[jenko]

Hard to believe a headline like this would appear on a day when crude futures were down $2

All Gulf of Mexico crude prod halted

http://abcnews.go.com/Business/wireStory?id=1153105

[mididoctors]

Plunge protection team=rumor or reality?

fat pdf from sprott ass management

edit: i see pup55 beat me to it

this latest conspiracy thing is really doing the rounds

Boris
London

[mididoctors]

I polled I don't know

btw

Boris
london

[cube]

Are the energy markets "manipulated".......short answer==no. The amount of money that it would take to rig the market would be so huge, trying to "cover it up" would be like trying to hide an elephant in a living room. There are some conspiracy theories that actually do have credibility but this is not one of them.

While the crude oil market may not be "rigged" there certainly is a lot of "inside information" that gets passed along. (which BTW is perfectly legal) For example I was reading this book about trading and there's this story about how one time there was a huge fire that broke out at the offshore oil rigs in the North Sea. All the big dogs passed the info along to their "friends" so they can take up "long" positions. The news media got there 30 minutes later. By the time the "news" got broadcasted on TV to all the "little people" the big dogs already had their commodity futures positions and also their profits "secured".


Believe it or not.

[Concerned]

Markets may well be manipulated.

I can see a market argument for lower oil prices if a Hurricane wipes out more refinery capacity than oil that feeds it then you have a glut of oil. Hence lower prices.

[bobcousins]

Why is that whenever the facts don't exactly fit someone's idea of PO theory, they start calling conspiracy? Replacing intellect with paranoia is not a rational way to react. I suppose the attraction of conspiracy theory is that it is impossible to prove either way, thus removing the need to provide a correlation of theory and reality.

So come on people, if the facts don't fit the theory, don't throw them away - revise the theory. And I don't mean add a conspiracy clause.

Surely everyone with knowledge of markets knows that future events are factored in to the price well before the event. Often you get price falls on "good news". We know that market manipulation goes on - for example Enron, Barings, Sumitomo, but it is impossible to sustain on a general basis.

It is also a mistake to think that traders operate just on a basis of predicting what will happen. What they also do is predict how others will react. Of course everyone is trying to do the same thing. This leads to market moves that seem counter-intuitive.

[richardmmm]

come on it's pretty simple, you have a hole in the ground with oil pouring out. if the price doubles you make a fortune. what are you going to do ?

capitalism is not about what's good for people or what's better for humanity, it's about making as much money as possible and maintaining your position of market domination.

run the price up, make a fortune, run the price back down wipe out the little guys and new innovation.

it's been going on for centuries..........

people questioning why the futures markets move the way they do need to read The Reminisance of a Stock Operator by Edwin LeFevre. Markets do not run on the logic of what the general public or even majority of traders might think. They are fickle and anticpatory. It's a zero sum game and only the minority can make money at it or follow it.

Understanding market prices requires a different kind of logic. The book is the story of Jesse Livermore who became so smart to the markets that he actually had the entire economy in his hands at one point and JP Morgan himself had to ask him to stop shorting stocks because the US economy was about to totally collapse. They blame him for the 1929 crash, but really he was just a smart trader on the right side of the market, who cornered all the fools.

[OilsNotWell]

Thanks for the book tip Richard, I'll check it out.

The big sharks eat the little fish, same as it ever was, same as it ever was...

Speaking of market manipulation, there's also are very interesting tales about Mayer Amschel Bauer and his sons (aka Rotschild..german for 'red shield' which was above his door), such as this one about Nathan who was stationed in London:

$this->bbcode_second_pass_quote('', 'A')s the wealth and power of the Rothschilds grew in size and influence so did their intelligence gathering network. They had their 'agents' strategically located in all the capitals and trading centers of Europe, gathering and developing various types of intelligence. Like most family exploits, it was based on a combination of very hard work and sheer cunning.

Their unique spy system started out when 'the boys' began sending messages to each other through a networh of couriers. Soon it developed into something much more elaborate, effective and far reaching. It was a spy network par excellence. Its stunning speed and effectiveness gave the Rothschilds a clear edge in all their dealings on an international level.

"Rothschild coaches careened down the highways; Rothschild boats set sail across the Channel; Rothschild agents were swift shadows along the streets. They carried cash, securities, letters and news. Above all, news -- the latest exclusive news to be vigorously processed at stock market and commodity bourse.

"And there was no news more precious than the outcome at Waterloo..." (The Rothschilds p. 94).

Upon the battle of Waterloo depended the future of the European continent. If the Grande Armee of Napoleon emerged victorious France would be undisputed master of all she surveyed on the European front. If Napoleon was crushed into submission England would hold the balance of power in Europe and would be in a position to greatly expand its sphere of influence.

Historian John Reeves, a Rothschild partisan, reveals in his book The Rothschilds, Financial Rulers of the Nations, 1887, page 167, that "one cause of his [Nathan's] success was the secrecy with which he shrouded, and the tortuous policy with which he misled those who watched him the keenest."

There were vast fortunes to be made -- and lost -- on the outcome of the Battle of Waterloo. The Stock Exchange in London was at fever pitch as traders awaited news of the outcome of this battle of the giants. If Britain lost, English consuls would plummet to unprecedented depths. If Britain was victorioug, the value of the consul would leap to dizzying new heights.

As the two huge armies closed in for their battle to the death, Nathan Rothschild had his agents working feverishly on both sides of the line to gather the most accurate possible information as the battle proceeded. Additional Rothschild agents were on hand to carry the intelligence bulletins to a Rothschild command post strategically located nearby.

Late on the afternoon of June 15, 1815, a Rothschild representative jumped on board a specially chartered boat and headed out into the channel in a hurried dash for the English coast. In his possession was a top secret report from Rothschild's secret service agents on the progress of the crucial battle. This intelligence data would prove indispensable to Nathan in making some vital decisions.

The special agent was met at Folkstone the following morning at dawn by Nathan Rothschild himself. After quickly scanning the highlights of the report Rothschild was on his way again, speeding towards London and the Stock Exchange.


--------------------------------------------------------------------------------

COUP OF COUPS

--------------------------------------------------------------------------------

Arriving at the Exchange amid frantic speculation on the outcome of the battle, Nathan took up his usual position beside the famous 'Rothschild Pillar.' Without a sign of emotion, without the slightest change of facial expression the stony-faced, flint eyed chief of the House of Rothschild gave a predetermined signal to his agents who were stationed nearby.

Rothschild agents immediately began to dump consuls on the market. As hundred of thousands of dollars worth of consuls poured onto the market their value started to slide. Then they began to plummet.

Nathan continued to lean against 'his' pillar, emotionless, expressionless. He continued to sell, and sell and sell. Consuls kept on falling. Word began to sweep through the Stock Exchange: "Rothschild knows." "Rothschild knows." "Wellington has lost at Waterloo."

The selling turned into a panic as people rushed to unload their 'worthless' consuls or paper money for gold and silver in the hope of retaining at least part of their wealth. Consuls continued their nosedive towards oblivion. After several hours of feverish trading the consul lay in ruins. It was selling for about five cents on the dollar.

Nathan Rothschild, emotionless as ever, still leaned against his pillar. He continued to give subtle signals. But these signals were different. They were so bubtly different that only the highly trained Rothschild agents could detect the change. On the cue from their boss, dozens of Rothschild agents made their way to the order desks around the Exchange and bought every consul in sight for just a 'song'!

A short time later the 'official' news arrived in the British capital. England was now the master of the European scene.

Within seconds the consul skyrocketed to above its original value. As the significance of the British victory began to sink into the public consciousness, the value of consuls rose even higher.

Napoleon had 'met his Waterloo.' Nathan had bought control of the British economy. Overnight, his already vast fortune was multiplied twenty times over.

[fossil_fuel]

lol, great story, not sure if it's true though.

[threadbear]

When large wealthy corporations fail to anticipate increased demand and act on it, by building new refineries, they are manipulating gasoline prices by default, or through malevolent neglect. The idea of simply 'reacting' to market signals, ignores what is particularly germaine to infrastructure of any kind; problems have to be anticipated and corrected BEFORE they occur.

There is a role for responsible govt. here. This would never happen in a truly modern efficient state. The US is run by pirates.

[Barbara]

This is my idea: they've learned from Katrina. Refinery disruption=plenty of oil sitting and waiting to be refined, people craving for gas.
As I did with Katrina (being right ), I predict lower oil prices, higher gas prices.

[fossilnut2]

Sure. By the American consumer. The USA uses 25% of the world's daily oil production but only makes up 6% of the world's population. Oil markets are completely in control of the USA...USE LESS. Supply and Demand.

Just this week there was a 6% dip in SUV sales over last year. No surprise that more consumers are looking at down sizing their vehicles. 10 to 1 if the gas prioces dropped then the sales of larger SUVs and Trucks go up. All within the control of the consumer.

Want to lose weight. Eat less. Want gas prices to drop? Use less.
Instead when prices drop, consumers use more.

[OilsNotWell]

Well, what happened with the very rare NYMEX trading early trading today (which is open to only a rather few large players, investment houses and the like), is that prices went down...ostensibly due to 'less than expected' damage...

Never mind the fact that more refineries went down, more platforms/rigs are probably lost...

In a move that bespeaks of a blatant attempt to a) move in early on any trades with news of the damage of Rita, or mitigate any open positions due to such news or b) manipulate prices in a very thin trading market without correction. In short, it reeks to high heaven. But despite this, the market WILL properly value, it's just that when it does so, instead of being gradual, it'll be sharp and severe and very painful.

Gasoline will be in very short supply. Light/sweet crude as well. Drawing from the SPR is like starting to raid the savings account to pay for living expenses, when you have a potentially terminal illness that you refuse to see a doctor for. Also, NG is in such a crisis that will deepen that a declaration of national emergency would not surprise me in the least.

[cube]

$this->bbcode_second_pass_quote('OilsNotWell', 'W')ell, what happened with the very rare NYMEX trading early trading today........ b) manipulate prices in a very thin trading market without correction.
.............

[BabyPeanut]

$this->bbcode_second_pass_quote('', '[')url=http://tonto.eia.doe.gov/oog/info/gdu/gaspump.html]WHAT WE PAY FOR IN A GALLON OF REGULAR GASOLINE (link)[/url]
Jan-2000 32.1% tax

Aug-2005 17.7% tax.

[fossilnut2]

When I read that markets can be manipulated because 'Dick Cheney is the VP', I give the poster ZERO credibility. My wife and I are both geologists in Calgary. Both heavily involved in the fossil fuel industry. I've never had a phone call from Dick Cheney or anyone else trying to fix prices. Energy producers and traders are an independent bunch of individuals and would tell anyone trying to manipulate them to Go to He!!.

Trying 'to fix' prices on the energy market would be like trying to fix the NFL scores every week. A giant conspiracy of owners, players, fans, etc. Except the conspiracy would even have to be extended external to the USA. I suppose NFL and college scores were fixed in the mid 1970's when Gerald Ford was President because he was an ex-college player who was President ('Dick Cheney is the VP')

[GoIllini]

$this->bbcode_second_pass_quote('TOKYO-EXPAT', 'W')hile you have been "reading some books about the market" I have been an active trader here in Tokyo for the better part of a year and a half and before that I worked for a small brokerage in Boston. It actually would be quite easy for the powers that be to manipulate the oil futures and commodities market. These people have been in bed with one another for the better part of 20-30 years. I mean come on Dick Cheney is the damn VP. Check out his resume. Condi also was a oil industry big wig. They have the ties... the capital and the motive. If the markets go too high it is worse than a terrorist attack.
Yes I grant you the energy futures market is huge, not the biggest but huge. The largest would be FOREX. But I degress..
One thing I believe you forget is this... when manipulation goes on... who is watching the watchers... and what happens when its the watchers doing it.... NOTHING!

JUST BECAUSE IM PARANOID...DOESNT MEAN PEOPLE ARENT WATCHING ME

[pup55]

$this->bbcode_second_pass_quote('', 'I') polled I don't know

[TOKYO-EXPAT]

$this->bbcode_second_pass_quote('', 'A')re the energy markets "manipulated".......short answer==no. The amount of money that it would take to rig the market would be so huge, trying to "cover it up" would be like trying to hide an elephant in a living room. There are some conspiracy theories that actually do have credibility but this is not one of them.

[threadbear]

From Oligopoly Watch:


The big companies formed an oligopoly to the independent gasoline companies that they used to compete to sell excess refining capacity to, using their power to demand higher prices and to restrict their operations.

Notable US oil mergers of the last ten years

* 1997 Ashland Oil combines most assets with Marathon Oil
* 1998 British Petroleum (BP) acquires Amoco
* 1998 Pennzoil merges with Quaker State Oil
* 1999 Exxon and Mobil join to form ExxonMobil
* 2000 British Petroleum (BP) acquires ARCO (Atlantic Richfield)
* 2001 Chevron acquires Texaco to form ChevronTexaco
* 2002 Conoco merges with Phillips
* 2002 Royal Dutch Shell acquires Pennzoil-Quaker State

Note the history of these companies. After the 1911 breakup, Standard Oil of New Jersey was Esso, later Exxon. Standard Oil of New York is the basis for Mobil. Atlantic Oil was part of the breakup (basis of ARCO), Amoco used to be Standard Oil of Indiana. Chevron is the old Socal, Standard Oil of California. And Sohio, Standard Oil of Ohio, became part of BP in 1987,

http://www.oligopolywatch.com/2004/06/12.html

Fossil guy--Being a geologist doesn't give you any advantage in terms of understanding collusion, how it works, or how to spot it. It would be difficult for forensic accountants to determine exactly how prices are being rigged, as the implementation plans are all off the record. For someone living in an engineering or scientific realm where transparency and accuracy of information are vital, it would be difficult to imagine that other aspects of the oil industry are basically, gangsters. Perhaps the company or companies you have worked for are clean, but I wouldn't extrapolate from there that oil is a clean industry, environmentally, or otherwise.