Is It Time For Obama To Spook The Oil Markets (And If So, How?)

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Thu, 05/05/2011 - 12:35 | 1243742 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Call the world's producers bluff?  No, what he should do is pull troops from all wars and give himself creditability.  The last thing we need right now is for our Supreme Dictator to politic.

Thu, 05/05/2011 - 12:46 | 1243819 optimator
optimator's picture

Pulling the troops alone would reduce the amout of fuels the largest user of POL uses.....the U.S. Military.  One F-15 burns 500 gallons in one hour on average.

Thu, 05/05/2011 - 14:31 | 1244271 Whats that smell
Whats that smell's picture


Wars on the other side of the globe use a gallon too!

Maybe we should save some powder for when we truly need it?

Thu, 05/05/2011 - 15:51 | 1244727 augie
augie's picture

anger not direct at you optimator don't take offense but 500 gallons is piggon feed compared to the support staff requirement necessary to keep the damn plane in the air for even 1 hour. Helicopters are even worse.

Bring the boys home.

Thu, 05/05/2011 - 12:51 | 1243866 trav7777
trav7777's picture

the bluff of world producers is that they CAN produce really wanna call that??!?!

Thu, 05/05/2011 - 13:04 | 1243922 tmosley
tmosley's picture

What is the inventory situation, Trav?  In 2008, anyone who hiked production in response to the rising prices got badly burned, because all the inventory that had completely filled all onshore storage and had spilled out into leased tankers anchored along the coast all came rushing back in at once.

You ever think maybe they don't want to repeat that?

Proceed with the vendetta ;)

Thu, 05/05/2011 - 13:06 | 1243926 Texas Gunslinger
Texas Gunslinger's picture

Is this like silver today, and those silver etf's? Tons of hoarded supply, rushing into the market?

Thu, 05/05/2011 - 14:12 | 1244201 tmosley
tmosley's picture

Possibly, but silver costs much less to store than oil.  It can thus be held for a much longer time period.

Also, you are truly the king of trolls.  You're like a ninja or something.  Act totally dumb most of the time so no-one takes you seriously, then BLAM you cut deep into your opponent's argument.  Really and truly excellent.

Tons of supply is unlikely to come out, however, because most of it doesn't exist, and what does exist will be gobbled up by Eastern governments as a strategic resource in the course of dollar divestment.

If it is real, I will happily buy some, however.  Large amounts are cheap to smelt into other forms, which are going for huge premiums right now.  That's if you can get time at a smelter.  

Thu, 05/05/2011 - 13:05 | 1243939 Mr Lennon Hendrix
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Finance should not be a game.  The world needs to come together, not bluff at each other.  America needs oil.  It has not prepared for peak oil.  The middle east needs to continue its development.  It is not prepared to sustain growth.  Both sides are currently in the dark.  They should recognize their collective failures, and program a cooperative agreement.

Thu, 05/05/2011 - 13:09 | 1243954 LawsofPhysics
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Maybe, but who really cares?  I know what the margins are for my books.  In order for me to produce more, I first need more customers.  While we are growing a bit (biotech) the margin compression is horrible and getting worse.  At some point that closes and the cost is passed on to the customer.

Besides, just like the oil that sat in tankers and came flooding back into the U.S., so will all of Ben's funny money.  Of course the is still digital money, anyone know what the levels of physical dollars in circulation are?  Could be another win-win for physical metals.

Thu, 05/05/2011 - 13:18 | 1243967 Texas Gunslinger
Texas Gunslinger's picture

If the Fed becomes our largest creditor, is it possible for them to forgive the Treasury's debt, if/when compounded interest begins to drown them and the dollar flood begins?


If the Fed can create dollars, the Fed can taketh away.


Thu, 05/05/2011 - 13:22 | 1244010 LawsofPhysics
LawsofPhysics's picture

That would be great, but very deflationary.  deflation rewards you and I and punishes banks, never going to happen.

Thu, 05/05/2011 - 13:31 | 1244038 TruthInSunshine
TruthInSunshine's picture

Deflation actually rewards most creditors, including almost all banks, and crushes debtors.

If you are a bank, and I borrow a dollar from you, deflation means I pay you back with increasingly valuable dollars as time goes on.

Thu, 05/05/2011 - 13:46 | 1244078 LawsofPhysics
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Bullshit.  The banks "assets" are deflating too.   Moreover, a stronger dollar, means I spend less on the things I need to keep my business and home afloat.   Hence I have more cash to invest elsewhere.  Having the ability and freedom to invest as you see fit (and not simply spend everything on survival) is real wealth idiot.

Thu, 05/05/2011 - 13:52 | 1244115 TruthInSunshine
TruthInSunshine's picture

I don't take it personally, but you are arguing against mathematical certainty, essentially.

Thu, 05/05/2011 - 14:15 | 1244202 MachoMan
MachoMan's picture

That, and the reason why he has "margin compression" is because his increased costs CAN'T be passed on to customers...  I think what he meant was once the last bit of available profit is squeezed down via margin compression, he'll shut the doors rather than pass it on to customers...  at least he won't be alone...

Thu, 05/05/2011 - 14:27 | 1244227 LawsofPhysics
LawsofPhysics's picture

Yes, thanks for helping macho man.  Tough day.  I will shut my doors.  At least in the public sense.  I will essentially move to a black market business in a truly free market.  I have already spoken with a couple of my people about this.  People will still need/want products that help them survive better (improve their quality of life).  In general, that is what our products do, looking for more local suppliers of raw materials now.

Thu, 05/05/2011 - 14:57 | 1244429 TruthInSunshine
TruthInSunshine's picture

It's hard to be a competitive business, know matter how competent the management, when you have a rigged market (in the specific and broadest senses).

Many feel the way you do. I have seen two generations of well-etablished family businesses wiped out in the last two years, some very modest and some extremely wealthy, because of the fraud and crime inherent in an increasingly desperate Ponzi Scheme that is being run by our government, The Federal Reserve, and the global cabal.

Thu, 05/05/2011 - 15:10 | 1244502 LawsofPhysics
LawsofPhysics's picture

You are right, and yet I encounter "educated professionals" every day that claim centralization is a farce.  Well, maybe they will be right when the giant ponzi collapses and local black markets rule.

Thu, 05/05/2011 - 13:50 | 1244116 Dr. Engali
Dr. Engali's picture

Deflation punishes us and rewards the banks. You are bass ackwards. If we have inflation I can pay of my mortgage with a trillion dollar bill and get some cash back.

Thu, 05/05/2011 - 15:50 | 1244200 Texas Gunslinger
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<comment removed by the administration>

code: 25840







Thu, 05/05/2011 - 14:28 | 1244258 LawsofPhysics
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No, I am not.  I have cash.  Perhaps I simply want deflation, that better?  Moreover, you only get a trillion dollar note in an inflationary (increase in available money) cycle.


From my perspective, buying power is all that matters.  I have customers, I make a profit, I want/need more buying power.  But then again all my profits are reinvested in my people and my technology.  How many operations in the U.S. are doing that now?  Maybe that is the problem here.

Thu, 05/05/2011 - 15:01 | 1244447 TruthInSunshine
TruthInSunshine's picture

We should have had deflation from 2008 through now, in just about everything - but Bernank, being the 'expert' that he is, decided that any deflation would cause a depression (Not really, but that's what he claimed publicly), in order to get his masters' TARP, TALF and QE in the works.

Deflation would have been a boost to almost every American's standard of living, and it would have reset the economic table for ORGANIC growth, of the sustainable kind, going forward.

But central bankers only care about serving their bosses, and their bosses are NOT the American People.

Thu, 05/05/2011 - 12:59 | 1243897 Id fight Gandhi
Id fight Gandhi's picture

Pump prices now at 4 and the price of oil is down. They're so quick to raise it but never quick to drop it.

Then the gas station owners are on tv saying they have no say in the matter and gas makes them only a penny a gallon profit. Yeah right. They'd be better off going cheap with gas and getting high margin snake food and cigarettes sales instead.

Thu, 05/05/2011 - 15:02 | 1244206 TruthInSunshine
TruthInSunshine's picture

It's actually true that gas station owners do not profit from the sale of gas, and in fact, many lose money on gasoline/diesel sales.

Most stores are leased, and the franchisor (the oil company), ties the rent to number of gallons sold, and then prevents the franchisee from 'cross shopping' for gas/diesel from anyone but the oil company suppliers.

The franchisee then has to expand convenience, food and other sales to compensate.

I did not junk you.

Thu, 05/05/2011 - 16:00 | 1244786 tarsubil
tarsubil's picture

I've never seen a bank shuttered. I see gas stations shuttered all the time.

Thu, 05/05/2011 - 12:28 | 1243744 pan-the-ist
pan-the-ist's picture

All he has to do is point out that the situation in the ME is actually stabilizing.  (Not looking for Junks like Hamy, thanks)

Thu, 05/05/2011 - 12:31 | 1243762 drink or die
drink or die's picture

By "stabilizing" do you mean "not being reported on as much"?

Thu, 05/05/2011 - 12:35 | 1243768 pan-the-ist
pan-the-ist's picture

Exactly that.

Thu, 05/05/2011 - 12:32 | 1243749 SoNH80
SoNH80's picture

It's the Strategic Petroleum Reserve, meant for use in a serious war, not the "Tatical Pissing In the Wind Wankery Reserve".

Thu, 05/05/2011 - 12:45 | 1243828 duo
duo's picture

I was going to say "Tactical Election Year Manipulation Reserve"

Thu, 05/05/2011 - 13:01 | 1243908 Id fight Gandhi
Id fight Gandhi's picture

Isn't it used for emergencies and wars? And they have the whole middle east in uprising and were going into hurrican season, they should not touch those unless its dire.

Otherwise they'll piss away the reserves and we will have $10 gas.

Thu, 05/05/2011 - 12:39 | 1243753 Texas Gunslinger
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<removed by the administration>

code: 13854

Thu, 05/05/2011 - 12:43 | 1243806 Alcoholic Nativ...
Alcoholic Native American's picture

code: 13854 = Full Retard.

Thu, 05/05/2011 - 12:53 | 1243854 Spastica Rex
Spastica Rex's picture

Wait... what?

Thu, 05/05/2011 - 16:38 | 1245063 knowless
knowless's picture

i can hear you giggling man, this must be really amusing to you.

Thu, 05/05/2011 - 12:36 | 1243755 SoNH80
SoNH80's picture

Dbl post

Thu, 05/05/2011 - 12:50 | 1243843 I did it by Occident
I did it by Occident's picture

Agree, basically to assure the flow of oil if they refuse to sell it.  If they don't sell it to us, then we (the US) will take it by force if it comes to that.  the 8 months gives enough time to take over.  Of course China buying lots of resources in Africa and the rest of the world does complicate that calculus.

  to quote from Dune, "the spice must flow"

Thu, 05/05/2011 - 12:33 | 1243757 augie
augie's picture

"spook" and obama should never be used in the same sentance. Moron, imbacile, tyrant, loving father and husband, terrible basketball player, kenyan, American, or poindexter are all perfectly good substitutes. 


exhibit A:


by Texas Gunslinger 
on Thu, 05/05/2011 - 12:32

I'm from Texas, so racism is all around me, but does this title seem racist?  Or have I been conditioned by my surroundings to think everything is racist?



Thu, 05/05/2011 - 12:37 | 1243790 SheepDog-One
SheepDog-One's picture

Oh, well when I read spook and obama in the same sentence I immediately thought the proper connection, CIA.

Thu, 05/05/2011 - 12:41 | 1243807 augie
augie's picture

Probably because you are not glued to drudgereport 24/7 like some American'ts i know. Cue the moron riding the quad. 

Thu, 05/05/2011 - 12:46 | 1243821 drink or die
drink or die's picture

Have you ever noticed that every conservative radio talk show consists of Limbaugh/Beck/Hannity/etc reading headlines off drudge and commenting on them?

Thu, 05/05/2011 - 13:01 | 1243920 NOTW777
NOTW777's picture

have you noticed that 99% of MSM report directly from the WH script?  state media

Thu, 05/05/2011 - 13:51 | 1244108 augie
augie's picture

it really is two sides of the same coin...apparently  judging by the junks, some don't think so.

Thu, 05/05/2011 - 12:48 | 1243830 AgShaman
AgShaman's picture

Don't forget knowledgeable Chicago White Sox well as deficient in military terminology...particularly Navy medics

Thu, 05/05/2011 - 13:04 | 1243921 Id fight Gandhi
Id fight Gandhi's picture

One thing cool about zh is they let you be politically incorrect.

Thu, 05/05/2011 - 12:33 | 1243759 alexwest
alexwest's picture

will fix in jiffy..


see oil at 40$ in 1 month

Thu, 05/05/2011 - 12:33 | 1243761 Silver Bug
Silver Bug's picture

This will go over, just as how it did with Paul Volcker when he sold a massive amount of the US Silver Reserves. He did this, just as now Obama will sell their oil cheaply to "teach the dirty speculators a lesson". It back fired in Volckers face and it will backfire in Obama's face (Just like everything else does).

Thu, 05/05/2011 - 12:32 | 1243765 Sudden Debt
Sudden Debt's picture

If he says that the government has found a way to turn crap into oil.




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