Obama Vows Crackdown on Energy Speculators

reply to post by jetxnet


Well, Obama may be playing with our purse strings, but there is talk that the oil bubble is caused by speculators who are raising the price artificially.

First we had the tech bubble: it burst. Then the mortgage bubble: we know what happened there. The speculators should be stopped before the oil bubble burst and wrecks further havoc on the global economy.

(And, I also believe I heard on cable that even the Saudis think speculators are tinkering with the oil prices.)

More info on ATS:
Oil is a bubble and will drop back to $50

Supply and demand issues are a small part, reportedly only a third, of the pressure on prices. Investment banks and hedge funds stockpiling oil to drive the futures market higher, and 30% of the domestic US market for oil regulated by London and Dubai FSA are at the core of the run up in prices.

Senate Hearing Webcast

[edit on 22-6-2008 by Icarus Rising]

Originally posted by Keyhole

And I'm taking a guess you didn't go to the link I posted above where we discussed all this already!

Yes, I went to the link you posted. I am still betting that you have no understanding of the issue at hand, and you're only posting links to stories and blogs that support your position or agenda.

So can you explain what the "Enron Loophole" does that allows speculators to drive up the price of oil? Or can you even tell us how you think the speculators can possibly drive up the price of oil indefinitely?

See, if it were really the speculators driving the price, they would all get wiped out when the bubble burst. It is impossible for a group of people to drive up the price of a commodity against their own long positions with their own money.

What's really foolish about this whole line of reasoning is the idea that the speculators would profit from artificially inflating prices. The only way they would profit is if they could "flip" their investments and sell them to somebody else after the price increased. But if they're selling their positions, then who's buying them? More speculators?

And if the speculators were artificially increasing the price of oil well above where supply and demand would suggest the price should be, then smarter speculators would be coming into the market and shorting the oil contracts. Do you understand what shorting means?

I.e., if the price is inflated, the market will correct itself when other speculators begin shorting oil.

What else is incredibly foolish about this whole scenario is that unlike average joe schmoe investors who only buy and make money when the market goes up, speculators can short a commodity at any time. If it was that easy just to make money by buying a commodity and forcing the price up, then it would be just as easy shorting the commodity and driving the price down. This is what George Soros did with the British pound.

So again, I'm curious if anybody could explain what the "Enron loophole" has to do with anything, or how speculators can be driving the price of oil up beyond it's natural supply/demand equilibrium price.

Originally posted by DontTreadOnMe

First we had the tech bubble: it burst. Then the mortgage bubble: we know what happened there. The speculators should be stopped before the oil bubble burst and wrecks further havoc on the global economy.

Um... wouldn't the oil bubble bursting be a good thing?

Neither the tech bubble nor the mortgage bubble have wreaked havoc on the global economy when they burst. In fact, housing is much more affordable now.

And what do you think will happen if speculators are stopped from buying oil futures? Do you really think Saudi Arabia is going to suddenly drop the price of crude oil is sells directly to China and India because speculators in the U.S. commodities markets aren't allowed to buy futures contracts?

The talk of stopping speculators is just another attempt at imposing some sort of price controls. Did that ever work? Didn't Nixon try this in the '70s?

reply to post by Hal9000


Here is a very informative post I came across here, Not one response as the links are solid -- I watched the cspan video - it is long but this guy made a good point - listen to the president of shell oil -- 40 - or $60 barrel -if speculation was not an issue , case closed, from the billionaire's lips!!!

Originally posted by jamie83

Originally posted by Keyhole

And I'm taking a guess you didn't go to the link I posted above where we discussed all this already!

Yes, I went to the link you posted. I am still betting that you have no understanding of the issue at hand, and you're only posting links to stories and blogs that support your position or agenda.

Check out this post Jamie, the sources are gov,

www.abovetopsecret.com...



Mod Edit, to fix quote tags



[edit on 23-6-2008 by DontTreadOnMe]

Originally posted by jetxnet
Keyhole, is not China's economy booming at an alarming rate, therefore providing more demand from the current Oil supply chain?

Here's a post from the LINK I gave earlier!

I don't understand how, due to China's inreasing demand for oil (due to them giving subsidies to it's poor people) would cause the price of oil to rise. There's plenty of oil to go around, just because they have increased their demand for oil (and the demand is being met), why should this increase the price of oil p/b.

Usually when you buy something in larger quantities, the price goes down.

Shell CEO Says Record Oil Not Due to Shortage

Oil prices at a record high above $135 a barrel are rising due to market sentiment rather than a shortage of supply, Royal Dutch Shell's chief executive said on Thursday.

U.S. crude oil hit an all-time peak on Thursday, climbing to $135.09, lifted by concern about long-term supply and a host of predictions of further rises from influential investment banks and investors.

"What we say and what we see is there are no physical shortages," Shell's Jeroen van der Veer told Reuters television. He runs the world's second-largest fully publicly traded oil firm by market value.

"There are no tankers waiting in the Middle East, there are no cars waiting at gasoline stations because they are out of stock. This has to do with psychology in the markets and you cannot forecast psychology".

His view that there are no shortages chimes with that of other oil producers, such as members of the Organization of the Petroleum Exporting Countries. Others, such as the U.S. government, say supply is tight.

So there IS no shortage of oil due to China's increasing demand, only "speculators" worried about China's increasing demand for more oil.

It is merely speculators fearmongering about China's increasing demand for oil MIGHT cause a FUTURE shortage of oil. That's all I can see.

Maybe I'm still not understanding you correctly?

Keyhole, did not McCain and Bush just advocate for off-shore drilling? Off-shore drilling has been banned for quite some time.

Yup! Bush is an oil man, he wants more drilling and refineries!

This will not bring the gas prices lower until the dollar gets stronger and the unregulated speculating ends!

Please read this Senate Report from 2006 on The Role of the Market Speculation in Rising Oil and Gas Prices, Senate Staff Report, they know the "Enron Loophole" is there!

Keyhole, did not Saudi Arabia, just within the last week, add over 200,000 more barrels of Oil output per day as to stave off potentially further increases in supply strain?

Yup! And what did we have to promise to give them to increase production? They knew that there is no oil shortage, they are just appeasing Bush's pleas, Bush doesn't want to fix the loophole(!), all his oil buddies are making a killing on it!

He wants it to last as long as possible!

Shell CEO, like OPEC, sees no oil shortages now

KUALA LUMPUR, June 2 (Reuters) - Royal Dutch Shell (nyse: RDSA - news - people ) Chief Executive Jeroen van der Veer said on Monday he did not see any shortage of physical oil supplies, echoing the view of many OPEC ministers who say the world market is well-supplied.

Oil prices have risen more than fourfold since 2004 and gained about a third this year, partly on increased fears among investors that producers will struggle to produce enough oil to meet demand in a decade's time.

"There are no physical shortages in the world. We don't have ships waiting in the Middle East, no people queuing up for gasoline," van der Veer told reporters in the Malaysian capital, where he was briefing on Shell's Asian business plan.

"From a stocks point of view the whole value chain works well... It (the price) has a lot to do with psychology."

Keyhole, does the world Oil problem come down to just a single loophole?

The problem is the dollar which is worth half of what it used to be worth, so the price of oil doubled right there! And then there are the speculators who are doing all the fear mongering that you have bought into! They are the ones convincing people that their is or is going to be an oil shortage due to China!

But, when you investigate it a little bit, that there is NO oil shortage!

All the tankers are cruising.
All the vehicles have gas.
All the gas stations have gas.
The US only just stopped dumping the excess oil that is imported into the US oil reserves. (By the way, they're almost full)

There is no oil crisis, the supply is meeting the demand!

Every country is getting however much it needs!

If you don't believe it, FINE!

Originally posted by jamie83

you're only posting links to stories and blogs that support your position or agenda.

I've yet to see any of your sources that say that speculators are NOT causing any of the increase in gas prices, or anything else to back your view or agenda! Are you a speculator? Are you just throwing around some dis-information?

Here's a bunch of articles on the oil speculation!

Senate committee tackles oil prices
Germany in call for ban on oil speculation
Oil and Speculation
Can't we just stop the oil speculators?
The Danger of Speculation
Speculation—but Not Manipulation
The Role of the Market Speculation in Rising Oil and Gas Prices

I've answered these questions and more in the other thread I posted the link for, go there and read it, and follow all the links!

I'm done!

[edit on 6/23/2008 by Keyhole]

IN the MEDIA It is a Taboo topic to discuss the Big investment banks in the U.S and Europe betting heavily on Oil and Food futures. (perhaps they are looking to repair balance sheets after losing Massively in housing debacle?) umm....................................bueller ... Goldman Sachs and Morgan Stanley have been revealed to be the two largest players in the commodity market!

People shouldn't shake their heads at uncomfortable truths or stare apathetically as they are slow cooked like a frog in a pot.

The Global financial institutions have undermined our (and many other govt's past) morals and now compromised politicians, a compromised media and central bankers that know who butters their bread are taking everyone on a ride that GAURANTEES a lower standard of living for the majority of american's and most other's in the world.

Their is a anti oil speculation bill in congress right now that may work if we have enough congressmen that are not compromised to pass this, mind you a similiar bill in the parliment would need to be passed to regulate I.C.E futures trading in Europe and then poof their would be a rush for the exits. However a Food speculation bill must be attached because other wise the money would just flow from oil to food because big investment banks in the world are desperate to repair their balance sheets from the Home mortgage mess.

We need a INFORMED and ACTIVE public to show an arrogant financial elite that the people of this country still have the will and means to engage positive change for our futures, we can't wait and naively hope for our compromised secretary of treasury Hank paulson (who used to be head of GoldMan Sachs to do something about this) we can't wait on central bankers (that no who butters their bread) in the FED or ECB to stop providing the accomodative intrest rates that keep the dollar low/ euro high so global investment banks can recoup their mortgage losses in oil and food futures. These banks are greedy yes but unless we the people use our knowledge and means to do something about it we are responsible as well.

reply to post by Keyhole


Price of Oil over 10 Years...Who's fooling Whom?

judicial-inc.biz...

You Control Oil And You Are King !

You can control diamond, gold, lumber, etc., but people
don't have to buy it. Oil is a stranglehold commodity

judicial-inc.biz...

reply to post by Hal9000


It is a combination of all the above and speculation is a large part of it. Investors are getting out of real estate and the stock market and driving up the prices. The commodity market should be limited to end users of the products that are being sold. Remove the damn speculators and let the free market work. Speculation is not supply and demand because speculators do not ever buy the actual product.

[edit on 24-6-2008 by LickDaCat]

reply to post by LickDaCat

Yeah, it's complicated but I think some speculators are just following the trend of rising oil prices and making it worse.

Here is a new article that came out today about it.

Gas could fall to $2 if Congress acts, analysts say

From the thread:

Gas Could Fall To $2 Per Gallon If Congress Acts On Speculators: Analysts

It would seem that some of those that were saying that speculators were not part of the rise in gas prices were "speculating" themselves.

GREED, GREED, GREED, GREED!!!!!
That seems to be what's ruining our economy. First the Wall Street bigwigs saw an opportunity to make a fortune by driving up the NASDAQ artificially. Then it crashed, and all of the common people who invested in it lost their butts. Then it was the housing market. It crashed. Now the commodities. We need the SEC to do its job by OVERSEEING what's going on on wall st. Not just sitting on their hands.
A capitalist system can only work with oversight and regulations in place. We have seen what happens when they remove oversight over the last 7 years and before that in the 80's.

I know a low dollar has something to do with the commodities market (oil, gas, gold, silver, copper,etc...), but the rampant speculation by greedy corporations is destroying our economy!!
grrrrrrr

All I know is : I would crackdown on the Idiots who would believe what anyone would "speculate" what other people said about any market, good or bad, rather than research the market themselves, screw the Chicken Littles thats why theres chlorine in the gene pool lol

A true Politician at work. As President he will fix the Enron Loophole. Is Obama SPECULATING on this or will he truly close the loophole as President? Who the hell is he trying to fool? He has been a US Senator for how long? If he didn't do it as Senator what makes you think he will do it as President?
He is still a US Senator. Why not pass a bill now?

Sorry folks. I won't close the loophole until January. I got to make sure that the speculators have enough time to make a generous profit off the American people.

[edit on 19-7-2008 by jam321]

has this gotten much media coverage

i would bet CNN cnbc and all the other channels financed by the big financial sector would not mention this for more than 8 seconds.

and building supply will not get TRADERS to move much, this is a dollar hedge, supply demand are about third on the list for reasons the price of oil moves . and that is because supply news is usually not to impactful in terms of supply %.

When the European Central bank show's a will to lower rates OR the fed actually looks to raise rates, the dollar/Euro exchange will reverse course and commodity's priced in dollar will fall as speculators flee, i would like to see the face of all the tools yelling supply demand when the price of oil drops 40 $ , they will probably just mumble ....duh the american economy slowed ...and lower demand here had a greater impact than we thought...but see it's still supply /demand.

BTW, the REPUBLICANS BLOCKED OIL DRILLING IN ALASKA AND OFF SHORE!

No kidding.
www.abovetopsecret.com...

The GOP WANTS high gas prices. Why? High oil and gas prices means more money for the Oil Companies that own the GOP. In fact the Oil COmpanies have AGAIN RECORDED RECORD PROFITS!

news.yahoo.com...

reply to post by Keyhole


Are you people really this stupid on here?

Obama got campaign contributions from big oil, Fanny Mae and Freddie Mac. He's not the new Messiah you think he is!!!

His plan is simple, bigger Government, more taxation.

Go ahead and vote for Obama, you will get the Change he's for...

The Change will be what is left in your pockets once his new tax plan goes into effect!

I have news for you all, Barrak Hussein Obama is nothing more then a Communist wearing a Democrat label. Hillary Clinton looked good comepared to him and she's a card carrying member of the American Socialist Party.

Do some research before you vote for your candidate of choice.

Granted neither is that good, choose the less of the to Evil's.

Hope and Change is exactly what Adolph Hilter brought for Germany in 1933. Read his speeches, or listen to them!

GOOD GOD - AMERIKA - Karl Marx would be Proud of the Democratic Party.

VDOG.45

NOBAMA '08