Crude Oil breaks $140
 

Saudi Arabia said they will increase production. Yesterday the oil inventory is holding more than expected. The FED didn't cut interest rates.

What is going with Oil? These spikes have nothing to do with supply and demand.

peak oil :Oh crap

Recent OPEC comments, Libya casually mentioning they may cut production, drop in the stock market, the fed rates staying low... that's just a few.

If the fed rates would have went up, the stock market would have went up, the dollar would have went up, and crude would have likely went down... along with economic growth.

With everyone at the top shrugging their shoulders and passing the buck, the answer is very clear:

Lots of people are making lots of money right now, and like income tax, they'll never give it back.

A commodity as well known as oil shouldn't be swinging 5, 8, or even 10 dollars a day under normal circumstances. Money is pouring into the oil markets and it's driving the price up.

All the articles I read seems to suggest without all the speculators cashing in, oil should be around $100 a barrel based on real supply and demand numbers.

Everytime an oil seikh sneezes Goldman Sachs uses it as an excuse to predict higher prices.

I'm beginning to wonder how much money they got tied up in oil futures.

Man I don't even know any more, it's so hard to say. You can find a vast amount of articles on both sides of the coin.

I personally think speculators have way too much involvement, but to denie the supply and demand argument is kind of silly as well. Production has not increased in years, while demand is steadily rising.

Combination of so many factors.

Has anybody else noticed that most of the key oil producers (Russia, Iran, Venezuela, etc.) all seem to be... hmm... countries that the Western world tends to have "problems" with quite often?

What's with the counter argument that if the US stopped or at least reigned in speculators, that they would just "move to other unregulated markets in the world" taking the money out of the US economy..

I don't get it.. I mean they pushed hard to get this unregulated market in the US in the first place, if they could just move their money to another country back then, why wouldn't they?

Anyone have a clue about this? I think with all the money movement laws, taxes, this and that, companies would have a hard time taking their billions elsewhere, unless they moved their whole company.

There is no market transparency. The CFTC can't even see what they are suppose to be regulating.. it really is a joke.

GS just posted outstanding ER last week. They made money most money as follows :
* betting on oil
* underwriting fees for under-capitalized banks
* reduced taxes

and I bet every other IB, even those with money from FED, are trying to do the same, betting on commodities, since in current market its one of the last places where money can be made on the long side

It's the fucking speculators.. thanks to a un-regulated market..

the problem is Fed isnt here for you, FED is here for its membersbanks.

Now everyone and his gradmamma are speculating in oil on futher dollar debasment.This is what you got, when you have FED trying by low interest rate policy, to bailout wallstreet banks, without any respect to average Joe, while some of those yet to bankrupted banks are trying now to get out of their own mess by playing a commodity boom too..
Nobody is benefiting from current low interest rates except banks.

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."

"Crude is now moving almost reflexively as a sort of "anti-dollar", a currency on steroids with eight times leverage. No matter that the global economy is slowing hard. Bad is good for oil in the topsy-turvy world of commodity funds."
from:
http://www.telegraph.co.uk/money/mai.../ccview109.xml


Of course there supply problems too, but speculation factor is big too as we can see on $5-10 moves in one day, in particular those kind of moves connected to USD/EUR exchange rates...

In addition to supply problems, now you guys in the US got a pay for monetary policy of your institutions and we too as oil simply moves also as currency hedge with huge leverage.[/QUOTE]

W's biggest mistake was not taking all the f'ing oil from the arabs. I long for the days of 1.50 gallon gas

I just saw CNN quoting some arab minister that oil could hit $170 by the end of the summer. Just last week some other or the same arab minister was talking about increasing output to bring the price of a barrel down a bit.

Let it go to $200 a barrel fuck it... more sales will come in! If you guys aren't cashing in now, push it :thumbsup

I bet all of you with your big Hummers and other SUVs are feeling pretty shitty right about now.

Right playas?

lol - how can squeezing consumers through higher commodity prices equate to making more sales?

because people can't afford to go out, so they stay in and surf :winkwink:

Paying for internet porn gets crossed off the list before necessities.

I wish you were right though.

Its going to suck ass when we don't have anymore airlines left.:2 cents:

That's the beeeeeeeeeeautiful thing.

Since deregulation, the 'speculators' can make their claims on shit, drive the prices to the moon, and not be 100% invested in the market. The term eludes me, but it's basically where they have 5% bought on 'faith' and do not have to invest their own money while driving up prices with their 'predictions'.

:disgust

Actually, there is an Indian super refinery that will come online this fall. It's the biggest in the world. It's main customer is the U.S.. It will be refining all grades of crude. So in actuality, THAT will bring prices down.

There is enough supply in the market. There is not enough refining capacity. Since they oil companies in the U.S. are not investing in new one's. It will, again, be some overseas mofo who cashes in.

:disgust

This is fucked up.

http://www.mosler.org/wwwboard/messages/2635.shtml

"A LARGE warehouse in Amsterdam may seem an unusual place to attract the City s top traders and hedge funds. But, in the past few months, Morgan Stanley has been accumulating warehouse space in the Netherlands to store its hottest new property oil.

This and the tankers that have been hired by the investment bank illustrate just how important oil is now becoming in the City of London and Wall Street. Morgan Stanley may be among the most advanced of the new breed of oil speculators, but, over the past year, many banks and hedge funds have joined the black gold rush . With the stock market proving lacklustre, the oil market has been a godsend for the banks,which describe it as the new Nasdaq."

Is this was going on back in 2005 I can only guess what is happening now.

at some point, speculative positions will unwind in a dramatic fashion.

But remember - the market can stay irrational far longer than you or I can stay solvent. The oil market is approaching hysterical levels. Momentum for a spike to top and freefall is increasing.

I've read analysis saying that it will be over $200 next year.

And an instant 1 million extra homes in foreclosure in the states. I think a rate increase is the absolut last resort the Fed would try, and the effect would last a couple of weeks top.