[Jack]

$this->bbcode_second_pass_quote('JohnDenver', 'C')omplete crock of shit. You don't understand how the world oil market functions.

[Micki]

$this->bbcode_second_pass_quote('', 'S')o you think a govt who will check the heels of my shoes at the airport, can pick through the minutia about my tax situation, can surveil me picking my nose from a satellite several miles up in the sky, should they choose, can't develop IT systems and reregulate to prevent a leviathon like Sachs from breaking the law, by trying to do an end run around it?

[Jack]

$this->bbcode_second_pass_quote('JohnDenver', 'T')hat doesn't affect my point in the slightest, however. The current total open interest on NYMEX light crude is about 1.4 million contracts. Since the margin requirement for one contract is about $7000, all of the light crude contracts on the NYMEX can be controlled for about $9 billion. For hedge funds, that is pocket change.

That's why it's very easy for hedge funds and other speculators to jack up the price of oil and other commodities.

[smallpoxgirl]

$this->bbcode_second_pass_quote('threadbear', 'Y')ou will be wearing mismatched socks, a tinfoil hat and trying to bend spoons with your mind, shortly.

[Plantagenet]

$this->bbcode_second_pass_quote('threadbear', '
')The only thing that has been missing when it comes to reigning in corporate excess and speculation, is political will.

[JohnDenver]

$this->bbcode_second_pass_quote('Jack', '')$this->bbcode_second_pass_quote('JohnDenver', 'T')hat doesn't affect my point in the slightest, however. The current total open interest on NYMEX light crude is about 1.4 million contracts. Since the margin requirement for one contract is about $7000, all of the light crude contracts on the NYMEX can be controlled for about $9 billion. For hedge funds, that is pocket change.

That's why it's very easy for hedge funds and other speculators to jack up the price of oil and other commodities.

[Micki]

$this->bbcode_second_pass_quote('', 'N')o, because such attempts at manipulation are illegal, and policed on the NYMEX by the CFTC.

[jato]

Prices need to go high enough to destroy demand. Otherwise the world would experience significant oil shortages when we slide down the slope of oil depletion.

Artificially lower oil prices = less incentive to find and produce oil = steeper oil production curve post peak.

[cube]

$this->bbcode_second_pass_quote('JohnDenver', '.')..
Complete crock of shit. You don't understand how the world oil market functions. The price of oil in contracts throughout the world is set by adding a premium or discount to the price of crude on the NYMEX. The function of the futures markets is "price discovery". As of today, open interest on the NYMEX for light sweet crude is 300,000 contracts. Each contract is for 1000 barrels, and thus is worth about $124,000. Current margin requirements are about $7000 per contract, so the amount of money controlling the NYMEX light crude market is about $2.1 billion. That's a spit in the bucket for hedge funds, and shows why oil prices are so easily manipulated/buffeted by large speculators.
...

[Jack]

$this->bbcode_second_pass_quote('JohnDenver', 'N')o, because such attempts at manipulation are illegal, and policed on the NYMEX by the CFTC.

[jato]

JohnDenver will never get his Space Mirror Economy unless the Gubermint channels oil money into space elevators and robot moon miners.

[TheDude]

$this->bbcode_second_pass_quote('Micki', '.')...Dang, why isn't that graph working? Must be protected from hotlinking.

[JohnDenver]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('JohnDenver', '.')..
Complete crock of shit. You don't understand how the world oil market functions. The price of oil in contracts throughout the world is set by adding a premium or discount to the price of crude on the NYMEX. The function of the futures markets is "price discovery". As of today, open interest on the NYMEX for light sweet crude is 300,000 contracts. Each contract is for 1000 barrels, and thus is worth about $124,000. Current margin requirements are about $7000 per contract, so the amount of money controlling the NYMEX light crude market is about $2.1 billion. That's a spit in the bucket for hedge funds, and shows why oil prices are so easily manipulated/buffeted by large speculators.
...

[Jack]

$this->bbcode_second_pass_quote('JohnDenver', 'T')he bottom line is that Jack's position that hedge fund operators can't influence oil prices is a crock of shit, as I said. The NYMEX oil contract is controlled by a very small amount of money, and the NYMEX price governs prices because the NYMEX is used as a benchmark in contracts throughout the world.

[cube]

to: JohnDenver

That's not what I meant. Speculators do NOT control the oil market. It's a zero-sum game.
Everytime a speculator makes a buck some other speculator must lose the same amount.
Regardless of whether oil goes up or down in price
profits - loss == zero always

[JohnDenver]

$this->bbcode_second_pass_quote('Jack', '')$this->bbcode_second_pass_quote('JohnDenver', 'N')o, because such attempts at manipulation are illegal, and policed on the NYMEX by the CFTC.

[dinopello]

I run into this argument all the time about the speculators. The price of oil has been on a steady, more or less constant rise since 2003 (the only "sustained" drop was 6 months at the beginning of '06). I can see how speculator exuberance can make the short-term slope of that increase for brief periods (followed by a dip or correction) but I don't believe a speculator can cause the sustained increase. Unlike gold or silver, you have to take delivery of and use the oil in a fairly short period of time. Is anyone here arguing that the 5 year steady increase is due to speculation ?

BTW, I don't pretend to know much about this type of commodity market/investing. My rail stocks have been doing gangbusters though and I believe I understand the factors behind that. As long as the economy doesn't completely collapse...

[cube]

Like I said before the ridiculousness on this forum knows no limits.

If you want to see all hell break loose start imposing capital controls. That's what you're advocating JD.

History has made it very clear, there is no better "signal" of a collapsing society.

[TheDude]

I'll stick with boring old supply constraint.







Passes the sniff test, survives Occam's razor. As Freddy points out the bulk of the volume is in long-term contracts.

History and Analysis - Crude Oil Prices

[threadbear]

$this->bbcode_second_pass_quote('cube', 'L')ike I said before the ridiculousness on this forum knows no limits.

If you want to see all hell break loose start imposing capital controls. That's what you're advocating JD.

History has made it very clear, there is no better "signal" of a collapsing society.