Fake-Out Thursday – Oil Scam Continues Unabated

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Thu, 12/16/2010 - 17:31 | 812480 Djirk
Djirk's picture

traders are driving up the cost of oil and holding down the cost of nat gas, meanwhile the western majors are selling oil assets to build LNG assets.....manipulation...ummm maybe?

I read another article on ZH saying there would be no market without liquidity provided by market makers and a robust derivatives market. I do not believe that is true. Markets functioned fine for centuries without leveraged market makers and derivs. I say put a stop to leveraged and speculative market trading and let the suppliers and demand work it out. Not to say producers could not access capital markets for reserve and inventories. 

Go ahead market "makers" and pawn my post to make yourselfs feel useful.

Thu, 12/16/2010 - 17:29 | 812475 the grateful un...
the grateful unemployed's picture

The Arabs have been complaining about the US commodity exchanges, which is a pricing mechanism, without the delivery capability, and is therefore a fraud. (we also use our SPR to create phony demand numbers) But if you can pad the demand, then you can hang on to some credibility (and hedge funds have bought oil for storage, taken it off the  market to help boost prices, anyone who does that must have a good idea that oil is undervalued). The weak dollar is the villain here, but Americans are not upset, that they are not paying a fair price for oil, or any other commodity. If you rip off some Arabs, so much the better. Rip off some farmers, some Chinese peasants, all to the good. Americans deserve 90% of the blame, for voting twice for Bush, and once for Obama, who will probably be reelected. We traded our integrity for a guaranteed standard of living. Nobody wants to be poor. We elect thieves for politicians and then act surprised when they are caught stealing. We all want an go go stock market, and plenty of booty under the Xmas tree, and we've sold our soles to keep it. Well you can't blame the guy who wants to send his kids to college, and buy his mother a cancer operation. Just the way it is. There is nothing fair about the way commodities are priced, and Americans who buy those products are just fine with that as long as they get the benefit..

Thu, 12/16/2010 - 17:14 | 812428 rhyzimmer02
rhyzimmer02's picture

Why they let garbage like this on the such a quality site is beyond me, its obvious that the author doesnt understand whats going on. 

Oil is expensive in $ terms but cheap to fairly valued in terms of gold and any other commodity.  Stop using the dollar as a measure of value across time, the world will make much more sense. 

In terms of peak oil, 2009 was the first year in 58 years that global oil demand actually fell.  The other 57 it rose, it will only take a few years of demand increase for oil prices to catch up with gold and the rest of the commodity complex

Thu, 12/16/2010 - 16:53 | 812359 sandorgb
sandorgb's picture

nobody controls the oil market. the structure of the market is not efficient as such, but the key is balance of power. the more regulations piled up, the more capital will move to circumvent them. it is an endless game. if you really want to change the system, fund cold fusion research. it is the technology which can change the paradigm. if you think it's pie in the sky, do some rigorous research. since we don't even understand the hydrogen loading properties of platinum metals group, there's no scientific basis to dismiss cold fusion (LENR) out of hand. surprised this hasn't gained more traction in the oil discussion. even if it takes another 20 years to perfect in the lab it is worth the effort.

Thu, 12/16/2010 - 19:10 | 812734 Sabibaby
Sabibaby's picture

Actually OPEC controls the oil market more than you would think.

Thu, 12/16/2010 - 16:21 | 812278 Gloomy
Gloomy's picture

Ilene,

 

   You miss the point. Commodites are the new money, since everything else is fiat. Since worries abound that TPTB will try to manipulate PM's, smart players are buying any and all hard assets in anticipation of the great sovreign debt crackup.

Thu, 12/16/2010 - 16:44 | 812341 Cdad
Cdad's picture

Yeah,

Like all the oil sitting around above ground and sitting on ships in the gulf is going to be what folk need most when the currency collapse kills business world wide.

In understand the argument but fail to see the economic sense in it.

Precious medals is what you are searching for...and it is a good thing I caught you.  They are on sale today!

Sweet.

Thu, 12/16/2010 - 16:52 | 812357 Gloomy
Gloomy's picture

I'm 1/3 oil, 2/3 PMs. Hedge you bets.

Thu, 12/16/2010 - 16:17 | 812266 lincolnsteffens
lincolnsteffens's picture

Dearest Ilene and Phil,

If it were Valentine's Day I would send you an "I'm your Valentine card" 'cause you say such sweet things to me. XOXOXO smooch smooch

Ahhh the evil witch Maria is pumping heavy commodities as I write.

Thu, 12/16/2010 - 16:03 | 812220 Sabibaby
Sabibaby's picture

I’ll be the naive guy and ask -> Could the price be within $80-$90bbl in order to keep the price from spiking too high when crunch time does come over the summer? Maybe their building a cushion to soften the blow from extreme ups and downs of energy costs? At the same time contango could keep speculators at bay.

Thu, 12/16/2010 - 16:58 | 812376 Drag Racer
Drag Racer's picture

no, this is true manipulation at the core. Do some research of Rockefeller in the early years and during other critical times in history and you'll get an idea of how these crooks operate.

Just to give you an example look at the ozone layer. R12 freon was banned because they said it would destroy the ozone layer. This is a complete lie. I know because my family was the largest R12 supplier on the west coast of the US. The truth is R12 will not react naturally with O3 (ozone). Chlorine is the bad guy here. The chlorine put in swimming pools is 1000 times more damaging to O3. But did they mention that... no. Though don't worry about the pools destroying our sun shield as the amount of chlorine gas to reach the upper atmosphere is so small it is just a non player. Though, every time we send up a rocket or shuttle into space it creates quite a large temperary hole in the ozone layer due to the massive amount of chlorine release by the solid rocket boosters. Of course they forgot to mention that too.

The reason to blame R12 on the hole in the ozone layer, which is just caused by the sun reflecting energy off Greenlans ice sheet and is quite normal when the solar radiation exites and breaks up the O3 molecule, is the patent on R12 ran out and Dupont was going to loose their monopoly. So, they invent and of course patent R134A as the replacement to R12 while getting congress to mamdate the use of. Also, since Dupont and big oil are such good friends, R134A is much less efficient and uses more gas/oil to cool your car while stuck in traffic wasting even more gas. Did I mention they hold the patents on the new compressors needed, the change over/recycling equipment, and ownership of the recycling facilities that they paid congress to mandate.

Anyway, the point being is you just can not trust the MSM stories as most of the time they are manufactured lies to facilitate the monopologopolies... But hey, its just business, not personal...

Thu, 12/16/2010 - 15:50 | 812187 Ferg .
Ferg .'s picture

I'm of the opinion that speculation in commodities integral to everyday life ( oil , wheat and other foodstuffs for example ) should either be severely curtailed or abolished entirely . That those on low income ( and in current circumstances those at the centre of the socio-economic chain) should have to divert  vast swaths of their funds simply to be able to function normally ( i.e to take in sufficient food and pay for fuel ) is deplorable . As a matter of principle I refuse to go long oil . I'm currently shorting the shit out of it . Of course as I'm just a lowly miniscule retail trader that means fuck all . Whatever about FX , equities and derivative securities , certain commodities should be sacrosanct and protected from the machinations and whims of a small clique of influential speculators .

Thu, 12/16/2010 - 15:46 | 812177 the not so migh...
the not so mighty maximiza's picture

good points

Thu, 12/16/2010 - 15:40 | 812164 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

I want to sell Chinese Peasant futures. Since those poor people are for all practical purposes slaves, and slaves are not people but things, and commodities are things that can be bought and sold based on forward delivery dates, why not? Yeah, I want to go short those little guys ...

We might as well add American Children contracts as well since with all of the debt that is being thrust upon them, they are effectively slaves as well. Short the little brats, they don't know how to suffer at all, but suffer they will.

Thu, 12/16/2010 - 15:34 | 812143 kaiserhoff
kaiserhoff's picture

With the exception of PMs, no one should be "investing" in commodities.  They are better viewed as goods in process, and should be left to specialists and speculators, but why the biggotted cartoon?  How is this the Republicans fault when the Dims have a stranglehold.  Your perma-bias is showing.

Thu, 12/16/2010 - 16:47 | 812351 jus_lite_reading
jus_lite_reading's picture

I was a lifetime Republican. I can tell you, both sides are as guilty as anyone. Didn't want to see it when I was. Doesn't matter anymore. We had a good run. Now, let's sit back and watch as the greed comes back to explode in their faces. Game over. 1776-2010 RIP

Thu, 12/16/2010 - 15:30 | 812134 Threeggg
Threeggg's picture

Great writeup.

I knew oil stocks had to be going through the roof because of the slowing economies around the world so less energy consumption.

Everyone keeps talking about peak oil but not that consumption has fell through the floor and every tanker, silo and oil storage facility is filled to the brim.

 

Thu, 12/16/2010 - 16:11 | 812239 flattrader
flattrader's picture

I had coffee with an oil/gas/energy trader last week who told me what was going to happen in the energy complex going forward would be stunning.

I reminded him that if they chose to pull that crap again the difference between now and 2008 was that 2+ years ago, people still had jobs and could pay for $3-$4+ a gal. gas.

They can run it up there again, but it won't stay there long as the so-called "economic recovery" comes to a screeching halt and people just stop driving anywhere uneccessary...and their tankers in the Gulf of Aden would continue to do donuts.

He seemed genuinely surprised that I thought such a series of events would happen.

I wonder where the hell people like this come from.

Thu, 12/16/2010 - 15:29 | 812131 Vendetta
Vendetta's picture

Thanks.  I forgot about the pre-2008 manipulations that led to people in 41 countries rioting about food prices, it looks like the manipulators are turning the screws again as their greed consumes them and the politicians are paid for their blind eye.

Thu, 12/16/2010 - 16:01 | 812216 flattrader
flattrader's picture

Google: Vampire Squid Goldman Sachs

and you'll get a link to an eight page? Rolling Stone article by Matt Taibbi that will remind you what a insidious group of worthless bastards can do to ruin the lives of people world wide,

Thu, 12/16/2010 - 15:22 | 812106 Cdad
Cdad's picture

First of all, the NYMEX contracts for January delivery close on Tuesday and there are still 132,168 open contracts or 1,000 barrels each (132M)scheduled for delivery to Cushing, OK, a facility that can handle at most, 45Mb of crude and is, at the moment, full.

Ilene,

I just had to say that, when I read this in your article, I got all hot and bothered and wondered if I should go all...

"Hey, Ilene, what's your sign."  Or maybe, "So, if you gave me your number I could punch you into my ole' calculator and figure out the sum of our parts," if you know what I mean. 

But I'm not allowed to say such things to other women, so I thought I'd just say RIGHT ON!  Because the oil futures chart lately is one of the dumbest charts I have ever seen because...I know, I know... it has to be so that the OIH can hold up the Roach Motel [SPY].  We all have to do our part, I guess.

So too damn bad Average Joe...pony up at that pump, fool!

Rock on, Ilene!

Cdad

Thu, 12/16/2010 - 15:21 | 812104 Spitzer
Spitzer's picture

THIS IS NOT A SCAM

If people would rather hold oil then dollars then so be it. Its got nothing to do with consumable supply and demand, it has everything to do with being out of the dollar.

Thu, 12/16/2010 - 16:00 | 812211 dussasr
dussasr's picture

I'm not sure I see the scam either...  If "manipulation" ended and prices went to $60 - the author's fair value, then production would collapse, demand would rise and there would be an oil shortage that would drive the price right back up.  What gives?

Thu, 12/16/2010 - 14:30 | 811931 max2205
max2205's picture

Thx. Didn't know I was getting the sausage from them too

Wall st has to go

Thu, 12/16/2010 - 14:27 | 811920 pitz
pitz's picture

Why not talk about banker salaries that have been artificially manipulated upwards, even though there is little that a banker does, that could not be done by your average new college grad who would be happy to accept $100k/year instead of literally millions (hundreds of millions) per year.

This is the bigger story, than merely some producers of oil reaping a bit of a windfall. 

Thu, 12/16/2010 - 16:21 | 812280 flattrader
flattrader's picture

Bit of a windfall?

You really need to re-read the article.

The socially worthless bankers who are getting those huge salaries you object to are doing so BECAUSE of the massive fraud they've perpetrated on consumers via commodities market manipulation.

This is NOT reaping a BIT of a windfall.

Try reading this first

http://www.philstockworld.com/2009/11/11/goldmans-global-oil-scam-passes...

Thu, 12/16/2010 - 17:23 | 812454 pitz
pitz's picture

BTW, if banker salaries weren't manipulated, then any alleged excess profit to the financial sector would flow to bank shareholders, not to employees or directors. 

Thu, 12/16/2010 - 17:15 | 812432 pitz
pitz's picture

The prices aren't flowing to the oil producers who get to sell for $90/barrel instead of the $60/barrel that is allegedely a more appropriate price?

 

Just how are bankers making money off of this???  Other than being owners of oil stock, perhaps?

Thu, 12/16/2010 - 16:02 | 812217 IBelieveInMagic
IBelieveInMagic's picture

Hey, be thankful that you are getting oil in exchange for some colored paper -- don't look a gift horse in the mouth...

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