Official evidence that oil prices are being manipulated

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Re: Official evidence that oil prices are being manipulated

Postby Bradley Walker » Sun Nov 09, 2008 6:48 am

It is under $2 here now in DFW.
"The reasonable man adapts himself to his environment. The unreasonable man adapts his environment to himself, therefore all progress is made by unreasonable men."
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Re: Official evidence that oil prices are being manipulated

Postby Bradley Walker » Wed Dec 17, 2008 11:41 am

OPEC Was Right About Oil Prices. Now What?

http://www.energytribune.com/articles.cfm?aid=1081

From the article:


Back in June, I wrote a piece for The American in which I argued that oil prices were being driven higher by the immutable law of supply and demand. Today, with prices plunging to near $40 instead of the $145 level seen in mid-July, it’s abundantly obvious that speculators were a key driver, probably the main driver, of the surge in oil prices that occurred between late 2007 and July.

So, to be clear, I was wrong. The leaders of OPEC were right. So, too, was my pal, Ed Wallace. In May, Wallace, a savvy journalist from Fort Worth who writes for the Fort Worth Star-Telegram and Business Week, published several articles which he showed how the unregulated futures market was being used by speculators to push prices upward.

Of course, it’s not politically correct to give OPEC credit for anything. But last summer, the leaders of OPEC were united in their pronouncements that there was no reason for oil prices to be as high as they were. Their claims were met with widespread scoffing. The response from the International Energy Agency, as well as some of the biggest oil companies in the world – BP, Repsol, and Shell among them – was that the high prices were being caused by supply and demand. On June 30, during the World Petroleum Congress in Madrid, BP chief Tony Hayward, when asked why oil prices were shooting upward, replied, “It’s about fundamentals. Demand is outstripping new supply.” He went on, saying that “`Investors’ is a better word than ‘speculators.’ They believe price will go up based on fundamentals of demand and supply.”



One of the key speculators responsible for this summer’s price rise was Tulsa-based SemGroup, a midstream company that began to trade big positions in the crude market. Recall that oil futures prices peaked on July 14 at $145.16 per barrel. On July 15, SemGroup was forced to liquidate a huge number of oil futures contracts at an enormous loss. On July 22, SemGroup filed for bankruptcy. And prices for both oil and natural gas have been on a steady decline ever since.


The whole world was screwed...
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Re: Official evidence that oil prices are being manipulated

Postby stoneman » Wed Dec 17, 2008 10:16 pm

Didn't OPEC vote to lower output rates today? A record level cut back I think. That oughta bring the prices back up. We are all screwed, aren't we? :(
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Re: Official evidence that oil prices are being manipulated

Postby Bradley Walker » Sat Mar 28, 2009 2:24 pm

Did Goldman Goose Oil?
http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html?feed=rss_business

How Goldman Sachs was at the center of the oil trading fiasco that bankrupted pipeline giant Semgroup.

When oil prices spiked last summer to $147 a barrel, the biggest corporate casualty was oil pipeline giant Semgroup Holdings, a $14 billion (sales) private firm in Tulsa, Okla. It had racked up $2.4 billion in trading losses betting that oil prices would go down, including $290 million in accounts personally managed by then chief executive Thomas Kivisto. Its short positions amounted to the equivalent of 20% of the nation's crude oil inventories. With the credit crunch eliminating any hope of meeting a $500 million margin call, Semgroup filed for bankruptcy on July 22.

But now some of the people involved in cleaning up the financial mess are suggesting that Semgroup's collapse was more than just bad judgment and worse timing. There is evidence of a malevolent hand at work: oil price manipulation by traders orchestrating a short squeeze to push up the price of West Texas Intermediate crude to the point that it would generate fatal losses in Semgroup's accounts.

"What transpired at Semgroup was no less than a $500 billion fraud on the people of the world," says John Catsimatidis, the billionaire grocer turned oil refiner who is attempting to reorganize Semgroup in bankruptcy court. The $500 billion is how much the world would have overpaid for crude had a successful scam pushed up oil prices by $50 a barrel for 100 days.

What's the evidence of this? Much is circumstantial. Proving oil-trading manipulation is difficult. But numerous people familiar with the events insist that Citibank, Merrill Lynch and especially Goldman Sachs had knowledge about Semgroup's trading positions from their vetting of an ill-fated $1.5 billion private placement deal last spring. "Nothing's been proven, but if somebody has your book and knows every trade, it would not be difficult to bet against that book and put the company into a tremendous liquidity squeeze," says John Tucker, who is representing Kivisto.

What's known for sure is that Goldman Sachs, through J. Aron & Co., its commodities trading arm, was in prime position to use such data--and profited handsomely from Semgroup's fall. J. Aron was Semgroup's biggest counterparty, trading both physical oil flowing through pipelines and paper oil, in the form of options and futures.

When crude oil peaked in July, Semgroup ran out of cash to meet margin requirements on options contracts it had with Aron, contracts on which it had paper losses of $350 million. Desperate to survive, Semgroup asked Aron to pony up $430 million it owed on physical oil. Aron said no, declared Semgroup in default on its contracts and demanded immediate payment of losses.

Some answers may emerge in late March when former FBI director Louis Freeh releases a report on the trading surrounding Semgroup's demise. He was hired by Semgroup and given subpoena power by the bankruptcy court judge in Delaware. Meanwhile the Securities & Exchange Commission is investigating, and lawyers involved in the bankruptcy say that Manhattan District Attorney Robert Morgenthau's office is looking into the actions of New York firms in the collapse. His office declines to comment
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Re: Official evidence that oil prices are being manipulated

Postby sunspot » Sun Mar 29, 2009 1:34 pm

Hey Brad, have you read " The Creature from Jekyll Island" by G. Edward Griffin? I haven't, but I heard it deals with the centralized banking and how it got started in the U.S.
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Re: Official evidence that oil prices are being manipulated

Postby stoneman » Sun Mar 29, 2009 7:01 pm

Have you guys seen the "movie" The Obama Deception? It's on YouTube...and downloadable a couple other places (I forget where, but if anyone wants a link I'll dig it up). Anyway, the name makes it sound like it's going to be a slam Obama thing, but in reality, it is about the central banking, and how BOTH sides of the aisle are involved...I'm not sure I buy it all, but there sure is some stuff that makes one wonder.
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Re: Official evidence that oil prices are being manipulated

Postby Bradley Walker » Thu May 21, 2009 9:02 pm

Are Wall Street speculators driving up gasoline prices?
http://www.mcclatchydc.com/economy/story/68552.html

WASHINGTON — Oil and gasoline prices are rising fast as Memorial Day weekend approaches, but not because supplies are tight or demand is high.

U.S. crude-oil inventories are at their highest levels in almost two decades, and demand has fallen to a 10-year low, but crude oil prices have climbed more than 70 percent since mid-January to a six-month high of $62.04 on Wednesday.

Meanwhile, although refiners are operating at less than 85 percent of capacity, which leaves them plenty of room to churn out more gasoline if demand rises during the summer driving season, the price of gasoline at the pump has climbed 28 cents a gallon from a month earlier to $2.33.

This time, Wall Street speculators — some of them recipients of billions of dollars in taxpayers' bailout money — may be to blame.


What they don't realize is because we don't have position limits, the money they put in is driving up the price" for oil and other commodities, he said.

Contracts for future deliveries of oil and other commodities are traded on the New York Mercantile Exchange, and the futures market for oil has position limits that restrict how much of the market big speculators can control.

However, big Wall Street banks are exempt from these restrictions, and there also are no such limits in derivatives markets. These vast unregulated markets involve private contracts between swaps dealers — usually big Wall Street banks — and large investors. These dark markets, also called over-the-counter markets, are thought to be 10 times larger than the futures market, and they have no position limits and no regulation.

"We were in essence operating with a blindfold on for those over-the-counter markets that we couldn't see," Michael Dunn, the acting chairman of the Commodity Futures Trading Commission, acknowledged last week during a news conference to announce proposed new regulation of derivatives markets.

A stream of financial deregulation under the Clinton administration, culminating in the Commodity Futures Modernization Act of 2000, led to a global race away from regulation.

"The Modernization Act specifically said we were not going to look at those; we weren't going to regulate them. Times have changed, and now we think it is time for us to look at them," Dunn said.
"The reasonable man adapts himself to his environment. The unreasonable man adapts his environment to himself, therefore all progress is made by unreasonable men."
-George Bernard Shaw
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Re: Official evidence that oil prices are being manipulated

Postby Bradley Walker » Thu Nov 12, 2009 7:55 am

The Global Oil Scam: 50 Times Bigger than Madoff

http://seekingalpha.com/article/172797-the-global-oil-scam-50-times-bigger-than-madoff?source=feed

$2.5 Trillion - That’s the size of the global oil scam.

It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs). That’s right - $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.
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Re: Official evidence that oil prices are being manipulated

Postby stoneman » Thu Nov 12, 2009 10:27 am

Wait, I thought we were all going to get free gas once Obuma got elected? :lol: I'm still paying too much for gas, AND I'm still required to pay my mortgage...if I had voted for him, I'd be angry. 8)
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Re: Official evidence that oil prices are being manipulated

Postby chiggins » Thu Nov 12, 2009 10:51 am

stoneman wrote:I'm still paying too much for gas


Compared to what?
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Re: Official evidence that oil prices are being manipulated

Postby Roy » Thu Nov 12, 2009 5:32 pm

chiggins wrote:
stoneman wrote:I'm still paying too much for gas


Compared to what?



10 years ago a gallon could be had for less than a dollar. Wouldn't that be nice :shock:
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Re: Official evidence that oil prices are being manipulated

Postby chiggins » Thu Nov 12, 2009 5:39 pm

Roy wrote:10 years ago a gallon could be had for less than a dollar. Wouldn't that be nice :shock:


We still haven't caught up to what they were paying anywhere in Europe in 1999, and we're paying less than half what they are now despite the relative strength of the euro. Well, at least at the pump...
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Re: Official evidence that oil prices are being manipulated

Postby stoneman » Thu Nov 12, 2009 8:33 pm

Less than a buck a gallon for premium in Venezuala. :roll:
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