Oil Speculators on Wallstreet are the Problem

[TakeAStepBack]

All the people blaming speculators are basically saying the market is not an efficent platform. Sure speculators may drive up prices for a while, but the market ALWAYS corrects to reflect demand.

You need to take Ron Paul's hand out of your ass you puppet. First of all, oil companies aren't free markets that should be unregulated. If you want to build a product and sell it in the USA, then you can sell it on the free market. But Oil companies, like Healthcare insurance companies and Wallstreet, need to be regulated. Stop thinking that the billionaire robber barons are playing by the same rules that you and I play by. For that you middle class Republicans are sooo stupid. You think free unregulated markets are going to save you money? HA! UPS tried to charge me $60 to ship something to Switzerland. The USPost Office was under $10.

First of all, the US Government is GIVING the oil companies our land to drill for really cheap prices! Too cheap. Its a monopoly. And they don't pay their fair share of taxes like you and I. Nor do they pass on the savings to us. So stop thinking that they are doing free trade. It is unfair trade.

And if we let them do free unregulated trade on gas, then just like healthcare, eventually too many Americans won't be able to afford to drive. And do you think the oil companies care? When unregulated, they let poor granny die without heat in the winter. Remember that?

Same reason healthcare needs to be regulated. If left up to free markets, those monopolies can maximize profits by raising the prices until 10 million more Americans can't afford health insurance. Should they be allowed.

Yet another one that has no clue what a free market is, capitalism or corporatism.

These "robber barons" you speak of have a nice cozy relationship with govt. Which is how they drive out competition and corner an industry as a monopoly. The constitution is expicit about monopolies. Apparently this is all way over most peoples head.

 

[Jarhead]

All the people blaming speculators are basically saying the market is not an efficent platform. Sure speculators may drive up prices for a while, but the market ALWAYS corrects to reflect demand.

You need to take Ron Paul's hand out of your ass you puppet. First of all, oil companies aren't free markets that should be unregulated. If you want to build a product and sell it in the USA, then you can sell it on the free market. But Oil companies, like Healthcare insurance companies and Wallstreet, need to be regulated. Stop thinking that the billionaire robber barons are playing by the same rules that you and I play by. For that you middle class Republicans are sooo stupid. You think free unregulated markets are going to save you money? HA! UPS tried to charge me $60 to ship something to Switzerland. The USPost Office was under $10.

First of all, the US Government is GIVING the oil companies our land to drill for really cheap prices! Too cheap. Its a monopoly. And they don't pay their fair share of taxes like you and I. Nor do they pass on the savings to us. So stop thinking that they are doing free trade. It is unfair trade.

And if we let them do free unregulated trade on gas, then just like healthcare, eventually too many Americans won't be able to afford to drive. And do you think the oil companies care? When unregulated, they let poor granny die without heat in the winter. Remember that?

Same reason healthcare needs to be regulated. If left up to free markets, those monopolies can maximize profits by raising the prices until 10 million more Americans can't afford health insurance. Should they be allowed.

the wqords in bold?

Completely compromises the integrity of your post.

You are nothing more than a puppet with no independent thought.

 

[francoHFW]

Duped corporate tool! lol

 

[Jarhead]

Here is a question for you regurgitators of talking points..

Why did the price of gas go down nearly 50% in a few months back in 2008.

We had the same speculators, the same oil companies, the same refineries, the same drilling companies...

I know....it was becuase the world KNEW that Obama was going to be President so they all grabbed hands and sang kumbaya.

 

[Dick Tuck]

Listen up skippy...

Looking at your post...it is quite evident that this topic is way to deep for you.

It reuqires independent thinking.

Vendor pricing is the issue.....you just dont want to undersatand what I mean by that...and i am not going to even try to educate you.

Why?

Becuase it will make you see the light....and you dont want to see it.

Vendor pricing my ass. The vendors are buying gas from suppliers. The vendors want maximum market share in their small neck of the woods. They still have to live with the prices set by distributors, and that's clearly been skewed by oil speculators. Are you really so fucking dumb that you don't understand that?

here is a hint...

Gasoline is a BI PRODCUT of oil refining.

You are out of your league...dont go there with me.

You will leave in shame.

I promise you that.

You are quite a mental midget. Here's a clue. Bush rewrote the international trade agreements, that now allows distillates to be imported. It's another case of shipping our jobs overseas. Changes in the core differential between crude oil and consumer distillates hasn't changed much.

 

[sealybobo]

Why would a company want to over value their product?

Because they can make more money when they can get away with it. Do you really think that multinational oil companies care about moms driving their kids to soccer games?

so then why isnt food overpriced skippy?

Huh?

I mean...if the market got together and said....
"lets over value our product"...what would the soccer moms be able to do about it? Nothing...they need to eat.

So?

Why are food prices over valued?

Dont even try to answer....I will toss it right back at ya....you are out of your league here.

Because food prices are regulated. We subsodize farmers to keep prices low. And we allow illegals to come in and do migrant work for cheap to keep prices low.

You don't think food producers would try to gouge us if allowed?

And this is another reason why oil companies need to be regulated and if not controlled, NATIONALIZED because them gouging us is raising the prices of food. Stupid.

 

[Dick Tuck]

Here is a question for you regurgitators of talking points..

Why did the price of gas go down nearly 50% in a few months back in 2008.

We had the same speculators, the same oil companies, the same refineries, the same drilling companies...

I know....it was becuase the world KNEW that Obama was going to be President so they all grabbed hands and sang kumbaya.

Oooh...ooh...pick me. They went down because the world economy was on the brink of collapse.

 

[sealybobo]

And go ahead and gouge us beef producer. I'll just eat chicken. But what can I do if the oil companies gouge me? Buy a battery car? Not yet.

 

[sealybobo]

Here is a question for you regurgitators of talking points..

Why did the price of gas go down nearly 50% in a few months back in 2008.

We had the same speculators, the same oil companies, the same refineries, the same drilling companies...

I know....it was becuase the world KNEW that Obama was going to be President so they all grabbed hands and sang kumbaya.

He got you!

 

[Decepticon]

Here is a question for you regurgitators of talking points..

Why did the price of gas go down nearly 50% in a few months back in 2008.

We had the same speculators, the same oil companies, the same refineries, the same drilling companies...

I know....it was becuase the world KNEW that Obama was going to be President so they all grabbed hands and sang kumbaya.

Um....refining capacity?

Nearly 25% of U.S. fuel production shut
14 of 26 Texas refineries, producing about 3.8 million barrels of fuel a day, are shut down after Hurricane Ike hits the state's refinery base head on.
EMAIL | PRINT | SHARE | RSS
By Aaron Smith and Kenneth Musante, CNNMoney.com staff writers
Last Updated: September 13, 2008: 3:53 PM EDT

NEW YORK (CNNMoney.com) -- Nearly a quarter of U.S. fuel production was shut down in the wake of Hurricane Ike, according to a government assessment released Saturday after the storm slammed into the heart of the Texas coast's refinery base.

By noon ET, 14 of the 26 Texas refineries, representing a production capacity of 3.8 million barrels of fuel a day, had been shut down, the Energy Department said.

Almost all of those had been shut ahead of the storm and reports about the extent of damage were not yet available.

But even if the refineries were lucky enough to escape damage from the hurricane that came ashore at Galveston, Texas, early Saturday, they could remain shut due to near total power outages in the area.

Texas accounts for more than a quarter of the nation's total capacity to produce gasoline and other petroleum fuels. In normal operation, facilities there can produce up to 4.8 million barrels a day, according to the government.
Nearly 1/4 of U.S. fuel production shuts down - Sep. 12, 2008


So, did you not KNOW that Hurricane Ike seriously impacted oil refining capacity, or were you outright LYING? And in the months following the hurricane as refining capacity came back online, prices dropped?

Hmmm...Ignorant fool or a Baldfaced Liar?
Which will it be?


You want to show me the refineries that are shut down due to storms now?

Damn...another SLAM DUNK in the FACE of CONZ.
How humiliating for you.

 

[sealybobo]

All the people blaming speculators are basically saying the market is not an efficent platform. Sure speculators may drive up prices for a while, but the market ALWAYS corrects to reflect demand.

You need to take Ron Paul's hand out of your ass you puppet. First of all, oil companies aren't free markets that should be unregulated. If you want to build a product and sell it in the USA, then you can sell it on the free market. But Oil companies, like Healthcare insurance companies and Wallstreet, need to be regulated. Stop thinking that the billionaire robber barons are playing by the same rules that you and I play by. For that you middle class Republicans are sooo stupid. You think free unregulated markets are going to save you money? HA! UPS tried to charge me $60 to ship something to Switzerland. The USPost Office was under $10.

First of all, the US Government is GIVING the oil companies our land to drill for really cheap prices! Too cheap. Its a monopoly. And they don't pay their fair share of taxes like you and I. Nor do they pass on the savings to us. So stop thinking that they are doing free trade. It is unfair trade.

And if we let them do free unregulated trade on gas, then just like healthcare, eventually too many Americans won't be able to afford to drive. And do you think the oil companies care? When unregulated, they let poor granny die without heat in the winter. Remember that?

Same reason healthcare needs to be regulated. If left up to free markets, those monopolies can maximize profits by raising the prices until 10 million more Americans can't afford health insurance. Should they be allowed.

the wqords in bold?

Completely compromises the integrity of your post.

You are nothing more than a puppet with no independent thought.

Are you suggesting that you don't know that the rich have waged class warfare on the middle class?

You middle class Republicans don't get it. You don't belong to the GOP. You are voting against your own best interests.

Its all about rich vs middle class. The GOP represents the rich and the Democrats represent labor. Do you not understand this? Probably you do not. The GOP have duped you. Usually with wedge issues like God, Gays and Guns. If you are a social conservative, you are a fool voting with the GOP.

And by your post, you don't even realize that the rich have waged class warfare on us. You think because Fox said Obama is waging warfare on the rich, you believe that shit. Meanwhile the gap between rich and poor has never been wider. Clueless.

 

[sealybobo]

Here is a question for you regurgitators of talking points..

Why did the price of gas go down nearly 50% in a few months back in 2008.

We had the same speculators, the same oil companies, the same refineries, the same drilling companies...

I know....it was becuase the world KNEW that Obama was going to be President so they all grabbed hands and sang kumbaya.

Um....refining capacity?

Nearly 25% of U.S. fuel production shut
14 of 26 Texas refineries, producing about 3.8 million barrels of fuel a day, are shut down after Hurricane Ike hits the state's refinery base head on.
EMAIL | PRINT | SHARE | RSS
By Aaron Smith and Kenneth Musante, CNNMoney.com staff writers
Last Updated: September 13, 2008: 3:53 PM EDT

NEW YORK (CNNMoney.com) -- Nearly a quarter of U.S. fuel production was shut down in the wake of Hurricane Ike, according to a government assessment released Saturday after the storm slammed into the heart of the Texas coast's refinery base.

By noon ET, 14 of the 26 Texas refineries, representing a production capacity of 3.8 million barrels of fuel a day, had been shut down, the Energy Department said.

Almost all of those had been shut ahead of the storm and reports about the extent of damage were not yet available.

But even if the refineries were lucky enough to escape damage from the hurricane that came ashore at Galveston, Texas, early Saturday, they could remain shut due to near total power outages in the area.

Texas accounts for more than a quarter of the nation's total capacity to produce gasoline and other petroleum fuels. In normal operation, facilities there can produce up to 4.8 million barrels a day, according to the government.
Nearly 1/4 of U.S. fuel production shuts down - Sep. 12, 2008


So, did you not KNOW that Hurricane Ike seriously impacted oil refining capacity, or were you outright LYING?

Hmmm...Ignorant fool or a Baldfaced Liar?
Which will it be?


You want to show me the refineries that are shut down due to storms now?

Damn...another SLAM DUNK in the FACE of CONZ.
How humiliating for you.

And if they need more refineries, why don't they build them themselves? Is it because there is no money in it?

So why do they ask us to build them? They don't sell the oil they produce to us for cheap. They sell it on the free market.

Republicans like to privatize the profits and socialize the losses. Ever notice that?

 

[TakeAStepBack]

They sell it on the free market.

No they don't. There isn't any free market.

 

[sealybobo]

Here is a question for you regurgitators of talking points..

Why did the price of gas go down nearly 50% in a few months back in 2008.

We had the same speculators, the same oil companies, the same refineries, the same drilling companies...

I know....it was becuase the world KNEW that Obama was going to be President so they all grabbed hands and sang kumbaya.

Did you read the story?

The Commodity Futures Trading Commission is trying to limit how much speculators can bet in oil futures — a power it was given by Dodd-Frank. It issued a rule in October, but it won’t take effect for another year.

 

[bitterlyclingin]

Time for a good old fashioned Commie show trial, replete with Wealthy Bourgeoise Capitalist Villains being held in the dockets unshaven, their $2,000 Georgio Armani suits tattered and ripped, some missing sleeves and pockets. Barack can even arrange to have the festivities finished off with some public hangings by taking all the convicted capitalists after trial over to Zuccotti Park where the #OWS protestors hold court, and, in a scene reminiscent of Pontius Pilate asking the crowds who they wanted released to them, Jesus or Barabas, ask the OWS protestors what should be done and to whom. Tom Hanks and Stephen Spielberg can even supply the tundrils and the oxen to draw them. Box lunches anyone?
If Barry hurries he can have it all wrapped up so it all happens on Easter. Wouldn't that be neat? What a flair!

 

[KissMy]

Speculators can't drive up oil prices unless they have the means to store the oil outside of the commodities market. Inventories are below expectations & the Baltic Dirty Tanker Index is low which means speculators are not renting oil tankers to store oil off-shore. There is a supply problem brought on by government!!!!!!!!!!!!!!! High oil prices cause producers to increase production. Government is restricting production.

The commodity futures contract still represents physical oil. That oil is still delivered from the supplier to the consumer. If speculators & investment banks took delivery & resold/rolled over that oil it would increase the amount of supply driving down the price. The physical oil has to be stored somewhere (preferably hidden from inventory) in order to drive up prices. Last time they keep the oil on a bunch of tankers out in the ocean where it did not show up in inventory.

WHERE ARE THE OIL THE SPECULATORS HOLDING ALL THAT OIL???? Inquiring minds would like to know.

 

[KissMy]

And go ahead and gouge us beef producer. I'll just eat chicken. But what can I do if the oil companies gouge me? Buy a battery car? Not yet.

Use ethanol. I had to wait in line at the ethanol pump last week while 10 out of 12 of the gas pumps sat idle.

 

[Jarhead]

You need to take Ron Paul's hand out of your ass you puppet. First of all, oil companies aren't free markets that should be unregulated. If you want to build a product and sell it in the USA, then you can sell it on the free market. But Oil companies, like Healthcare insurance companies and Wallstreet, need to be regulated. Stop thinking that the billionaire robber barons are playing by the same rules that you and I play by. For that you middle class Republicans are sooo stupid. You think free unregulated markets are going to save you money? HA! UPS tried to charge me $60 to ship something to Switzerland. The USPost Office was under $10.

First of all, the US Government is GIVING the oil companies our land to drill for really cheap prices! Too cheap. Its a monopoly. And they don't pay their fair share of taxes like you and I. Nor do they pass on the savings to us. So stop thinking that they are doing free trade. It is unfair trade.

And if we let them do free unregulated trade on gas, then just like healthcare, eventually too many Americans won't be able to afford to drive. And do you think the oil companies care? When unregulated, they let poor granny die without heat in the winter. Remember that?

Same reason healthcare needs to be regulated. If left up to free markets, those monopolies can maximize profits by raising the prices until 10 million more Americans can't afford health insurance. Should they be allowed.

the wqords in bold?

Completely compromises the integrity of your post.

You are nothing more than a puppet with no independent thought.

Are you suggesting that you don't know that the rich have waged class warfare on the middle class?

You middle class Republicans don't get it. You don't belong to the GOP. You are voting against your own best interests.

Its all about rich vs middle class. The GOP represents the rich and the Democrats represent labor. Do you not understand this? Probably you do not. The GOP have duped you. Usually with wedge issues like God, Gays and Guns. If you are a social conservative, you are a fool voting with the GOP.

And by your post, you don't even realize that the rich have waged class warfare on us. You think because Fox said Obama is waging warfare on the rich, you believe that shit. Meanwhile the gap between rich and poor has never been wider. Clueless.

lol..

And I thought your LAST post compromised your integrity.


Fuck off...people like you should be exported to some island.

You are not American...you are some jeolpus asshole who assumes everyoine wants to get you.

Go away. You are not welcome here anymore.

 

[Decepticon]

High prices cause producers to increase production?
Really? Then why aren't more refineries operating to bring down gas prices?
No...in fact refineries are shutting down, aren't they?

 

[g5000]

Speculators have become too much of a good thing. Not just oil speculators. Commodities speculators in general.

Speculators serve a very useful and necessary purpose, but they have wreaked havoc in the markets since the beginning, and they were regulated for that reason.

Ever since, speculators have sought ways to relax the regulations which keep them in check. Our regulations do not keep up with their innovations. The infamous "Enron loophole" is but one example.

I will explain exactly how speculation works using very simple examples, and then I will explain how they can abuse their role in advantageous moments. I have used these examples with a roomful of kids and they were able to immediately grasp what speculators do. So you should be able to, too.


In one corner, we have Farmer Jones, who grows apples. In another corner, we have Grocer Smith, who buys apples from Farmer Jones to sell to his customers. Grocer Smith is an "end user".

In another corner, we have Speculator Adams. Under normal conditions, Adams buys and sells excess apples in the market.

Adams does not have any storage facilities for apples. He never actually takes delivery of apples. Therefore, Adams can in no way be mistaken for an end user.


Farmer Jones has been subject to the whims and fortunes of Mother Nature. Some years, there is a bountiful harvest. Other years, floods and hurricanes have resulted in reduced output. Then there are the bumper crop years.

Because the output of the orchards vary, Jones can never be certain how much he will get for his apples come harvest time. If the supply of apples is low, apples will rise in price. If there is a bumper crop, apples will be cheap.

Therefore, at the beginning of growing season, Jones has no idea what his income will be at harvest time.


On the flip side, Grocer Smith does not know how much he will have to pay for apples at harvest time. If the apple supply is low, he will have to pay higher prices, which means his customers will have to pay higher prices, and that could result in lost customers.


This is why the futures option was invented.


Long before the apples are harvested, Smith and Jones enter into an agreement. Smith will pay Jones a nickel for each apple. Smith also agrees to buy up to a million apples from Jones, as long as Jones has a million apples to sell. So this is a $50,000 futures contract.


Then let's say it is a bumper crop year. Apple farmers bring in a record number of apples. So apples drop to three cents apiece.

The futures contract has worked out well for Farmer Jones as he sells one million apples to Grocer Smith for five cents apiece.

Since it was a bumper year, Jones actually harvested a million and a half apples. After selling one million of them to Smith, he still has half a million apples left.


This is where Speculator Adams serves a useful purpose.

Farmer Jones could expend a lot of effort trying to find more customers, but Grocer Smith owns a whole chain of stores and finding another customer as big as Grocer Smith could be quite a challenge. Jones will more likely need to find several customers upon whom to unload his extra apples.

Well, Speculator Adams is wired into the entire apple market. He knows every producer and every end user. He can take Jones' extra apples and find buyers for them much more quickly than Jones can. For a price.

Jones and Adams enter into an agreement where Adams buys the apples from Jones for two and a half cents apiece. Adams then sells them to end users for three cents apiece.

Adams makes his living doing these deals for many, many growers, not just Jones.


And so everything works out just fine, and we see how a speculator keeps the wheels of commerce moving smoothly.


Now let's say there is a bad year for apples. The price of apples therefore rockets up to 7 cents apiece. But Farmer Jones only brings in 700,000 apples.

Grocer Smith gets a good deal. He is paying 5 cents for apples when the market price is 7 cents. However, he needs one million apples and Jones only provided 700,000.

Grocer Smith then goes to Speculator Adams for the remaining 300,000 apples he needs. And he will probably pay 7.5 to 8 cents apiece for them.

So once again, Speculator Adams provides a very useful service.



But what if Adams decides to interject himself between Farmer Jones and Grocer Smith?

All these years, Grocer Smith has been paying Farmer Jones 5 cents for his apples. Suppose Adams approaches Farmer Jones and offers him 7 cents for each apple he grows for the next three years? Suppose Adams approaches every apple grower out there and offers all of them 7 cents apiece for the next three years?

Farmer Jones is not an idiot. He clearly would be better off selling to Adams, and so he agrees.

If Adams is able to get enough producers to sell him all their future apples, he can "corner the market". All of the end users will have to come to him to buy their apples. And since he owns all the apples, he can name his price.

So the price of apples which have not even been grown yet skyrockets. This is exactly what happened in the grain markets before the Commodities Exchange Act of 1936.

Grocer Smith panics. He sees the price of apples is going to go up, and so he seeks out Adams to lock him into a set price for which he can buy apples from Adams before they go up again. This panic becomes a self-fulfilling prophecy and every other end user begins upping the amount they will pay in order to ensure their supply does not vanish.

And that is one way speculators drive up the price of commodities regardless of the law of supply and demand.



Another way is to imagine that Farmer Jones is one of the biggest apple producers in the world. He's a 100 million apples/year producer.

Jones is kind of tired of the ups and downs of the apple business and he is thinking about going into walnuts. Or at least that is the rumor which some pundit somewhere spreads.

Jones has a lot of buyers, and they panic when they hear the rumor. Their usual supply might suddenly disappear. They are snapped out of the complacency and begin to panic. A Goldman Sachs analyst puts out a report which says if Farmer Jones gets out of the apple business, the price of apples could double from the current price of a nickel.


Speculator Adams is besieged by panicked end users to get locked into new futures contracts.

Adams is in the catbird seat.


Seeing the advantage to the panic, Wall Street dealers do everything they can to keep the fear alive.




As I explained this to some 9-year olds, one of them interrupted. "ON A RUMOR?"

I had been using her as Farmer Jones, and a boy as Grocer Smith, and another girls as Speculator Adams. So I quickly pointed to her and said, "YES! If there is a rumor of an upcoming war with Iran (pointing at her, instantly changing her from Jones to Iran), then any country that buys oil from Iran (pointing at the boy, who had been Grocer Smith) will panic and go to the Speculator (pointing at other girl) to get locked into a future price for their oil."


All three instantly understood.