Top US regulator asked for evidence of oil market manipulation

[Joanne98]

Source: Times Online UK

America’s top futures market regulator will be invited to give evidence in London as part of a full parliamentary investigation into possible manipulation of the oil market, The Times has learned.

MPs on the House of Commons’ powerful Treasury Select Committee are set to unveil details of the investigation next month, after they were left dissatisfied with findings from an initial inquiry into oil market regulation held last month.

A spokeswoman said it was “highly likely” that the committee, chaired by Labour MP John McFall, would push for a full parliamentary inquiry when Parliament returns from its summer recess.

Nick Ainger, MP, who is also a committee member, said that among those who would be invited to give evidence are Walter Lukken, chairman of the Commodity Futures Trading Commission (CFTC), which has launched a series of initiatives designed to stamp out alleged market abuse in the US in recent months.



Read more: http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4471661.ece

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The proposals, which could come into effect this autumn, are intended to stop traders evading position limits in the US by trading on ICE Europe, a practice that American critics have called the "London loophole".

Bushco has been using London to drive up prices. Another reason to impeach him and put him in prison for the rest of his life. Along with the Republicans sitting in protest right now because THEY know what's going on and they are LYING to the American people.

They are aiding Bush in another energy crime and they should be called on it.

[jdlh8894]

1. So I guess OPEC

doesn't have a thing to do with it?

[Jackpine Radical]

2. The world is awash in oil.

US companies are exporting 30% more gasoline than they did a year ago. The Saudis are openly saying that there is no oil shortage.

Connect the dots.

Or, for the cognitively challenged Republican lurkers,

connect the dot.

[jdlh8894]

3. Maybe the US

Has more refineries ? Why do you think they ship crude from other countries. ie. Mexico,Venezuela,Iraq,Saudi,Canada,etc. They ship it to us to be refined. Then we ship back the finished product.

[Jackpine Radical]

4. So why are we shipping so much more out this year than last?

I'm told that we are out of storage capacity for refined product. And the prices at the pump in no way follow a supply/demand curve.

[jdlh8894]

5. Can we say China? n/t

[Jackpine Radical]

6. Can we say market manipulation?

Can we say Enronization?

Can we say monopoly?

[jdlh8894]

7. How is it a monopoly when it is world traded? n/t

[Jackpine Radical]

9. Here is a little piece you might find interesting:

We Can't Afford Fossil Fuels—At Any Price


The current Republican party line holds that the high gas prices are the fault of the Democrats, who won't unleash the oil companies to drill wherever they want for the remaining dregs of that liquid black gold. Unfortunately, the oil price situation is a bit more complicated than that.

To begin with, experts are debating whether or not we have already reached the point of “peak oil--” the point at which more than half of the Earth's oil reserves are used up. That is the theoretical point at which the economists tell us that there is no escape from ever-rising prices.

There is no doubt that oil is a finite resource, and we are having to move into more and more costly extraction situations, with an accompanying upward drift in prices. At some price point, resources such as shale oil and oil sands will become economically worthwhile to exploit. Therefore the concept of peak oil is something of a moving target. One can use up half of the oil available by certain extraction methods without having used up half the oil that might be available if the price were high enough. Also, of course there is the possibility of new and cheaper extraction technologies, which also clouds the issue.

I'm not at all confident that we have good data on precisely what the world's oil reserves are. It is not in the interests of the industry for those numbers to be available, so they aren't, at least with any accuracy. They will give us whatever numbers best serve their interests of the moment.

Also, in the long run, of course oil prices must go up as the commodity runs low. In the very short term, however, gasoline prices seem rather unrelated to supply. I think we are being grossly manipulated, "Enron-ed," at the pumps. The economist Ravi Batra lays out some of the relevant data about the oil monopoly in his recent book The New Golden Age. Here Batra points out some things like the difference in the natural gas versus oil markets. Natural gas fluctuates wildly with demand--a fact Batra attributes to the fact that the natural-gas market is divided up among many owners & is therefore fairly competitive. Oil, on the other hand, is much less responsive to supply-demand fluctuations due to the fact that the supply and the prices are controlled by a relatively few gigantic interests.

If you look at the data, you can see the consequences of monopoly in the oil market quite readily. People are simply driving less, and US gasoline usage is currently something like 7% below last year, but—despite recent drops—the prices are much higher than a year ago. To make up the difference, the poor oil industry is having to export some of the surplus gasoline that is clogging their storage tanks. Gasoline exports from the US to other countries are up 30% over last year.

One interesting side-effect of the near-monopolization of the oil occurred recently when Exxon-Mobil announced profits of $11.7 last quarter.. These profits were the highest on record for any American corporation in history. You may be surprised that Exxon stock prices fell as a result of this annuncement. Wall Street was disappointed that the profits were not even higher.

To return to the long-term scenario, there is no doubt a true supply-demand curve resulting in increasingly short supplies of a finite and irreplaceable resource, but there is also a huge amount of price manipulation, driven by forces such as speculation and corrupt monopolistic behaviors, along the way. Economists know that effective regulation could quite readily bring about a substantial drop in prices in the short run by the simple expedient of driving the forces of speculation out of the scene--but of course ultimately the physical reality of shortages will catch up with us. My real concern, though, is with the effects of unbridled use of fossil fuels and oil-based pesticides, fertilizers, and other chemicals on the environment.

To put my fears a bit more straightforwardly, regardless of the exact point of peak oil, I'm afraid that we may have enough of it to kill ourselves with. We very badly need to get off the fossil-fuel habit--and quickly--in the interest of the biosphere, regardless of the ultimate availability of the stuff.

[Hannah Bell]

8. piffle.

chinese demand is about 9% of world demand. the us is 24% & europe about the same, europe's been pretty flat for years & us down about 4% over the last year. chinese economy is slowing (us exports down) & the us drop in consumption is equal to nearly the entire WORLD demand growth 2006-2007.

[Jackpine Radical]

10. Thank you.

[jdlh8894]

11. Link please? n/t

[Jackpine Radical]

12. Google is your friend.

Don't expect us to cure the totality of your ignorance. It's too daunting a task.

[jdlh8894]

13. Then why reply?

All I asked for was a link .

[Trillo]

18. Not only did you ask for a link,

you asked politely!

I just wanted you to know that some others noticed that.

[jdlh8894]

14. Still waiting!!!!

[Hannah Bell]

16. sorry i wasn't hanging out at the computer to serve you. but you have

the reply now. you still have to do the work of comparing the data for yourself.

most folks don't take the trouble.

[Hannah Bell]

17. still waiting for the acknowledgement of the links, too.....

[Hannah Bell]

19. still waiting....

[Hannah Bell]

15. i don't get my info entirely from "links" telling me what to think. i look at

what various folks say & then compare with others & original data. the factoids in my post come from about 6 sources,

bp's 2008 review of energy:

http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622

then you have to go through the tables & compare the numbers year to year -

for the figure on world/us demand decline, i started here:

http://peakoildebunked.blogspot.com/2008/06/365-massive-drop-in-us-demand-in-april.html

"The size of this drop (down 811,000bpd, year-on-year) is massive. Indeed it's almost enough to wipe out total worldwide growth in oil consumption from 2006 to 2007 (990,000bpd, according to the BP Statistical Review 2008). It is enough to wipe out two years worth of consumption growth from China:"

& then again, i compared it to bp's figures & some other news reports.

it's hard work, i tell ya.