I just wrote the article: So why are gas prices rising?, which explained in detail and then proved that the major reason why the oil price is so high is pure and simple speculation.
Nice to see I was right, and there is more and more proof every day confirming my view.
"America's leading commodities regulator has launched an unprecedented investigation into possible market manipulation in the US crude oil market amid record prices which continue to cripple various parts of the global economy."
Source: telegraph.co.uk.
So, as usual, I was right.
(Damn, now I sound like Rush Limbaugh... shudder!).
CFTC is: The Commodities Future Trading Commission, by the by.
"Walt Lukken, acting chairman of the CFTC, admitted: "In addition to the CFTC's ongoing examination of the role of fundamental economic forces and new investors in the recent commodity market price increases, the agency continues to pursue one of its primary missions - to deter, detect and punish futures market manipulation."
The development adds fuel to the view that the recent surge in oil prices - which hit record highs of $135.14 a barrel last week - has been largely the work of speculators in the energy markets rather than any actual increase in demand."
No shit?
Bonus Material:
globalresearch.ca:
‘Perhaps 60% of today’s oil price is pure speculation’
foxnews.com:
"It’s time to speak the truth. No more disingenuous questioning and wondering. No more exasperated resignation. We know the reason why oil prices are high, and it’s time to admit it and do something about it.
Oil prices are high because of speculation, pure and simple. That’s not an assertion, that’s a fact."
Go figure, me and FOX "news" agree on something.
www.senate.gov, dateline June 27, 2006:
"Senators Carl Levin (D-Mich.) and Norm Coleman (R-Minn.), Ranking Minority Member and Chairman of the Senate Permanent Subcommittee on Investigations, today released a Subcommittee staff report [PDF] finding that market speculation has contributed to rising oil and gasoline prices, and that too many energy trades are occurring without regulatory oversight. The report recommends that Congress enact legislation to close a major loophole in federal oversight of oil and gas traders, slipped into law in 2000 at the behest of Enron and other large energy traders."
I wrote about it in my previous article.
In case you didn't catch it, here it is:
"Congress (should) enact legislation to close a major loophole in federal oversight of oil and gas traders, slipped into law in 2000 at the behest of Enron and other large energy traders."
www.villagevoice.com:
In June 2000, Senator Gramm co-sponsored the Commodity Futures Modernization Act, a measure aimed at deregulating certain kinds of futures trading, but not energy futures. That bill never made it to the floor, and thus quietly died. Six months later, on December 15, Gramm curiously turned up as co-sponsor of a bill with the same name, the Commodity Futures Modernization Act, which did deregulate energy futures and which, without undergoing the usual committee hearings and preliminary votes, was immediately attached as a rider to an 11,000-page appropriations bill. It passed and was signed into law by President Bill Clinton six days later. Few lawmakers had likely perused the rider carefully, if they even knew it was there. And at any rate, Enron had given to the campaigns of over 200 legislators.
This is a major loophole in the law, and allowed wild speculation in the oil futures commodity market.
Senator Gramm did Enron and his other cronies a major favor by slipping this CRIMINAL legislation as a rider into an 11,000-page appropriations bill (which I guarantee you no one has read, then or now).
I realize that many people even when hit with the actual, honest to goodness truth, will STILL refuse to acknowledge it and go back to being ignorant and watching "news" on TV.
Congratulations - you are part of the majority in America.
Sigh.
3 comments:
Please tell me if I'm wrong, but if this scenario works out like I think it does, then the following example would apply:
Speculators get together and buy oil at a set price of $100/barrel in February. The speculators hold alot of the oil back from refineries to drive the price of oil up to $120/barrel in March and April. Then the aforesaid speculators sell the oil they bought for $100/barrel in February at $120 bucks a barrel just a couple of months later.
They can do this with borrowed money and only need 1/16 down to finance the rest.
If this is the case, and large enough "groups" of speculators and investment houses can participate.......and only need a small fraction of the money "down" to buy up 16 times the amount of oil they can actually pay for....................then in concert they could all get together and buy up enormous amounts of oil and "sit on it" for several weeks to drive the price (what refineries and gas companies) are having to pay to get their hands on the natural resource they need to do business. In fact, if they are astute and connected enough, they can call credible journalists and spread all sorts of rumors regarding wars in the Middle East, pipeline bomb threats of terrorists and the like to push prices up further so they can resell their already-bought oil at the highest price possible (as high as they can drive it).
It shows to me (If Im right) that the speculators really dont care about the American economy or average American's well-being at all. High gas prices affects trucking, and oil is used in the manufacture of plastics, rubber, tires and many other things. It really drains the economy to be paying 130 bucks for a barrel of oil instead of the 28 dollars we were paying when Bush took office.
Looking for a silver lining in this cloud, all I can see is that maybe alot of Americans will be buying smaller-more-fuel-efficient cars and deciding that they like them..............so their travel costs in the future (if oil ever comes back down) will be less.
This will even affect real estate as many people will attempt to live close to their jobs even when they dont really want to. Everybody takes gas prices into consideration now. A full tank on my car (29 mpg) cost me sixty bucks. I can remember filling up my Geo back in the nineties for 10 dollars.
Duh, uhh,duh, but i thought that it was those damned Ayyrabs that were hogging all the money from the oil price increases.
Nope, some of the same rabid hyenas that made money off shorting airline stocks in the days before 9/11 are now making tons of the green speculating on oil futures.
Ahh, the free market. Nothing like it, especially when you have a bag man like Gramm doing his master's bidding.
All the threats coming from the Bush/Cheney Junta about bombing Iran isn't helping the market either.
It's getting jittery and that's also part of the increase.
Yes, you were right AG. The time between when they stick the knife in our backs and when they get fingered grows shorter and shorter.
Post a Comment