New Report Oil Prices Manipulated Not By Demand

[Parche]

PORTLAND, Ore. – A new report about the dramatic rise of oil prices in June proves the price jump was not the result of supply and demand, U.S. Senator Maria Cantwell (D-WA) said Wednesday.


Instead, it suggests it may have been the result of market manipulation.


Cantwell and Robert McCullough of McCullough Research, a former investigator who exposed Enron’s market manipulation, released a new statistical analysis research report of oil futures and spot market prices.


The report shows that the dramatic rise in oil prices in June, and the subsequent fall in price in July, can't be explained by any of the fundamentals of supply and demand. Instead, it could be a result of the trading strategies of major market players.


Cantwell and McCullough said new data collection tools are needed so that federal agencies can identify the culprits and stop any market manipulation.


"Mr. McCullough’s research clearly shows that oil prices are no longer tied to supply and demand,” Cantwell said.


“Statistically, this research shows that prices are spiking absent of a crisis like a natural disaster or supply disruption. However, prices then fell when Congress began serious debate on how to crack down on those who may be trying to manipulate the markets. Research shows that traders may well be in control of the market, not supply and demand, and consumers have been left paying the price," she added.


“There is evidence of a troubling concentration of ownership in the oil markets,” said McCullough. “This allows a few players to have undue influence on setting prices. However, the regulators are driving blind through this crisis since they are collecting such little information that reveals who is doing what in the market."
------
:grr: :grr:

We knew that, its the same thing Enron did to Electric prices
:grr: :grr: :hi:

[BOSSHOG]

1. I don't understand the never ending discussion about why Gas Prices went up

The oil companies are reporting record profits quarter after quarter. They want more money, that's why the prices have gone up. Or am I just too simple minded and stupid to understand the idiosyncracies of market manipulation and fucking the public. In public.

[Parche]

7. Hey Boss

That is why I am glad I take the light rail, and bus to work.......

:woohoo: :hi: :patriot:

[BOSSHOG]

8. Hell

I'm a retired old fart. I seldom go anywhere. I put about 500 miles on my old truck every month and that's usually to restock my beer supply. I drink Budweiser, a nice import.

LOVE YOUR AVATAR.

[madrchsod]

16. budweiser? ya need to drink--->

Schlitz is being brewed again using the original formula..not that god awful swill they sold in the late 50`s and 60`s.

it`s the beer that made Milwaukee famous!

[BOSSHOG]

13. I ordered

the book SILVERSIDES "Back in Print" from P. W. Knutson & CO. The book was 19.95 plus five for S&H. 1-800-962-2585 if you are interested.

- "Exact copy" of original
- "New Forward by Skipper RADM Coye
- "Updated" list of sinkings
- "New" Photos

[Warpy]

9. About 2/3 of the price rise is due to the increased cost

of contract oil, thanks to GOPonomics tanking the value of the dollar.

The rest is pure hysteria, based on conjecture that this gang of thieves and lunatics in our government were going to be able to talk the military into aggression against Iran and driving the spot market oil price into the stratosphere.

Now we have those companies reporting record profit while demand continues to decline and instead of having a shortage, we are treated to reports of full tankers at anchor outside Houston and in the Persian Gulf.

At the same time, oil stocks have declined from 10%-30%.

The only thing you can say about this market is that it is bizarre.

[Leopolds Ghost]

37. Higher prices and lower demand for less oil means no shortages. Shortages are only price controls!

Econ 101.

There is less oil to be had, so the price goes
up exponentially as demand drops to meet it.

I find the notion that we aren't running out of
cheap oil fascinating.

1. What price does the OP think we should be paying for oil?

2. What percentage of that is tax to encourage conservation
and pay for mass transit, which is currently against US law?

3. And what percentage is the "natural" oil price? $20/bbl?

[tabasco]

46. Yes, it all happened in seven years.

Your blather is remarkably dull and unperceptive.

[whistle]

2. Dah!

[Tandalayo_Scheisskopf]

3. Link please. nt.

[tridim]

4. So Bush lied to us again last week when he said it was a supply problem.

Just another one to add to the pile of crap BushCo shovels every day.

[natrat]

32. suffice it to say anything out of any gop mouth is a lie

[WCGreen]

5. The whole market is devoid of traditional supply and demand

constraints.

It's the demand for high profit that is causing the drastic swings in all markets. There is no more long term look at market forces, it is all about the closing bell and how much is made that day.

[Epiphany4z]

6. duh just

duh...demand just dropped like a brick don't ya know.

[Greyhound]

10. 'Bout time this came out. Maybe we can keep it from going down the memory hole.

:kick: & R

[Javaman]

11. And how come these reports come out AFTER the price dropped? nt

[CrazyDude]

12. Market volatility does not prove market manipulation

Secondly, we do have a crisis in oil caused by the Iraq War.

[hendo]

14. ding ding ding

not to mention that high gas prices are the best possible reason to convert to alternate, renewable fuels.

If gas wouldn't have gone over $100 a barrel then we never would have seen a jump in hybrid/flex-fuel vehicle production.

Oh, and let's not forget the whole thing about China being a developing market.

Sure, let's just blame Bush. It is so much easier to do that than to think about it.

[Tandalayo_Scheisskopf]

15. Are we not supposed to feel outrage...

Over a gamed and manipulated market that has cost jobs and raised the price of everything? Are we supposed to give thanks for economic rapine by our "betters"?

I know I won't be feeling these things. At all. I will be calling for the total professional and economic ruin of these pricks, followed by well-tarred heads on pike poles at the entrance to the major markets. Time to start sweetening certain dispositions.

[hendo]

20. You can feel some outrage

just make sure that it is at the proper variables in this equation.

Although, no it is not alright to be pissed at China because they have a growing demand for oil.

[Hannah Bell]

28. the price rises aren't attributable to "china's growing demand"

the drop in us demand this year wipes out two years of chinese demand growth.

[Leopolds Ghost]

40. Not surprising since the US DRIVES TWICE AS MUCH AS WE DID IN 1980.

Why do you even have a problem with high gas prices?

They are the REASON for slipping US demand.

You're using tautological thinking here.

[hendo]

43. The drop in US demand

can be completely attributed to the increase in price.

Either way, Americans driving less is a good thing.

[Leopolds Ghost]

38. Why? Don't you believe oil should be taxed to keep it at a floor price that supports transit use?

If not, how can you guys claim to care about conservation of resources?

[HCE SuiGeneris]

18. No sense in blaming Bush or Cheney's energy policies, or deregulation, huh?

Yeah, um, let's not think about that.

What a pile of shit your comment is.

[hendo]

19. There is no sense in placing all the blame

on one person.

Use the brain that you supposedly have rather than take the easy way out.

[Hannah Bell]

26. Yes, it's much better to have your pockets picked under false

premises in order to be herded into "conservation" - as defined by the same liars picking your pockets.

The price of oil affects everything, including food, & folks die when it rises, while others profit.

If government was interested in groovy alternative vehicles & conservation generally, there are ways to make it national policy that aren't 1) dishonest 2) stealing from those least able to bear it, & 3) pumping the bank accounts of those who need it least.

[CrazyDude]

27. I do blame Bush, but not for the usual reasons proffered by the congrssional Democrats

1. War in Iraq created a terror premium in the price of oil where potential future production of oil has been considered risky.

2. However, most importantly, the War in Iraq coupled with increased domestic spending created a large deficit that had to be funded by essentially printing money. The price of all comodities, not just oil, have gone up over the past 8 years. In fact, the increase of oil compared to gold is only marginal.

[bullwinkle428]

33. So, do you support the current rush to drill the living shit

out of every possible location for oil or not? Because if that actually increased our supply substantially, people would fall back into old, gas-guzzling habits faster than you could shake a stick...

[Leopolds Ghost]

41. Whereupon they would confuse supply and demand even more by arguing we have plenty of oil.

"Just look at all the wells that were drilled when gas was $4 a gallon!"

Like the folks arguing that Chinese demand can't affect the price of oil
because a mere 3% drop in the HUGE US demand (caused by economic collapse,
NOT a desire to conserve) wiped it out, causing the price to correct.

In other words, they fail to realize demand for oil drops ONLY
because of high prices, and shortages ONLY happen when price
cannot go high ENOUGH to reduce demand.

Surely Hannah, who I assume is a socialist, would understand this,
seeing as how price control shortages turned every citizen into a
black marketeer and destroyed the Soviet system.

[hendo]

45. No

I do not support attempts to increase our supply.

[Leopolds Ghost]

39. DUers are blaming Bush BECAUSE they had to trade in their SUV. It's a huge inconvenience.

That is how ALL markets (capitalist, free market, or communist) work.

Inconvenience and expense as a method of regulating behavior.

People don't do the right thing if it's more inconvenient
than doing the wrong thing. Even 99% of liberals.

[hendo]

44. but that still doesn't make it right

There are plenty of reasons to not like Bush. There is no reason to make up more reasons.

[HCE SuiGeneris]

17. And there are the Repuke thugs to shoot down legislation to mitigate such manipulation...

showing up almost like they were summoned :sarcasm:

Repukes always there to do a bad deed when they're needed... :grr:

[hendo]

21. shoot down a bad idea?

umm, we controlled both house. Our party should have put a stop to it!

But unfortunately they did not.

[HCE SuiGeneris]

23. "shoot down a bad idea?"

What the hell are you talking about?

[hendo]

24. you can't blame the republicans for shooting something down

when the democrats controlled both houses.

and to blame bush for everything is intellectually lazy

[Joe Fields]

22. I was going to write a thread about this today, but now I don't have to.

Actually, I was going to talk about the corporate media's role in the manipulation of and complete omission of economic news. Their job, as I understand it to be now, is to provide cover for the greedy Wall Streeters who manipulate the market on a daily basis. Vital facts about our economy are either glossed over or omitted, while at the same time they try to get us to swallow bogus reasons as to why the market performed a certain way every day. If you listen to the nightly propaganda report, one day they will tell you that the economy is good, because of so and so. The next day they tell you that indications are that the economy is bad, due to such and such. The public gets whipsawed on a daily basis by the media, when they know damned good and well that fund managers and major traders cause the fluctuations in the market. And to top it all off, what the vast majority of people either don't know or don't understand, is that the Dow Jones isn't a good indicator anymore as to how good the economy really is, mainly because it is being manipulated so much.

I am not an expert, but I do pay close attention. The institutional investors make money both ways. You can bet that when the price of oil goes up, huge amounts of capital have poured into the oil market, and investors have bought long on futures, and conversely, when the price dips like it has the past ten days, the institutional investors have sold off. Now they are most likely shorting the market, and, as is often the case, they put straddles on.

Supply and demand has little to do with it, as the big players on Wall Street make vast amounts of money, either way the market goes. Someone on DU a few weeks ago came up with the bright idea that, for whoever buys contracts of oil futures, they must take physical possession of it. I like that idea. That would put an end to the wild speculation that is instrumental in crippling our economy.

[meow2u3]

25. Market manipulation?

That's better known as price fixing. It's illegal, but the Bush regime is turning a blind eye to it because Bush and Cheney themselves are profiting.

[B Calm]

29. They need to nationalize the oil industry now!

[eshfemme]

30. Well, yeah. This is a no brainer.

I wish the government wouldn't be so slow to realize something that we've all known for years. It's gotten to the point now where simply stating the facts is a revelation. Maybe this is why Obama's common sense seems so messianic.

[jazzjunkysue]

31. Greg Palast was right: It's the reason for the Iraq invasion: Oil market prices.

We didn't go to iraq to take their oil. No, we didn't. We went in at the request of George's oil friens in the middle east to gain control of the market, of the price of oil.

Saddam was turning the oil tap on and off, just to screw with opec. When he pumped oil, the price tanked. Then he'd turn off the tap and the price would soar.

We don't want all of the iraq oil to flood the market because the price would plummet again. We simply wanted our own hand on the spiget, so we could control the price.

If you know this, everything else makes sense. If you don't know this, nothing that's happened in the last 8 years makes sense.

You also have to know that George is in business with these crooks: It's called the Carlyle group.

George used the presidency and our military and our economy to finally do something he could never do: Succeed as an oilman. All his previous attempts failed miserably.

John is poised to possibly publicly hold the reins of this entire global oil syndicate. There is nothing they won't do to maintain control of this, including rig elections, or blow up the world trade center.

Everything makes sense. Even PNAC is really more or less a smokescreen for the entire thing. They stand to profit, of course but they only exist in order to shield the Bush family from culpability. They're the strawman to take the heat off the real criminals.

Maipulating the market is the sole purpose of the global wars now. Manipulating the market is running everything.
http://www.gregpalast.com/madhouse/

[indepat]

34. Market manipulation make many a good 'puke loyalist obscenely wealthy

:P

[happydreams]

35. After all this is monopoly capitalism. A quote from Woodrow Wilson...

(1913)
...But there is a line you cross, above which you are not capitalizing your earning capacity, but capitalizing your control of the market, capitalizing the profits which you got by your control of the market, and didn't get by efficiency and economy. These things are not hidden even from the layman. These are not half-hidden from college men. The college men's days of innocence have passed, and their days of sophistication have come. They know what is going on, because we live in a talkative world, full of statistics, full of congressional inquiries, full of trials of persons who have attempted to live independently of the statutes of the United States; and so a great many things have come to light under oath, which we must believe upon the credibility of the witnesses who are, indeed, in many instances very eminent and respectable witnesses. I take my stand absolutely, where every progressive ought to take his stand, on the proposition that private monopoly is indefensible and intolerable. And there I will fight my battle. And I know how to fight it. Everybody who has even read the newspapers knows the means by which these men built up their power and created these monopolies. Any decently equipped lawyer can suggest to you statutes by which the whole business can be stopped. What these gentlemen do not want is this: they do not want to be compelled to meet all comers on equal terms. I am perfectly willing that they should beat any competitor by fair means; but I know the foul means they have adopted, and I know that they can be stopped by law. If they think that coming into the market upon the basis of mere efficiency, upon the mere basis of knowing how to manufacture goods better than anybody else and to sell them cheaper than anybody else, they can carry the immense amount of water that they have put into their enterprises in order to buy up rivals, then they are perfectly welcome to try it. But there must be no squeezing out of the beginner, no crippling his credit; no discrimination against retailers who buy from a rival; no threats against concerns who sell supplies to a rival; no holding back of raw material from him; no secret arrangements against him. All the fair competition you choose, but no unfair competition of any kind. And then when unfair competition is eliminated, let us see these gentlemen carry their tanks of water on their backs. All that I ask and all I shall fight for is that they shall come into the field .against merit and brains everywhere. If they can beat other American brains, then they have got the best brains.


http://www.cooperativeindividualism.org/wilson_monopoly.html

[hunter]

36. When they're done fleecing the speculators who bet high...

... they'll fleece the speculators who bet low.

The "producers" are the only ones who know exactly how much it's costing to extract that last barrel of oil the market demands and what kind of reserves they really have. Everyone else is speculating.

What makes this market different is that reserves are inevitably declining and there is no possibility for anyone else to enter this market from scratch and begin extracting oil at a level great enough to undercut the existing extraction industries.

In any case, a rational industry does not kill off its customers unless it knows it can cultivate new customers. Slowly suffocating the automobile and transportation industries doesn't seem like something the oil industry would want to do, but it's very possible they've recognized the end of the oil age is inevitable and have charted a course that maximizes their profits as extraction rates decrease. Mostly I don't think the oil extraction industries worry much about who gets hurt in the process. If some GM or Ford worker gets laid off, it's about as significant to them as some family in Africa who can no longer afford food. They might say, "too bad about that, but our first obligation is to our shareholders."

[Subdivisions]

42. The IEA will come out with it's assessment of world oil production

and reserves/supplies in November. And the leaks coming out of the investigation don't paint a pretty picture about future production and supplies.

But go right ahead and go with that source. You'll be alright.