Bush oil cartel raises oil prices

[alan1]

Or are the rising oil and gas prices due to the weaker dollar?

NYMEX crude oil prices rise above $53 on global stimulus, OPEC production cut


With the economic stimulus and bailouts, the inflationary pressure from spending massive amounts of money that countries don't have will take it's toll.

 

[Toro]

Oil prices are rising because of liquidity flooding the market. Oil is not going up because of dollar weakness. Oil has gone up in all currencies. The commitment of traders report shows that the proportion of futures contracts held by commercials (the guys who make the stuff) to non-commercials (speculators) is near all-time lows.

 

[Oddball]

The commitment of traders report shows that the proportion of futures contracts held by commercials (the guys who make the stuff) to non-commercials (speculators) is near all-time lows.

What about end users trying to lock in prices, like airlines, in order to maintain relatively stable month-to-month budgets??

 

[Toro]

The commitment of traders report shows that the proportion of futures contracts held by commercials (the guys who make the stuff) to non-commercials (speculators) is near all-time lows.

What about end users trying to lock in prices, like airlines, in order to maintain relatively stable month-to-month budgets??

Those are commercials. It's primarily speculators driving up prices.

There is a lot of cash sitting in commodity hedge funds that has been put to work. I own LEAPS on the USO, which I'm blowing out tomorrow.

 

[alan1]

The commitment of traders report shows that the proportion of futures contracts held by commercials (the guys who make the stuff) to non-commercials (speculators) is near all-time lows.

What about end users trying to lock in prices, like airlines, in order to maintain relatively stable month-to-month budgets??

Those are commercials. It's primarily speculators driving up prices.

There is a lot of cash sitting in commodity hedge funds that has been put to work. I own LEAPS on the USO, which I'm blowing out tomorrow.

Was it speculators that drove down the price to begin with?
Or do they only get the blame when the price goes up?

 

[Toro]

Was it speculators that drove down the price to begin with?
Or do they only get the blame when the price goes up?

There has been a structural shift in the composition of the commodities futures markets, which has been well documented. There has been a large inflow of funds into the commodities markets as primarily large institutions increased their asset allocations to commodities. Not only do you see it in the commitment of traders reports, you see it merely in the curve. For example, oil was usually in backwardation, meaning that the spot price was usually higher than prices for contracts to settle in the future. Investors and speculators generated a significant amount of their return by playing the "roll" whereby they bought contracts set to expire in the future and "rolled" up the curve as expiration approached and the price rose to the higher spot price as time went on. So everyone tried to do that, which increased demand out on the curve, such that futures prices have generally been higher than spot prices over the past five years. When the futures prices are higher than the spot price, this is known as "contango." What this means is that this flood of investment money has fundamentally altered the structure of the market. So whatever the specs so, they will have more of an effect than in the past.

When the spot price of oil was in the $30s, the percentage of commercials to specs was about average over the average of the past 30 years but was near highs compared to the past five year average. Thus, when oil was low, it was because the specs had sold out their positions and the commercials were buying.

 

[alan1]

Was it speculators that drove down the price to begin with?
Or do they only get the blame when the price goes up?

There has been a structural shift in the composition of the commodities futures markets, which has been well documented. There has been a large inflow of funds into the commodities markets as primarily large institutions increased their asset allocations to commodities. Not only do you see it in the commitment of traders reports, you see it merely in the curve. For example, oil was usually in backwardation, meaning that the spot price was usually higher than prices for contracts to settle in the future. Investors and speculators generated a significant amount of their return by playing the "roll" whereby they bought contracts set to expire in the future and "rolled" up the curve as expiration approached and the price rose to the higher spot price as time went on. So everyone tried to do that, which increased demand out on the curve, such that futures prices have generally been higher than spot prices over the past five years. When the futures prices are higher than the spot price, this is known as "contango." What this means is that this flood of investment money has fundamentally altered the structure of the market. So whatever the specs so, they will have more of an effect than in the past.

When the spot price of oil was in the $30s, the percentage of commercials to specs was about average over the average of the past 30 years but was near highs compared to the past five year average. Thus, when oil was low, it was because the specs had sold out their positions and the commercials were buying.

So, it sounds like you are saying the speculators did cause the drop in price.

 

[Midnight Marauder]

It's Booooosh! And Halllllliburton!!!! And Cheeeeeeney!!!!

 

[Toro]

So, it sounds like you are saying the speculators did cause the drop in price.

They caused it to go up big and they caused it to go down big. For the most part.

 

[auditor0007]

So, it sounds like you are saying the speculators did cause the drop in price.

They caused it to go up big and they caused it to go down big. For the most part.

So where do you see this going near term Toro? Are the speculators going to continue driving it higher, or are we do for a bust and large drop? I've been under the assumption that the glut is growing to the point that we have to see a big drop soon. Am I wrong?

 

[KittenKoder]

I am amazed that no one ever stops to think that maybe oil prices are on the rise because we are running out of crude? It takes billions of years for the planet to make this stuff and we are using it up very rapidly.

 

[Toro]

So, it sounds like you are saying the speculators did cause the drop in price.

They caused it to go up big and they caused it to go down big. For the most part.

So where do you see this going near term Toro? Are the speculators going to continue driving it higher, or are we do for a bust and large drop? I've been under the assumption that the glut is growing to the point that we have to see a big drop soon. Am I wrong?

Yeah, I just liquidated my oil position because I think the price is going to drop. But I could be wrong.

 

[Oddball]

Why sneeze at a profit, anyways?

 

[Toro]

exactly

 

[sealybobo]

Or are the rising oil and gas prices due to the weaker dollar?

NYMEX crude oil prices rise above $53 on global stimulus, OPEC production cut


With the economic stimulus and bailouts, the inflationary pressure from spending massive amounts of money that countries don't have will take it's toll.

True. When the Federal Reserve prints and gives out $9 trillion dollars to their banking buddies in the last 4 months of Bush's presidency, I'd say that would weaken the dollar.

One Penny Sheet » Federal Reserve Cannot Account for $9 Trillion video

Imagine they doubled the debt in 4 months. Shocked? Disbelief? Wondering why the media won't talk about this? Its because they own the media.

And they raised gas prices because its summer. In the winter they get us with heating our homes. When we cut off the heat, they get us during travel season. Wake up boy.

 

[sealybobo]

I am amazed that no one ever stops to think that maybe oil prices are on the rise because we are running out of crude? It takes billions of years for the planet to make this stuff and we are using it up very rapidly.

I don't see any lines at the gas station.

 

[sealybobo]

It's Booooosh! And Halllllliburton!!!! And Cheeeeeeney!!!!

And the Federal Reserve

The fed cannot account for the whereabouts of $9 trillion worth of off-balance sheet transactions over the course of the past eight months. Nor can it explain the $1 trillion expansion of the Fed’s balance sheet since last September.

 

[Oddball]

Closed Head Injury Theater presents...........

The fed cannot account for the whereabouts of $9 trillion worth of off-balance sheet transactions over the course of the past eight months. Nor can it explain the $1 trillion expansion of the Fed’s balance sheet since last September.

 

[sealybobo]

Dude wants to give sealy head...........

The fed cannot account for the whereabouts of $9 trillion worth of off-balance sheet transactions over the course of the past eight months. Nor can it explain the $1 trillion expansion of the Fed’s balance sheet since last September.

 

[Oddball]

I guess if that's all you got.......