[mefistofeles]

US Attempts to manipulate the price of oil .

July 23 (Bloomberg) -- Congress may outlaw elements of oil futures trading that lawmakers found distorted demand and contributed to the 69 percent surge in prices in the past year.

U.S. legislators are considering limits on the number of oil contracts an investor can hold and may increase disclosure requirements. Speculators such as Goldman Sachs Group Inc. use the practices to bet on price swings, which may drive up prices, though they have no intention of taking delivery of underlying goods, lawmakers say.

Proposals being debated this week in the Senate would bring prices more in line with demand, proponents say. Excluding the effect of speculation, oil would be around $80 a barrel, 38 percent lower than yesterday's price, according to Jesus Reyes Heroles, the chief executive officer of Petroleos Mexicanos. Critics say restrictions may interfere with the functioning of a $4 trillion annual market for crude oil.

``Americans are being taken advantage of

Talk about being completely and utterly self absorbed. I think Congress is just too much. When the rules of the market work for Americans and create low oil prices they don't interfere but when the game doesn't go according to their liking they actually attempt to manipulate the price of oil by controlling positions in the market. Not to say this really means anything since there is more than one oil market.

Of course the dumb thing is that even if you outlawed "elements" that contribute to high prices someone always finds a way to create a "legal" version of the same product.

These guys are so self absorbed and unable to accept the fact that the US is a major oil importer and must pay the prevailing market rate for oil. I think they risk a true energy disruption with their policies.

The US is a massive oil importer and its unrealistic to think that the world should cater to America's demands on oil pricing. Oil is a valuable commodity and the Americans don't have a birthright to it that supercedes everyone else's right to purchase oil.

I wonder who we will bomb next?

[idiom]

Oil is a valuable commodity and the Americans don't have a birthright to it that supercedes everyone else's right to purchase oil.

Wanna say it to their face?

[jlw61]

Oil is a valuable commodity and the Americans don't have a birthright to it that supercedes everyone else's right to purchase oil.

Wanna say it to their face?

No, he's right, we don't have a birthright to it. However, as long as the US can outbid enough people for the oil it wants, it's going to get it. As long as people are willing to do business with the US, we're going to have the money to outbid most.

Does the US have some problems with it's government and is it somewhat of an unknown right now? Yep, sorry, about that. I voted against W the second time around after seeing what kind of disaster he was. Good news is that come January 20, 2009 he's gone and I really don't think McInsane is going to be replacing him.

[Kingcoal]

It's been all but proven in the last two weeks that there is nothing wrong with the markets. One of the pretty girls on CNBC summed it up better than anyone in a comment where she said something like; "why aren't they investigating speculators when those same speculators push the price down?"

[Concerned]

It's been all but proven in the last two weeks that there is nothing wrong with the markets. One of the pretty girls on CNBC summed it up better than anyone in a comment where she said something like; "why aren't they investigating speculators when those same speculators push the price down?"

How about the put options on the Airlines prior to 9/11??

The speculators are sending a signal to the market that there is a perceived shortage.

Oil sands and shales need high prices to be worth extracting.

If oil prices fall the hard to get oil will stop coming to market and more people will continue excess consumption of less available oil... Shortage anyone?

Yeah it's the speculators, OPEC, Putin, Chavez, Iran premium etc.. but there is plenty of oil right?

[cipi604]

I think the chance for getting a real shortage in the markets for the next 2 years it's minimal. Party on as it lasts!

[Kingcoal]

This is completely normal. The long term trend is higher prices. When I say long term, I mean years. There are a lot of geopolitical events that can happen to plunge prices way down. However, it appears we peaked in '05, so that has to be factored into any speculation.

[jbrovont]

We also need high prices to enourage technological innovation, like more, and more efficient extraction, and alternatives. Artificailly reduccing the price of oil will be a severe setback for us. Not to mention, it will have the same effect as introducing a subsity. Increased demand will lead to shortages, just like every other country lured by the idea of holding the price down. Then we'll have even more problems, and they'll arrive suddenly and without warning (to the masses, and aparently congress).

[CarlosFerreira]

It should be expected. Last week there was that amusing "letter" from airlines stating that speculators were doing it. Those guys have some power, and everyone seems to prefer the conspiracy theory than the PO theory.

In times of trouble, there's always the tendency towards trying to screw up the guys in the middle, perceived as the ones who produce nothing and sell nothing. Killing these guys might break the distribution channel, and be the best way towards scarcity and real price increases. Or is the US govt. ready to take the responsibility in its hands, therefore becoming a socialist state, that controls centrally and provides for the needs of the country?

[Starvid]

Speculators such as Goldman Sachs Group Inc. use the practices to bet on price swings, which may drive up [or down...] prices, though they have no intention of taking delivery of underlying goods, lawmakers say.

[FoxV]

Personally I can't wait to see it happen. This will cause a spectacular crash in the price of oil as stop losses are triggered and hedge funds get their heads handed to them. The $80 target just may get hit.

Gasoline prices will fall drastically. Everyone will cheer, and rush out to fill their SUVs. Ben may even get cover to do another rate cut.

Then the weekly inventory report will come in and they'll be begging for the days when the speculators only drove the prices up by 38%


btw, this will also destroy gold prices as well so be prepared for the buying opportunity of a life time

[TheDude]

CFTC says BS: Speculators Aren’t Driving Up Prices, Report Finds

As Congress debates how to curtail the role of speculators and rein in rising oil prices, a federal task force said Tuesday that it had so far found no evidence that those investors are systematically pushing up the cost of energy.

Instead, in an interim report made public on Tuesday, the task force said that its research “does not support the hypothesis that the activity of these groups is driving prices higher.”

The preliminary study concluded that the rise in oil prices over the last five years was “largely due” to fundamental factors like rapidly rising consumption and sluggish growth in energy supplies worldwide.

The analysis was headed by the Commodity Futures Trading Commission with help from six other agencies, including the Federal Reserve and the Treasury.

[ROCKMAN]

Shhh....quiet Dude. I'm waiting for the sheeple to drive down the price some more on an oil stock I've had my eye on for a while. It's down off its top by 25% now. I've suddenly developed a great fondness for those dirty specualtors.

[skeptik]

Good news is that come January 20, 2009 he's gone and I really don't think McInsane is going to be replacing him.

I hope not. He was talking about the Iraq-Pakistan border yesterday. Obviously he'd already bomb bombed Iran out of existence in his own head.

As a Brit Im sort of stand off on the issue but I'd prefer a US President who isn't losing the plot. It worries me that McCain might be.

[Peleg]

Iraq was not a manipulation of the market?

[CarlosFerreira]

btw, this will also destroy gold prices as well so be prepared for the buying opportunity of a life time

Are you, young man, by any means speculating?

[Fiddlerdave]

Iraq was not a manipulation of the market?

No, just like the sun rising, it was God's will. Manifest Destiny. The Natural Order.

It was the highest order of pure coincidence that the Leaders who have large interests in oil and weapons would see an act of invasion that would highly inflate oil prices was The Only Right Thing To Do.

Really. Trust me. They even prayed over it.

[ColossalContrarian]

The oil speculator sideshow

In other words, from the beginning of the year through the end of May, during which time the price West Texas Intermediate crude rose from $96 to $127, the positions of swap dealers would have benefited more from prices falling than rising. So much for blaming "index speculators" for the price rising.

Verbatim of what Dante has said numerous times.

[MrBill]

Naturally. When the market is in contango then each rollover costs the buyer, while the short rolls at a profit from month to month. That is all a swap is.