World’s Commodity Futures Markets MUST Be Closed At Once!

Like it or not, when something no longer works, no longer serves the greater good or need, you REPLACE it. WE ARE SHOOTING OURSELVES IN THE FOOT.

(Reuters) - Oil prices pulled back sharply from a record above $135 a barrel on Thursday as dealers took profits from a dazzling rally and a recovering U.S. dollar dampened commodities markets. U.S. crude settled down $2.36 at $130.81 a barrel after jumping earlier in the session to a record $135.09. London Brent crude fell $2.19, to $130.51, after touching a peak of $135.14.

"Some people had set a target of $135 as part of their investment strategy and once that price was achieved, have started taking some profits. Dealers also noted selling across other commodities markets as the dollar recovered on a drop in U.S. jobless claims. The pullback came after crude rallied more than a third since the start of the year, driven by worries about tight stocks of refined products in the near term and mounting global demand over the longer term. "The combination of increasing demand and constricted supply will continue to keep oil prices strong," Robin Batchelor, manager of BlackRock's BGF World Energy fund, said in a research note.

Oil has risen sixfold since 2002, propelled by rising consumption in China and other developing countries. Concerns about long-term supply tightness have recently pushed prices for future delivery even higher than prompt contracts. December 2016 U.S. crude reached $145.60 a barrel, making it the loftiest contract on the futures curve.

Oil prices surged on Wednesday after U.S. weekly data showed crude stocks declined by 5.4 million barrels. OPEC Secretary-General Abdullah al-Badri said Thursday the group can do nothing to lower oil prices, and called the oil market "crazy." The United States has repeatedly called on the Organization of the Petroleum Exporting Countries (OPEC) to boost its output to try to calm markets, but the group has said no increase is needed. uk.news.yahoo.com...

The NYSE has a rule that should the DJIA fall 500 points, the market is “recessed” or closed until the next day. This is to help stem the “feeding frenzy” mob mentality that causes frenetic buying and selling decisions which feed on themselves!

The two most essential commodities for the human race - oil and food - have been deposited into the hands of a few 1000 people around the globe. We cannot allow this idiocy to continue. Millions of people may starve to death before this year ends. Inflation can wreck many people who live on fixed incomes. Small businesses could be driven out because they cannot finance the price increases.

OK, you say. Pretend we're out of ammo. What do you put in the place of those bastions of unregulated economic marauders? The sycophant minions of the R&Fs who glorify themselves as traders! How about ‘TRAITORS" to the human race?

First, the Big 6 oil companies are large enough, rich enough and powerful enough to deal directly with the oil producing countries. ExxonMobil can buy oil wherever it chooses. Oil producers have nothing if they cannot ship, refine and retail their crude oil. It is a symbiotic relationship and the FUTURES MARKET serves NO useful purpose, IMO.

Next, the same situation obtains in the case of food. Food is obviously more immediately essential than oil but oil is not far behind. One person in 6 on this planet is facing serious malnutrition and even death as prices rise without justification. The Christian Children’s Fund has warned us for years that 27,000 children DIE every day from starvation and diseases exacerbated by malnutrition. We cannot continue to sit idly by while

1) mutual funds,
2) hedge funds,
3) pension funds,
4) sovereign wealth funds, and
5) rich people from everywhere

drive the price of food beyond the ability of 1,000,000,000 people to stay alive!

Conclusion. A few all too-wise market manipulators aided by weak minded and ideologically driven political collaborators have captured those markets and are pushing us to the wall! There is no justification for the sharp rise in oil prices, topping $135 today. Nor for food prices like rice that has doubled in the past 6 weeks. Like so many things that once served a useful purpose, futures markets are passe. What excuses once tended to justify gambling on the future - but now a lottery with life and death consequences - is clearly OUT of control. Commodity future markets do not serve a useful social purpose any longer. We cannot afford the luxury anymore!

[edit on 05/05/2008 by donwhite]

I agree with you.

The price of gas is no longer determined by supply & demand, the price of gas is more or less set by crude oil speculators thanks to Congress allowing Enron to pressure them into allowing UNREGULATED OTC electronic exchanges in the US, and then Bush & Co. opened the door for the speculators even wider by allowing these unregulated exchanges to also be made in the the ICE Futures exchange in London, which then allowed speculators to manipulate the price of crude oil globally!

This is a very informative article and worth reading.
‘Perhaps 60% of Today’s Oil Price is Pure Speculation’

“Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC, including ongoing monitoring to detect and prevent price manipulation or fraud. In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. Because of their similarity to futures contracts they are often called “futures look-alikes.”

The only practical difference between futures look-alike contracts and futures contracts is that the look-alikes are traded in unregulated markets whereas futures are traded on regulated exchanges. The trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress.
The impact on market oversight has been substantial.

*****SKIP*****

Then, apparently to make sure the way was opened really wide to potential market oil price manipulation, in January 2006, the Bush Administration’s CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London – called “ICE Futures.”

Previously, the ICE Futures exchange in London had traded only in European energy commodities – Brent crude oil and United Kingdom natural gas. As a United Kingdom futures market, the ICE Futures exchange is regulated solely by the UK Financial Services Authority. In 1999, the London exchange obtained the CFTC’s permission to install computer terminals in the United States to permit traders in New York and other US cities to trade European energy commodities through the ICE exchange.

*****SKIP*****

A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. Keep in mind that ICE Futures in London is owned and controlled by a USA company based in Atlanta Georgia.

In January 2006 when the CFTC allowed the ICE Futures the gaping exception, oil prices were trading in the range of $59-60 a barrel. Today some two years later we see prices tapping $120 and trend upwards. This is not an OPEC problem, it is a US Government regulatory problem of malign neglect.

By not requiring the ICE to file daily reports of large trades of energy commodities, it is not able to detect and deter price manipulation.

I started a thread on this HERE

Closing the Futures Market is one way to fix the price of oil, another way would be for Congress to fix their idiotic mistake and make the electronic exchanges regulated again.

[edit on 5/24/2008 by Keyhole]

Originally posted by donwhite
Commodity future markets do not serve a useful social purpose any longer. We cannot afford the luxury anymore!

It appears like two countries feel the same way!

Germany in Call for Ban on Oil Speculation

German leaders are to propose a worldwide ban on oil trading by speculators, blaming the latest spike in crude prices on manipulation by hedge funds.

It is the most drastic proposal to date amid escalating calls from Europe, the US and Asia for controls on market forces, underscoring the profound shift in the political climate since the credit crunch began. India has already suspended futures trading of five commodities.

Uwe Beckmeyer, transport chief for Germany's Social Democrats, said his party would call for joint measures by the G8 powers to prohibit leveraged trading on energy contracts. "It's an extreme step but it has to be done," he told the Berlin media.

Do you think that MAYBE the German and India governments read your thread here on ATS and you persuaded them to do this?

No?

I'll give you the credit anyway, I heard it from you before they decided to do this.

This is a step in the right direction though to start getting a handle on the oil prices and start getting them back down to a price that people can afford.

I guess we'll just have to see if our greedy politicians will do the right thing and follow suit.

Lobbyists will be fighting this tooth and nail if the proposal comes up in Congress!

[edit on 6/4/2008 by Keyhole]