OilPrice.com Weekly Oil Market Update: 04/05/2010 - 04/09/2010

Crude oil prices ended the week virtually unchanged from a week ago as optimism about demand warred with trepidation about historically high inventories in both crude oil and gasoline.

The benchmark West Texas Intermediate contract settled at $84.92 a barrel on Friday, only 5 cents ahead of the previous week’s Thursday close after surging above $87 a barrel early in the week and then declining for three straight sessions.

Bears noted that oil seemed unable to stay above $87 a barrel level, while bulls said that oil had tested the $84 level going down and found resistance.

Edolphus Towns Says Fed Officials Were Unhappy About Friedman Waiver To Buy GS Stock, Were Overruled

One of the most botched cases of conflict of interest abuse by a Federal Reserve official will forever remain the purchase of Goldman Sachs shares by Goldman Board Member, and FRBNY Board Member (the squid likes to keep its Federal Reserve puppets closely supervised) Stephen Friedman: an act strictly forbidden by the Fed itself. The action was so indefensible it led to Friedman's quitting shortly after disclosure of his transgression leaked. Yet the reasons why Friedman managed to effect this purchase of 37,000 shares of GS on December 17, 2008 is because he was granted a "waiver" by the Fed. A month ago, Chairman of the House Oversight Committee, Edolphus Towns sent a rather angry letter demanding an explanation from Ben Bernanke why he had allowed this blatant case of semi-insider trading to occur at the highest echelons of shadow government. Today, we find out that Towns is unhappy with the production provided by the Fed, and concludes "that senior officials had misgivings about granting the waiver but were ultimately overruled" and that "we believe a closer examination of this issue is necessary, especially when Congress is considering increasing the Fed’s powers.  In the coming weeks, we will continue our investigation of this matter and will schedule a hearing to learn more from Mr. Friedman and senior Fed officials about how he was permitted to make windfall profits by trading stock in a company he had a role in regulating." We are not so sure there is any room for confusion - after Goldman told its pseudo employees at the Fed to bail it out at the cost of tens of billions in taxpayer money, why is it in any way surprising that those same FRBNY Goldmanites will not be allowed to profit from Goldman's bailout as well? The is nothing than a clear cut case of power and political capture at the very highest level of the country, by the two most collusive entities, whose sole purpose is the confiscation of middle-class wealth, or whatever is left of it, before the administration decides to hike middle-class taxes to a Socialist country appropriate 99%.

Deep Thoughts From Ian Cumming And Joe Steinberg

From Leucadia's 2009 Letter: "Out of prudence we take a pessimistic view as to when this recession will end. To think
otherwise would be a gamble that we are unwilling to make."

JPY Speculative Shorts Surge To Most Since October 2007, EUR Hatred Moderates

In the week ended April 6, the record number of net speculative Euro shorts seen last week of -85,326 declined by almost 20k contracts to -67,223. The weekly change of 18,103 was the second biggest increase in bullish EUR bias in 2010. This was also manifested in the price of the EUR over the prior week, in which the dollar opened very week on Greek fears then somehow ended stronger even though nothing had been resolved about the Greek situation. Much more importantly for carry traders, the number of Yen shorts surged, with the net number of speculative JPY shorts hitting a two and a half year high of -42,305. Yet the deterioration in sentiment was a fraction of last weeks, when net short positions increased by a massive 41k to -31k. In the other major currencies, both the GBP and the CHF saw a minor improvement in sentiment, although while the CHF is close to the flatline, the GBP continue to be close to record net short levels.

Why Are Silver Sales Soaring?

The U.S. Mint just reported another record, but this time it wasn’t for gold. The Mint sold more Silver Eagles in March and in the first quarter of the year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986.

While this is certainly bullish, there’s something potentially more potent developing in the background. Namely, how this matches up with U.S. silver production. Like gold, the U.S. Mint only manufactures Eagles from domestic production. And U.S. mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all U.S. silver production is going toward the manufacturing of Silver Eagles. - Casey's Gold & Resource Report

Greek PR Smackdown - Goldman's Eric Nielsen Edition (Again)

Erik Nielsen must have gotten quite a beat down from the Goldman Greek PR corps. Earlier, as we disclosed, the firm's European strategist, suggested that something nasty this way comes courtesy of an emergency ECB meeting. Later, he backtracked not only on that statement, but also on all the media hoopla over the country with the inverted curve, saying (independent) media is now the functional equivalent of CDS traders - vile, smelly, scheming bastards. Amusingly, this is very much reminiscent to Erik faux pas in early February when he had the temerity to point out (rightfully so) that the Greek GDP deficit is actually 16%, not 12.2% as was widely believed (and with every passing week it is becoming clear that Nielsen was completely right, as 2009 GDP is now at 12.9%, and probably will be 14% in another month, yet post another smack down had to reissue his note saying it was all his fault for stirring the speculative elements). Too bad Erik does his best to report the truth as he sees it, only to receive the prop desk's Greek trading axis after the fact, which today apparently was in direct opposition with his earlier bearish tone.