Fed is investigating possible oil market manipulation

[bronco67]

http://money.cnn.com/2008/05/29/mark...ex.htm?cnn=yes

This is a good read for all those in the "supply and demand" camp. There is no way supply and demand has manifested itself in a just a few months as this huge hike in prices.

While they're at it, they should investigate the Shell station near my house. At $4.47 for regular, they're 20 cents more than the mom and pop place down the street.

[Phoenix]

of course its manipulated..but dont say that...or you will be marginalized as a nutjob

[Socks]

Phoenix is right.

The people in power are 1000x more intelligent than than the rest of us, don't think for a second they aren't doing exactly the right thing all the time!

[eightmotives]

Market manipulation has occurred since the creation of man. Its a part of the economy that has to exist. Its unfortunate that it effects everyone in such a drastic manner.

[arial]

Possible? Of course it's all legit come on people!

[TheDoc]

Many things are screwing with our oil prices. Such as, you can buy oil contracts with little to no money down, and "if you win" you take home big. And if you lose, at least to big, you can file bankruptcy to save your ass - and simply start back over. When people bid up these contracts, it makes the 'demand' appear higher - making all crude prices increase, when no real money/value has actually been added into the system.

[LilBro]

we have over 60 years of oil in the USA.... ask the DOE and Interior Minsitry, even the DOT... tell them DEMS to stop blocking it so we can get it online already... Id like to go back to $1.50 a gallon....

thats 60 years MINIMUM!!! not including shale oil.... www.americansolutions.com/drillnow

[TheDoc]

we have over 60 years of oil in the USA.... ask the DOE and Interior Minsitry, even the DOT... tell them DEMS to stop blocking it so we can get it online already... Id like to go back to $1.50 a gallon....

thats 60 years MINIMUM!!! not including shale oil.... www.americansolutions.com/drillnow

Dems? It's equal all around on people not wanting it to happen and people wanting it to happen - not a single group. The conservative groups have money in mind (saving and earning), not the people. Otherwise, the 'free and very cheap alternative sources' is a way more logical argument, which they ignore and/or bash.

[LilBro]

Dems? It's equal all around on people not wanting it to happen and people wanting it to happen - not a single group. The conservative groups have money in mind (saving and earning), not the people. Otherwise, the 'free and very cheap alternative sources' is a way more logical argument, which they ignore and/or bash.

true but mostly its the DEMS...

we have enough coal to power the US grid for many many years, clean burning coal. And our own oil... we would never need to import.... keep the $$$ in the USA

[Phoenix]

dont turn this into a political thing..that is just a tool of the groups doing it

it is a straight up gangster move

[bronco67]

of course its manipulated..but dont say that...or you will be marginalized as a nutjob

I've been there already...and the funny thing is, I never usually lean towards the side of conspiracy, unless I go from spending 40 buck to fill my tank to 60 in a couple of months.

Something fucking stinks. Gas has been holding close to, or below $3.20 for years. One dollar in a few months indicates much more than simple supply and demand, which should take years to manifest itself.

[TheDoc]

true but mostly its the DEMS...

we have enough coal to power the US grid for many many years, clean burning coal. And our own oil... we would never need to import.... keep the $$$ in the USA

As long as corporations control the coal/oil business, without regulation from the gov, they have every right to buy/sell as they see fit. Even more so, when most the companies aren't really U.S. companies, and our Gov has sold off our Oil rights to these companies.

So the land/oil, isn't even ours to regulate anymore.

If we really wanted to help/save money, or: kill who the rich and powerful are. We have companies on the lower markets that own patents, that can replace entire city power grids, store ac power for later use, and one system replaces the entire power plant forever - and the supply/demand issue is gone, for good. All without coal, oil or gas being used.

[Magnus]

So sick of these Gas stories, yep it's going up, up and up. Supply and demand, supply shortages, bad weather, war, greed, hostage taking, fire at the refinery, China and India want to strop riding bikes and can buy $2500 cars, black fly landing on a refinery etc

I don't care that some countries pays double or triple what we are paying in North America, just like I don't care that Venezuela pays 5 cents a liter.

Welcome to the new normal, we will never see 20,40,60 dollar barrels of oil again.

So what are you gonna do about it? protest, start a strongly worded blog, sell your car, stop driving more than 2K in any direction?

For most people probably nothing, adjust and carry on.

[woj]

Something fucking stinks. Gas has been holding close to, or below $3.20 for years. One dollar in a few months indicates much more than simple supply and demand, which should take years to manifest itself.

This is isn't "supply"/"demand" in a sense one usually thinks of, the price doesn't come from actual supply or demand, but from speculators that buy/sell oil contracts. It's kinda same situation as the real estate bubble, people see prices rising, so they buy, causing the prices to keep rising... until one day it all crashes hard...

[CarlosTheGaucho]

fed is a private owned equity it can't investigate anything to do with money..

[TheDoc]

fed is a private owned equity it can't investigate anything to do with money..

They are investigating fraud, not money.

[ADL Colin]

This is isn't "supply"/"demand" in a sense one usually thinks of, the price doesn't come from actual supply or demand, but from speculators that buy/sell oil contracts. It's kinda same situation as the real estate bubble, people see prices rising, so they buy, causing the prices to keep rising... until one day it all crashes hard...

Exactly. The point isn't supply and demand of oil but rather the demand for oil futures. The demand for oil itself is only marginally higher; increasing a few percent per year. Whether rightly or wrong there has been a huge change in perception about future supply and demand. When you have the well-respected Matthew Simmons and Boone Pickens making the strong "peak oil" statements daily on CNBC and in the the press, well it has an enormous influence on the market - whether we are as close to the peak as they claim or not. Simmons book (2005?) really called into question whether the Saudis are capable of the production increases they claim.

The largest oil companies in the world are not the public and well known Exxon, Conoco, BP etc but rather they are sovereign companies such as Saudi Aramco, Petroleos Mexicanos, Petroleos de Venezuela and China National.

[media]

Sorta reminds me of Enron all over again.. What the fuck is a probe gonna do aside from make us think that things are gonna be handled, when of course we all know they wont...

[CarlosTheGaucho]

So sick of these Gas stories, yep it's going up, up and up. Supply and demand, supply shortages, bad weather, war, greed, hostage taking, fire at the refinery, China and India want to strop riding bikes and can buy $2500 cars, black fly landing on a refinery etc

I don't care that some countries pays double or triple what we are paying in North America, just like I don't care that Venezuela pays 5 cents a liter.

Welcome to the new normal, we will never see 20,40,60 dollar barrels of oil again.

So what are you gonna do about it? protest, start a strongly worded blog, sell your car, stop driving more than 2K in any direction?

For most people probably nothing, adjust and carry on.

Exactly my view, I am paying a double than what's the price in the states and what, I don't feel like I need to whine, I am not going to break down and cry and it won't make me stop driving, cause I love cars.

You drive - you pay, costs are going up, that's how it is and you won't make a shit about it, you're free to get a bike if you don't like it.

[Furious_Male]

Who is going to try and pick a top and start shorting oil? The shorts have failed several times now. I am going to start nibbling at short positions soon. I prefer to wait until we hit $150 a barrel though. It seems that we are headed to that level before the bubble bursts (if it bursts anytime soon).

[DixieDash]

Hopefully the price will go down eventually.

[GregE]

So what are you gonna do about it? protest, start a strongly worded blog, sell your car, stop driving more than 2K in any direction?

Nope.

For most people probably nothing, adjust and carry on.

Well... that, and vote the bums out of office every 4 years (whoever they be) until we get a government smart enough (or lucky enough) to preside over a return to sane prices.

[Snake Doctor]

The big problem really is speculation.

You can buy oil just like you buy gold or stocks, so speculators who think the price will keep going up buy it, and that keeps the price moving up.
It's not supply and demand because there is actually more supply in the market right now than is needed.

If we only allowed people to buy commodities (oil, corn, etc) who were actually going to take delivery of the goods rather than just hold the paper on them, prices would normalize.

[pornguy]

Funny thing is in a garage in Cali I think it was, a guy set fire to ocean water just a few months ago. Where is this work?? Why is it not in every home?? because the owners of the oil companies will pay big to keep it away.

[teomaxxx]

ha, ha, ha, they should start to investigate and blame themselves. Thats what they got when they devaluted currency by their current monetary policy. Now everyone and his gradmma is speculating on further devalution of USD in hard assets like Oil.
Of course there are supply problems too, but when you add to the mix speculation, it makes things only worse.

The most estimates on oil speculation says, that there is around 20-30 bucks premium due speculation on weak dollar. Thats what you get when you have FED trying to bailout its Wallstreet friends, while they dont care much for value of dollar.

The Central Eurobank head told it few weeks ago: "to cut interest rates at this point would be the same as taxing the people to bail out the banks. Cost of extra inflation would be the ultimate sign of moral hazard to save banks."

[teomaxxx]

ha, ha, ha, they should start to investigate and blame themselves. Thats what they got when they devaluted currency by their current monetary policy. Now everyone and his gradmma is speculating on further devalution of USD in hard assets like Oil.
Of course there are supply problems too, but when you add to the mix speculation, it makes things only worse.

The most estimates on oil speculation says, that there is around 20-30 bucks premium due speculation on weak dollar. Thats what you get when you have FED trying to bailout its Wallstreet friends, while they dont care much for value of dollar.

The Central Eurobank head told it few weeks ago: "to cut interest rates at this point would be the same as taxing the people to bail out the banks. Cost of extra inflation would be the ultimate sign of moral hazard to save banks."

chart of FED liquidity additions into system and commodities rise:



both of them correlate. they should blame themselves...

[crockett]

I've been there already...and the funny thing is, I never usually lean towards the side of conspiracy, unless I go from spending 40 buck to fill my tank to 60 in a couple of months.

Something fucking stinks. Gas has been holding close to, or below $3.20 for years. One dollar in a few months indicates much more than simple supply and demand, which should take years to manifest itself.

If you look at the historic gas prices.. Since 2001 (ie the era of Bush and co) the price of gas at the pump has doubled every 3 years. It was on average $1.40/gal when Bush came into office and had been stable for years in the $1/gal range. Now it's almost $4/gal after him being in office for 7 years.. Hell it maybe $4/gal now, for all I know it's been a few weeks since I filled up.

[Drake]

Exactly. The point isn't supply and demand of oil but rather the demand for oil futures. The demand for oil itself is only marginally higher; increasing a few percent per year. Whether rightly or wrong there has been a huge change in perception about future supply and demand. When you have the well-respected Matthew Simmons and Boone Pickens making the strong "peak oil" statements daily on CNBC and in the the press, well it has an enormous influence on the market - whether we are as close to the peak as they claim or not. Simmons book (2005?) really called into question whether the Saudis are capable of the production increases they claim.

The largest oil companies in the world are not the public and well known Exxon, Conoco, BP etc but rather they are sovereign companies such as Saudi Aramco, Petroleos Mexicanos, Petroleos de Venezuela and China National.

Correct, and this is why this investigation isn't worth its salt.

This isn't to say I don't completely hate the way prices keep skyrocketing.

[Barefootsies]

The big problem really is speculation.

You can buy oil just like you buy gold or stocks, so speculators who think the price will keep going up buy it, and that keeps the price moving up.
It's not supply and demand because there is actually more supply in the market right now than is needed.

If we only allowed people to buy commodities (oil, corn, etc) who were actually going to take delivery of the goods rather than just hold the paper on them, prices would normalize.

Fucking exactly.

But many are forgetting the weak dollar. Oil priced in dollars. If the US green back was worth the same as a Euro, we'd be at $80.00 a barrel.

[ADL Colin]

They are also investigating cotton prices.