[Hughj]

http://www.thepeoplesview.net/2011/05/c ... -sues.html

[Novus]

Still grasping at straws I see.

[Daniel_Plainview]

$this->bbcode_second_pass_quote('Hughj', 'h')ttp://www.thepeoplesview.net/2011/05/corporatist-obama-administration-sues.html

[Hughj]

http://money.cnn.com/magazines/fortune/ ... /index.htm

[Pops]

Not so fast. You can't simply dismiss this as cornie fluff. For an analogy: the fact that merchants profiteered by selling fresh eggs to miners for $3 each during the gold rush doesn't disprove the existence of an egg shortage, quite the opposite.

I'm surprised we haven't seen this posted here, at least I haven't. This isn't just some denier fluff, although Hugh meant it as such, this is the CFTC suing people for manipulating an obviously constrained market. I know, the party line is that futures aren't contracts but I showed in another thread that the futures markets are the price discovery vehicle for those contracts so they do have a direct impact on contract prices.

Here from the NYT article:
$this->bbcode_second_pass_quote('', 'T')he suit says that in early 2008 they tried to hoard nearly two-thirds of the available supply of a crucial American market for crude oil, then abruptly dumped it and improperly pocketed $50 million.

[Hughj]

At issue here is a 500 percent rise in 3 months, not 10 years. Over the previous 10 years,
oil prices were flat at about 30 bucks.

Hugh

[vision-master]

$this->bbcode_second_pass_quote('', 'A')t issue here is a 500 percent rise in 3 months, not 10 years.

[Pops]

$this->bbcode_second_pass_quote('Hughj', 'A')t issue here is a 500 percent rise in 3 months, not 10 years. Over the previous 10 years,
oil prices were flat at about 30 bucks.

Hugh

[Hughj]

Does anybody remember the Hunt brothers? (Isn't history wonderful... makes the future so much
more predictable.)

Hugh

[Pops]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('Pops', 'I') know, the party line is that futures aren't contracts but I showed in another thread that the futures markets are the price discovery vehicle for those contracts so they do have a direct impact on contract prices.

[Pops]

$this->bbcode_second_pass_quote('Hughj', '(')Isn't history wonderful... makes the future so much
more predictable.)

Hugh

[Hughj]

In 2008, traders taking delivery of their oil were chartering tankers to sit off-shore, full of
crude, awaiting the imminent price rise as available oil fell. Storage in Cushing was totally
at capacity, yet prices continued to rise to $147 per barrel. Three months later, when there
was no place left to store crude, prices plummetted to 44 bucks. Once again, this is historical
fact, not my opinion. I don't need the commodities regulators to pee on my leg and call it
rain.

Hugh

[kublikhan]

Lets assume for the moment that you are 100% correct Hughj. Speculators pumped up the price of oil to $147, then pushed it back down to $44. I am still curious how coincide this view with the fact that new oil coming on line is coming from increasing expensive places like deep water drilling, tar sands, etc. Pops posted this in your $22 thread yesterday and you ducked it. How do you expect oil to fall to $22 when much of the new oil being drilled needs oil prices substantially higher to be economical? Many of these projects need $70+ oil to keep the pumps working. I don't see how you can claim it's all the fault of speculators and oil is going back to $22 when they need at least $70+ just to be economical.

$this->bbcode_second_pass_quote('Pops', 'A')re you going to address my point that $22 oil can no longer meet demand so more expensive substitutes are required - raising the price of ALL oil to that of the most expensive barrel?

[Hughj]

K - I offer 2008 as evidence of futures trading gone wild. Happening again now to a lesser
extent. Happened in 1990 when it fell to 10 bucks, bankrupting the oldest oil company in
America. OPEC did it in 1973. What oil costs is irrelevant to traders, they just do their
thing and we all pay.

Hugh