residents on the West Coast.

Now, you have large investment houses using their investors money to buy "stock" in the price of oil/natural gas/coal/etc. They invest hundreds of billions in an attempt to drive the price up, even when demand is low.

I have said it before, I am no economist (I think its a fucking farce), so please excuse any errors as purely my fault and not of the subject matter.

cool hand

01-12-2009, 11:55 AM

its sad because people on this board swore up and down that it was supply and demand.......fucking lemmings.

Winehole23

01-12-2009, 02:16 PM

http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml?tag=topHome

TDMVPDPOY

01-12-2009, 10:57 PM

hedge funds are reason for blame with the increased prices....i wonder how many of them are still around??? hahahhahaa

exstatic

01-12-2009, 11:56 PM

:lol It didn't take Sherlock Holmes to figure this out, at least forensically. The capital balloon deflates in a couple of weeks, and oil goes from $150 down to $40. There was an oil bubble. It popped. Q.E.D.

boutons_

01-13-2009, 01:45 AM

There were people in here arguing that the $145 oil was due to demand above supply, China, India, blah, blah.

The capitalists and money men were screwing us all, always have, always will.

Nbadan

01-13-2009, 03:12 AM

its sad because people on this board swore up and down that it was supply and demand.......fucking lemmings.

True dat! "Many people" may have known, but only a few stuck their necks out for this conspiracy theory...

DarrinS

01-13-2009, 08:45 AM

You mean to tell me that you can drive up oil prices without fake terrorist attacks, illegal wars, and no-bid contracts?

What a concept.

Sincerely,

Nbadan, Galileo, and boutons

johnsmith

01-13-2009, 09:02 AM

True dat! "Many people" may have known, but only a few stuck their necks out for this conspiracy theory...

Dan,

THIS ISN'T REAL LIFE!!! IT'S A MESSAGE BOARD DEDICATED TO A PRO BASKETBALL TEAM!!! STOP ACTING AS THOUGH YOU HAD TO "STICK YOUR NECK OUT" OR THAT THIS SHIT MATTERS TO ANYONE OTHER THAN YOU!!!

And like I said before, you only copied and pasted.

ChumpDumper

01-13-2009, 12:18 PM

Can someone explain to me how speculators drive up the price? I still haven't seen it.:rollin:rollin:rollin

You never will.

Wild Cobra

01-13-2009, 01:04 PM

:rollin:rollin:rollin

You never will.

I know. There is no evidence.

ChumpDumper

01-13-2009, 01:23 PM

Of course there is. You think speculation doesn't exist and never has.

You're simply wrong. It's not my fault that you can't understand the concept.

boutons_deux

05-24-2011, 09:20 AM

With Speculation Running Rampant, House GOP Proposes 15 Percent Cut To Oil Market Watchdog

ExxonMobil CEO Rex Tillerson admitted earlier this month that, according to traditional supply and demand, oil should cost about $60 or $70 per barrel, instead of hovering around $100. Analysts at Goldman Sachs estimated that speculation was adding roughly $27 per barrel earlier this month. Instead of addressing this clear problem, House Republicans have proposed cutting the budget of the Commodity Futures Trading Commission — which oversees trading in energy markets — by 15 percent from its 2010 level:

The CFTC’s budget would fall to $172 million from $202 million under the plan to be considered tomorrow by the agriculture subcommittee of the House Appropriations Committee. It “provides the necessary resources” for the CFTC to fulfill its duties, Representative Jack Kingston, a Georgia Republican and subcommittee chairman, said in a statement. President Barack Obama had requested $308 million in his 2012 budget proposal.

Since 1990, speculators have more than doubled their share of the oil futures market. Back then, they composed roughly 30 percent of the market; they make up nearly 70 percent today. According to the CFTC, speculative positions in energy markets — oil and otherwise — are at an all-time high.

http://thinkprogress.org/2011/05/24/oil-speculation-gop-budget/

=============

Oil speculation causes $10Bs of excess costs to consumers yearly (like 40% speculation premium), but VRWC megaphones blame it all on Barry while attacking/defunding, eg, CFTC.

Winehole23

05-24-2011, 09:24 AM

Phil Gramm should be strung up for enabling it.aGREEED, BUT ONLY WITH sOMMERS AND rUDIN NEXT TO HIM.

Winehole23

05-24-2011, 09:26 AM

oNCE YOU START HANGING F%#&@!S, WHY STOP AT ONE?

Winehole23

05-24-2011, 02:04 PM

(capitalized for ironic emphasis. )

WH23 does not actually wish Gramm Rudin or Summers dead, nor does he approve or support any impromptu parajudicial scheme to accomplish the same.

Winehole23

05-24-2011, 02:05 PM

I do strongly disapprove of their innovations regarding the financialization of the US economy over the last, say, 12-15 years.

boutons_deux

05-24-2011, 09:30 PM

CFTC Charges Oil Traders For ‘Puking’ On Market

The US commodities regulator has charged a trading house and two individuals with manipulating oil prices in 2008 by allegedly amassing dominant positions in the physical market that created the impression of a shortage.

http://thinkprogress.org/2011/05/24/cftc-charges-oil-traders/

===========

How's that supply-ey and demand-ey workin out for ya? WC?

greyforest

05-24-2011, 11:37 PM

There are people who didn't know this?

Think about all the people you know. How many do you think know about speculation and commodity bubbles?

People are generally pretty damn dumb, unfortunately.

Trainwreck2100

05-24-2011, 11:41 PM

Think about all the people you know. How many do you think know about speculation and commodity bubbles?

People are generally pretty damn dumb, unfortunately.

lol jump in your delorean, hit 88 and go back 2 years and maybe he'll read this reply

Wild Cobra

05-25-2011, 12:03 AM

lol jump in your delorean, hit 88 and go back 2 years and maybe he'll read this reply
Here's the power lines that will give you the 1.1 GWatts also. The two wire Pacific DC Intertie (http://en.wikipedia.org/wiki/Pacific_DC_Intertie) carry as much as 3.1 GWatts. Just hit your 88 MPH here on Highway 197, in Oregon.

Google map Street View 500KV power line from The Dalles Or, to Los Angeles CA (http://maps.google.com/maps?q=the+dalles+or&oe=utf-8&client=firefox-a&ie=UTF8&hl=en&hq=&hnear=The+Dalles,+Wasco,+Oregon&ll=45.575462,-121.104283&spn=0.002099,0.005118&t=h&z=18&layer=c&cbll=45.575462,-121.104283&panoid=cFKmGfnw5vh2oqJTCvR8zA&cbp=12,130.86,,0,-13.87)

Fabbs

05-25-2011, 12:23 PM

Originaly posted by ChumpDumper

Of course there is. You think speculation doesn't exist and never has.

You're simply wrong. It's not my fault that you can't understand the concept.

I know. There is no evidence.
Wild Cobra, boutons already posted the link to one article. Here is another. That gonna do it for ya?

U.S. sues oil traders for price manipulation
The Commodity Futures Trading Commission accuses two well-known traders and two trading firms owned by Norwegian billionaire John Fredriksen of making $50 million by squeezing markets in 2008.

May 25, 2011

U.S. regulators launched one of the biggest ever crackdowns on oil price manipulation Tuesday, suing two well-known traders and two trading firms owned by Norwegian billionaire John Fredriksen for allegedly making $50 million by squeezing markets in 2008.

The Commodity Futures Trading Commission said traders James Dyer of Oklahoma's Parnon Energy and Nick Wildgoose of Europe-based Arcadia Energy amassed large physical positions at a key U.S. trading hub to create the impression of tight supplies that would boost oil prices.

Later, they dumped those barrels back onto the market, causing prices to crash and racking up profits from short positions they had accrued in futures markets, the suit said.

Full article:
http://www.latimes.com/business/la-fiw-oil-traders-20110525,0,474795.story

Wild Cobra

05-25-2011, 06:05 PM

Fabbs, you are a low-life liar.

I acknowledge speculation has an effect. My position is that it is a minor effect compared to supply and demand.

fyatuk

05-25-2011, 06:19 PM

Fabbs, you are a low-life liar.

I acknowledge speculation has an effect. My position is that it is a minor effect compared to supply and demand.

Supply and Demand caused the price to increase roughly 30% (of original value), while the total price more than doubled (over 100% increase).

At least that's what the experts appear to be saying.

Of course, you are right because the speculators are quite often forcibly manipulating supply, so even the speculator's share is techinically supply and demand...

Wild Cobra

05-25-2011, 06:26 PM

Supply and Demand caused the price to increase roughly 30% (of original value), while the total price more than doubled (over 100% increase).

At least that's what the experts appear to be saying.

Of course, you are right because the speculators are quite often forcibly manipulating supply, so even the speculator's share is techinically supply and demand...
Speculators can act like a dam on a river, slowing the volume of oil. However, at some point, the flow continues. Natural supply and demand is a greater force that those created artificially.

boutons_deux

05-25-2011, 06:34 PM

Exxon and Goldman are always lying, but any:

"ExxonMobil CEO Rex Tillerson admitted earlier this month that, according to traditional supply and demand, oil should cost about $60 or $70 per barrel, instead of hovering around $100. Analysts at Goldman Sachs estimated that speculation was adding roughly $27 per barrel earlier this month"

supply and demand is obviously not referring to speculators who have not demand for oil and never take delivery.

"My position is that it is a minor effect compared to supply and demand."

any evidence or just your usual ideological fantasy?

RandomGuy

05-25-2011, 06:45 PM

Speculators can act like a dam on a river, slowing the volume of oil. However, at some point, the flow continues. Natural supply and demand is a greater force that those created artificially.

That may not be holding as true today as it has in the past.

Consider:

You are convinced that the price of oil MUST go up. You tell a Really Smart Guy at an investment bank that you want an investment vehicle to take advantage of that.

The investment vehicle is a derivative of some sort that bids on a contract for delivery in say, 1 year.

You wish to hold on to your investment, and the pass-through instrument continues. At the end of that year, the manager sells that contract for delivery, and then buys a new contract.

This keeps that extra demand in the system.

As more and more people start betting that the price of oil will always go up, you will have a constant increase in demand. A self-fulfilling prophecy.

As long as oil keeps going up. (sound familiar? insert "house prices" for "oil")

I think we are seeing the makings of the next global bubble. The underlying supply and demand though, are such that this bubble has a great chance of being sustained for a while, in my opinion.

I expected prices to go up, but not by quite as much as the have recently.

Wild Cobra

05-25-2011, 08:36 PM

Fabbs

05-26-2011, 12:30 AM

Fabbs, you are a low-life liar.

I acknowledge speculation has an effect. My position is that it is a minor effect compared to supply and demand.
"ExxonMobil CEO Rex Tillerson admitted earlier this month that, according to traditional supply and demand, oil should cost about $60 or $70 per barrel, instead of hovering around $100. Analysts at Goldman Sachs estimated that speculation was adding roughly $27 per barrel earlier this month"

Capt Bringdown

05-27-2011, 03:24 AM

WikiLeaks: Saudis often warned U.S. about oil speculators (http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-saudis-often-warned.html)

When oil prices hit a record $147 a barrel in July 2008, the Bush administration leaned on Saudi Arabia to pump more crude in hopes that a flood of new crude would drive the price down. The Saudis complied, but not before warning that oil already was plentiful and that Wall Street speculation, not a shortage of oil, was driving up prices.

The Saudis have struck a steady theme for years that something should be done to curb the influence of banks and hedge funds that are speculating on the price of oil, according to diplomatic cables made available to McClatchy by the WikiLeaks website.

The Saudi concerns about speculation have a particular sheen of credibility. Saudi Arabia is the world's largest exporter of oil, serving dozens of clients in addition to the United States. As such, it carefully tracks the trends that drive oil prices, which send it billions of additional dollars with every increase.

A McClatchy investigation earlier this month showed the extent to which financial institutions now influence the price of oil. Until recently, end users of oil — such as airlines, refineries and other consumer of fuel — accounted for about 70 percent of oil trading as they tried to hedge against price fluctuations.

Today, however, speculators who'll never take possession of a barrel of oil account for that 70 percent of oil futures trading, and the volume of speculative trading has grown fivefold.
more... (http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-saudis-often-warned.html)

Enron redux

boutons_deux

05-27-2011, 05:01 AM

"July 2008, the Bush administration leaned on Saudi Arabia to pump more crude in hopes that a flood of new crude would drive the price down"

I remember the Saudis saying they had oil to sell but no buyers, and that speculators were setting the price. ie, easy supply did not drive down prices.

"Speculators can act like a dam on a river, slowing the volume of oil"

What pure self-serving, faith-based bullshit. Speculators never touch the oil, never take delivery. The oil doesn't actually move for them, they only move the price.

greyforest

05-27-2011, 05:30 AM

Enron redux

This is startlingly true...the loophole-ridden legislation Enron exploited has been left unchanged for all these years.

For anyone who doesn't know about Enron, the entire Smartest Guys in the Room is on youtube:
http://www.youtube.com/watch?v=o5clNtt7PgM

boutons_deux

05-27-2011, 05:58 AM

Saudi warnings about speculators in WikiLeaks:

http://www.mcclatchydc.com/2011/05/25/114759/wikileaks-saudis-often-warned.html

Wild Cobra

05-27-2011, 09:10 AM

I remember the Saudis saying they had oil to sell but no buyers, and that speculators were setting the price. ie, easy supply did not drive down prices.

I'd like to see that in full context.

They are a member of OPEC, right?

Do you know what determines how much oil they can sell?

By their rules, they could have way more available oil than OPEC allows them to sell.

Wild Cobra

05-27-2011, 09:24 AM

OK, I read that wikileaks link.

Please notice a few things. It was said speculation causes at least as much rise in oil as supply and demand. I agree to the point that supply and demand affects the immediate price, sold to refineries. Speculation of the future supply and demand dictates the price of crude the spectators are willing to pay, before it makes it to the refineries. That isn't the same as speculators artificially inflating the price.hen the Saudis said they were willing to discount oil, that probably would have been from the market price then. Maybe nobody was willing to pay those prices as speculation light be seeing a downward slope in price. Maybe the quote was an incorrect translation or fabrication since OPEC members can only sell a specific volume in a period of time based on their reserves.

boutons_deux

05-27-2011, 12:11 PM

"Please notice a few things"

iow,

"watch me mindread the Saudis and scrute the inscrutable wikikleaks so that my rigid ideological position that oil price are really just supply and demand and all facts to the contrary are bullshit"

boutons_deux

06-09-2011, 03:34 PM

Oil Market Regulator: Consumers Are Paying A ‘Wall Street Speculative Premium’ For Gas

http://thinkprogress.org/economy/2011/06/09/240754/chilton-wall-street-speculative-premium/

Wild Cobra

06-09-2011, 10:18 PM

Oil Market Regulator: Consumers Are Paying A ‘Wall Street Speculative Premium’ For Gas

http://thinkprogress.org/economy/2011/06/09/240754/chilton-wall-street-speculative-premium/
Wow...

Yes! The futures market is driven by speculation.

Speculation of what you can sell the future for. I think you finally got one right!

Problem is, speculators sometime lose their asses because the market doesn't always pay more than they committed themselves to pay. They wouldn't pay higher prices if they didn't believe the market prices would give them profit.