The 4-Week Manipulated Move in Oil Prices is Criminal

EconMatters's picture

By EconMatters


No Fundamental Reason for Oil to Move Higher 

When is this country going to say enough is enough and start putting people in jail for this kind of blatant market manipulation? It is obvious that the Oil market is manipulated, oil has gone nowhere for five months because there is no reason for it to go anywhere, i.e., there are a ton of supplies on the market, no Middle East disruptions, Israel hasn`t attacked Iran, huge builds in gasoline products, no jump in demand. 



And yet Oil mysteriously rises $10 in this common period for manipulating markets at the tail end of the year, and the beginning of the new year, let`s juice it up before the contract rollover, no one cares, no one is really looking too closely at what we are doing, everybody is focusing on fiscal cliff issues and the debt ceiling debate.



Another Bearish EIA Report 

So we have another bearish inventory report on Wednesday, and oil refuses to go down, why so they can force it one leg higher, and get other trapped traders to buy their contracts from them so they don`t have to rollover at a huge cost.


Force Stops & Reduce Rollover Exit Costs 

This is why when nobody takes physical delivery prices do not go down an equal amount on rollover, as less than .005% take physical delivery, this way prices aren`t negatively affected after a large amount of money comes into a futures contract in an equally large rollover effect on exiting.


It is because the side which has pumped the futures contract with a bunch of cash, makes the other side who rationally would be short based upon the normal price history and abundance of supplies, has to cover thus buying the contracts from the pumpers in this case, thus avoiding a large rollover effect when they have to exit because the contract ends after a month.


There is a whole art to the manipulating game in the oil market, and the big banks play it quite well. And given how inept congress who has investigated them twice in the last five years every time prices run up and has done nothing, the big banks think they are invulnerable on this issue.


If you haven`t clamped down on us yet, and you cannot even get you own house in order, then there is no way you can figure out how we are manipulating the oil markets.


Trading Records Last 4 Weeks 

But enough is enough, this is blatant criminal behavior, and it is pretty easy to know who the culprits are just pull the last 4 weeks trading records and see who bought large positions the last 4 weeks, while the fundamentals never materially changed in fact they got more bearish as the products` supplies grew at a substantial rate, and there were no Middle East supply disruptions, or strategic hot spots that were in danger of having supply disruptions, nada.


“Asset Class” Euphemism for Roulette Table 

Prices are not determined by the fundamentals in a manipulated market they are determined by oil being an “Asset Class” which is code word or a euphemism for giant Casino in New York instead of Vegas.


So we cannot legally play poker online in this country, but you can pull up your internet connection, and place your wager on the price of oil, such hipocracy in this country.  The price of oil, and as such gas is determined not by supply and demand factors, but by whether Goldman Sachs or Morgan Stanley or J.P. Morgan puts $400 million on Black or Red, the literal Oil Roulette game of the big banks.


If Goldman Sachs puts $400 million on Black prices go up, if they put $400 million on Red prices go down, as simple as that, this is actually how the price of oil is determined, nothing more and nothing less.


Market Correlation & Wagering Strategy 

Furthermore, Goldman Sachs or Morgan Stanley doesn`t factor in how this aligns with the fundamentals of the market, they don`t care, they more care about how putting $400 million on Red will affect their other manipulated market the equities market, as the equities market has a lot of oil and gas components in it.


Thus they do think somewhat strategically, i.e., they try to align their betting strategies, so when we put $400 million on Red, let`s pick a time when we are going to sell off the S&P 500 as well. This is why markets are so correlated even when one is a commodity that consumers put in their car, and has supply and demand issues, where the other is purely an investment vehicle.


Betting Reports & Market Collusion 

So Mr. Consumer the next time gas prices go up, and they will for the next month as retail prices catch up to the manipulated move in the futures market, just realize that Morgan Stanley decided to put it on Black this past month, and when your prices go down, praise the alter of J.P. Morgan as they decided to go Red that particular month.


And it is always coordinated; you never have the big banks putting on Black and Red, thus trading/wagering against each other. They will all come out with their Betting Reports, I mean Research Reports designating the myriad of market conditions as to why they decided to put the cash on Black versus Red this month.


CFTC: These small fines are a joke! 

The real reason for market selloffs in Oil is usually due to the occurrence that the big banks are going to sell off equities in the summer, late April anyway, so they start selling off oil as well, i.e., $400 million on Red! Such a scam, such a rigged market, this is getting so old…..where are the regulators?


 I don`t want congress to have more hearings on the subject, I want the governmental organizations who are tasked with monitoring this bullshit to start investigating, and shutting trading shops down for this crap!


EIA Reports: Why bother? 

Why even continue this farce of having EIA reports anymore, they are completely irrelevant to the price of oil, and oil continuously goes the opposite way of the reports, why even bother with this government agency, it is not like the history of the market the last five years tracks the fundamentals of supply and demand.




Government Agencies & Regulators at their finest 

Let`s just save some more tax money and shut down the agency, at least consumers will only be getting screwed by wall street traders. And while we are at it lets just abolish the SEC and the CFTC, as they are completely useless. Furthermore, since all markets are ripe with manipulation, essentially the wild-west; why not reduce government costs by cutting funds to these two agencies entirely.


They serve no real purpose when markets are corrupted everyday with Fake Orders, Dark Trading Pools, High Frequency Trading Algos, and the like except to further government costs & bureaucracy while strictly providing the illusion of fair markets. These organizations are a complete joke, and have been for decades!


The Cheating isn`t even hidden anymore 

Literally the CFTC only has to pull up a trading Dom watch it for five minutes and watch all the flashing fake large orders that appear and disappear as price reacts to their presence to know that these markets are infested with manipulation termites. They obviously purposely look the other way, or avoid looking at all!


OPEC points to a Manipulated Market 

Americans have it all wrong, you are not being held hostage by the middle east, or the cartels like OPEC, it is the Big Banks Cartel, let`s call them the Roulette Cartel that is holding the American and World consumer hostage, and this crap needs to stop.


Even OPEC realizes this manipulation, and they have publicly stated many times it is the speculators that are determining the price of oil. But they use too kind of a word, because these are just a bunch of Vegas style Roulette players with deep pockets who unlike Roulette have no risk because while there is randomness with a slight edge to the casino in Las Vegas, the Oil Roulette table of the Wall street banks never have a losing quarter, shoot they very rarely have a losing day, and it is hard to ever lose when you’re the ones moving the market.


Wall Street Mansions don`t build themselves 

Consumers realize when they gamble in Las Vegas that those casinos are not built by them winning, but they probably don`t realize to the extent that those Hampton and Connecticut mansions are being built through the sacrifices of consumers at the pump.


Yes, there have been 30 million barrels added to gasoline supplies over the past 6 weeks, but you are charged 30 cents higher in the futures market, and these prices will be coming to a neighborhood near you.



Are You Kidding Me? 

So let me get this straight, the gasoline market went from a tight, to a well-supplied market in six weeks, and consumers are going to be punished 30 cents more for this ridiculous build in more supplies? All these gasoline supplies are building in storage because there is not enough consumer demand for the product, and prices are going substantially higher not lower?


This is the exact opposite of how efficient markets are supposed to work in a non-rigged market, this very fact, should be a wake-up call for regulators. Hello CFTC, what is going on in the gasoline RBOB market? Do you think you should start investigating, you do exist for a reason, there is a blatant, clear cut case of price manipulation in the RBOB gasoline market, now get to work and do your job!


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gasandoil's picture

EconMatters and others here are missing the biggest fundamental of all. Drumroll..., forget what you think charts are showing on supply/demand. The rising wti price is simply due to spread closing on WTI and Brent. That should be expected with Seaway restarting at 400,000 bpd next week. Of course every shipper wants oil parked at Cushing in anticipation of this Seaway pipeline that just happens to be the biggest crude outlet at Cushing built in past 60 years. Historic spread of WTI/Brent has been around $1 up until two years ago. That is all I can say for now. Read more under "energy transportation" tab at

tempo's picture

Oil is priced in world markets with demand still rising due to increased consumption in China (5 to 10 to projected 15 MMBOD).   even though demand is flat or declining in the US oil production has increased due to fracking about 2 mmbod, which is a drop in the world wide oil market bucket. Iraq's increased production has kept a lid on world prices. Thanks GWB for both fracking and Iraq oil, progressives are so selfcentered that they love to use oil but never think about why prices are down in the US.

ekm's picture


I heard exactly the same thing during the run up of prices until June 2008, before the fall into the abyss.

Flakmeister's picture

Would you like to comment on the graph of world net oil exports since 2005? Are you aware of the Export Land Model?

Or a chart of OECD oil production, i.e. the stuff that "free market" controls...

Dig around for data, you might surprise yourself...

Edit: Here I will get you started with the OECD: 

I can point you to water, but it is your choice whether you wish to drink...

ekm's picture

The government/Fed/Primary dealers are buying stocks.

They are the ones buying oil also.

Walt D.'s picture

.. even Paul Krugman gets this right. If you don't agree, answer Krugman's question? Time for a new video game - "Where in the World is the Excess Oil Supply?".

Even more idiotic is the notion that oil future prices on the ICE exchange (which has no provision for delivery) can influence the price of oil. This is like claiming that you can influence the outcome of the Super Bowl by placing large bets in Las Vegas.

marathonman's picture

So let's see - Obama  administration tries to cut US oil production after the BP Gulf spill, torpedoes the Keystone XL keeping Canadian syncrude and US mid-continent crude bottled up, destabilizes the Middle East, devalues the dollar so that oil prices have nowhere to go but up.  These are all market supports.   Someone in the oil industry could think, hey this Obama cat is not so bad.  Besides with the US devaluing the dollar all that gasoline and diesel is also fungible on the world market and could be a real bargain to country with a modicum of monetary sanity.

Market Analyst's picture

looks like some cockroaches didn`t like the light being shown on their little scam, RBOB all the sudden sells off big, compared to lately, brent down as well....a bunch of scumbags............if nobody ever points out there dirty little tricks they will rob you wherever they can, just an absolute bunch of scumbags!!!

How big a mansion do you need David Tepper?

aint no fortunate son's picture

Gee golly, why is it that when I hear "market manipulation" my thoughts immediately jump to Jamie. Hmmm, now why is that?

Downtoolong's picture

Someone is probably getting squeezed on the short side by someone with access to a lot of cheap capital and influence in the paper markets. Gee, I wonder who that could be?


d_taco's picture

Yes it is manipulated. The whole marked is bound to Brent, a very small and declining physical market that is ideal for being manipulated by big oil suppliers.

But high prices means high supply and low demand. And somewhere this will break.

The EU already lowered its export duties to South Korea to get the oil flowing and now it seems Russia is doing the same. While  Nigeria is not able to sell its oil anymore. We are bound for a real market crash.

Traders operating in the oil markets that deal with Nigerian crude have announced that at least 21 Nigerian crude cargoes, 31 percent of output, which will be ready for loading in February, still remain unsold

GCT's picture

Never invested in oil as a commodity.  But trending it we usually see price hikes the colder it gets up North.  Indeed a crazy world we live in.

BlackVoid's picture

Without high oil prices, marginal resources like shale, will stop producing.

Oil is also a world-wide traded commodity, looking just at US stockpiles will not tell you much about supply and demand.

Mainpulated or not, high oil prices are a neccessity for continuing investment. So be happy that it is expensive and still available. It is better than cheap and out of gas.

ak_khanna's picture

The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players.

The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.

The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls


When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.

IamtheREALmario's picture

It is not just oil. It is everything. ALL markets are inundated with fraud, theft and manipulation these days. Has it always been so and we just now realize it? It is true that we have been fed the line of bull about walls of worry and how the public always gets it wrong ... which means that price IS MOVED in the opposite way of sentiment and fundamentals INTENTIONALLY and maybe always has been.

Maybe the markets run by Wall Street and its predecessors have always been criminal theft machines run by a criminal people. When there are no more slaves to fleece then what will they do? I think we are seeing it. No wonder the criminal Corzine was not prosecuted. He was just stealing money in the normal Wall Street way.

kurt's picture

Hey Oil Company! Stop dry humping my asshole.

“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

Round up the usual suspects.

We live in a kleptocracy acting under direct orders of banksters,crony capitalists, corporate tit suckers, and elected officials exhibiting sociopathic/psychotic behaviors.

Any trader consistently making big money is most likely paying someone off somewhere.

This broad based, highly orchestrated market manipulation will stop only when those guilty get punished...

Good luck with that!

d_taco's picture

You right but here is the prove:

The biggest up-swing was second christmas-day (When most traders are at home) oil moves from 108.23 to 111.45 nearly 3%.

Second Christmas day (26 dec) oil moves up a whopping 2.7%!!!!

steve from virginia's picture



Wow! EconMatters woke up this morning and discovered there is manipulation in finance markets.


What took you so long?


Meanwhile, at what price level do you think an 'honest' crude market might set? $50 per barrel? $20? Americans have an ingrained sense of entitlement ... to cheap, unlimited gas, that they can burn up for pleasure.


Here are a couple of things to keep in mind:


 - There are a number of ways to define Peak Oil. Peak Resource was in 1857. Cost per capita 'peak' was in 1970, as was peak US crude extraction. Peak discovery in the US was in 1930! Peak discovery world-wide was also in 1970. There are other definitions. The conventional concept is peak rate of flow for conventional crude (ex- biofuels, bitumen, refinery gains, nat-gas liquids and coal-to-oil, incl- 'sour' crude and tight oil). Some analysts suggest this occurred in 2005, others put this occurring in 2015. Availability relative to demand -- determined by price -- puts peak oil occurring in 1998. This is the benchmark I use. The timing explains our economic unraveling very nicely. Users don't care about flow rates across industries, only cost.


We inhabit an immediate world of present-expenses and present means to meet them.


 - Crude oil will include a) material cost of extraction and permissions, b) credit cost to gain the crude, c) scarcity premium. Keep in mind, the real cost in BTUs for a barrel of crude oil is grotesquely mispriced. If priced in human labor equivalent a gallon of gasoline would cost $1,500! Right now, externalities are excluded from the price. Permission costs are suppressed, that is, acquisition is limited to lease expense and royalties.


The price is going to rise, this is supply and demand at work. Demand is 'sticky' due to automobilization of China, Russia, India and the Middle East.


 - The scarcity premium is increasing/has increased (since 1998) at some point the cost becomes too high for customers to meet. Fuel is rationed by price (access to credit): later there is rationing by declining purchasing power (credit denied). Purchasing power becomes a vicious cycle: it falls faster than prices. Any price -- no matter how low -- is still too high.


 - There are currency implications that I won't get into here ...


Get over it Mr Analyst Man! Fuel prices will drift farther out of reach as credit access/wages/jobs/benefits decline. The world is going broke! Crude we are counting will be stranded in high-cost reservoirs. Both suppliers and their customers will go out of business. There will be physical shortages and these will be permanent. 


Permanent as in 100 million years.


You've been warned. I'd get rid of that car if I were you ... while there is a sucker out there who can pay for it.



IamtheREALmario's picture

That is just a bunch of B/S... It is one of those B/S rationalizations that Wall Streeters use to defraud the public and justify its crimes... and either you fell for it or you are spouting the criminal party line.

Flakmeister's picture

Are you capable of objective reasonably deep abstract thought?

pfairley's picture

I rated this at ONE, Poor. Calling things corrupt or manipulated  doesn't tell us anything. An exploration in more neutral mathematical terms would begin to give us a clue but point to more complexity than simplistic moral terms like 'manipulated'...that go on and on to nowhere.  

casfoto's picture

We are being run by criminals. The whole country run by sociopathic criminal elements. No wonder they want gun control. Most people are buying guns because they are afraid of the government, banking and business, not petty theives. There is a paranoia running rampant stoked by these sociopaths on the top rungs of our society....


q99x2's picture

NWO typically ramps the oil prior to a market correction.

Elvis is Alive's picture

The problem started in Washington. The banksters paired with Enron and made it illegal for the government to even monitor oil futures trading (AKA oil prices). This bit of bs was bipartisan, Robert Rubin Dem and Phil Gramm R. These two were paid their collective millions for shafting the consumer by Citi and UBS respectively. Front running, insider trading, and screwing over your customer, things that are supposed to be illegal in the stock market, are totally legal in the commodities markets.

And so we had the $147 a barrel run up in oil in July 2008 due to Goldman Sachs squeezing the shorts of Semgroup. That is technical and difficult for the public to get, but there is a far better example that the public can get. 

On June 30, 2009, a British trader named Steve Perkins saw his beloved football team lose and he drowned his sorrows with a few pints. He then happened upon his trading terminal, and in two short drunken hours he singlehandedly managed to push the price of oil up worldwide by $1.50 a barrel. His ale inspired trade cost his company $10 million. 

Mr. Perkins was let go, and he applied for job as head of the CFTC but he was found to be overqualified. So rumor has it that Mr. Perkins is headed for a job more suitable for his skill, running to be a member of the British parliment. 

Flakmeister's picture

Elvis may be alive but he is one dumb fuck if he believes the above is anything but noise on an underlying immutable trend...

And here is a sample of the underlying trend from this week:

High costs threaten Norway's oil recovery

STAVANGER, Norway, (Reuters) - Oil production in Norway, the world's eighth-biggest exporter, will fall to a 25-year low in 2013 and an anticipated slow recovery in subsequent years is threatened by rising costs and bottlenecks, energy authorities said.

Production will fall to its lowest level since 1988 as fields, particularly in the mature North Sea, become depleted and a slew of new developments need more time to come onstream, the Norwegian Petroleum Directorate (NPD) said on Friday.

Still, record investments, big discoveries, high oil prices and a decisive move into Arctic waters support the industry's optimism, underpinning expectations that production will start to recover starting as soon as 2014, the NPD said.

"Not long ago we were talking about the industry's sunset," NPD chief Bente Nyland told a news conference. "Things have changed fast... there is now enormous optimism."

Hohum's picture

You do know that oil crude inventories decreased 11 million barrels this week, right?

Market Analyst's picture

facts are a bitch aren`t they:)

Market Analyst's picture

uh, prior week due to tax purposes, last week build:

Demand data in the weekly petroleum report are soft, contributing to a run of builds in the January 4 week. Oil inventories rose 1.3 million barrels to 361.3 million and remain extremely heavy, classified as well above their upper limit. Very large builds were posted for both gasoline, up 7.4 million barrels, and distillates, up 6.8 million. Inventories for both products, especially gasoline, have been building sharply in recent weeks.

Data on wholesale supplies, which offer the demand side look in this report, show declines for both gasoline, where supplies are down a year-on-year 2.3 percent, and for distillates, down 5.0 percent year-on-year. Oil is down 50 cents to $93 in initial reaction to today's report.

BaggerDon's picture

Maybe the Iran attack is coming this weekend????

swabeyjw's picture

If you are right. You have found a new definition for TBTF.

Why can I not get someone to rub my back? Just remembered, my mind keeps drifting from the topic of war.

Blue Horshoe Loves Annacott Steel's picture

So, do people still think the USA is a capitalist country?

Slowly but surely, the USA becomes Sovietized.  Does anyone know what happens to a fully centralized economy that is noncompetitive?


max2205's picture

Pair trades are fucking everthing. Uso slv fb aapl ect

Elmer Fudd's picture

What isnt centrally controlled for the benefit of a criminal class these days?  To think I'd live to see these days, and I aint that old.

KansasCrude's picture

What a bunch of fools....WTI is B.S..  Cushing Pipelines reversed and capacity for more to the Gulf and WORLD PRICING.  Result the Canadians are taking the U.S. price rape out of their ass Canadians are losing money and therefore cutting drilling crews massivley due to the WTI price plus the added big discount screwjob by the U.S. refiners.  WTI has to move up to the world price or no one will continue production growth with WTI below the cost of production much less continue to sell against it.   Yes the pricing is manipulated DOWN. 

Cheap gas PARTY winding down. 

trendybull459's picture

Don't cry for me Argentina" was right message from Madonna to guys like you,oil production costs is from 16-to 43$,get NG if oil more expensive to blow off and od not be duck,Earth blood is too expensive,while Iran has it on plate under their airport,thats why americans want it-95-16=89$ clean earnings

Racer's picture

We need to get back to the real  original reason for a real market... to trade real things, not fake make believe derivative upon derivative upon... many times over... derivative only not to take delivery or have the faintest thought of wanting delivery.

To trade you need to show intent... and need ...and not be able to cancel fake trades at many thousands of a second

trendybull459's picture

I give you simple stuff of energy issues in Mongolia,there is PCY.TO company,I was back in Mongolia in 2006 in coal openm pite mine,managment building energy plant to produce the electricity while it has 1.4bln ton coal HQ,Russians put restriction to deal for its companies with any company making business with China,mongolians on itself had put tax on coal sold out:35$ per ton.Question:how being coal operator in Mongolia to sell coal at profit while you have extracting costs of 15-20$ and sell it 25$ per ton and do not let others to rework your licences?

Answer is:build electricity grid to continue survive in current invironment in hopes to sell later your coal in form of electricity.Hope many of us knows many similar stories from confiscation by governments deposits of companies till to considering 10-12years research of some companies to be false in own 2-3weeks research attempt while you are governmental organisation trying to get big piece of the cuccessfull company builded big gold recourse in USA.Its a fight for power between governments and business,after fight with private investor ended by its rub and death!Learn,King(government) is naked,the only thing it can do is to rob you into death!

rsnoble's picture

There is no manipulation the last 4 weeks.  Learn to read a fucking chart. Around 4 weeks ago the oil charts were at strong support levels.  I trade oil. Do you fucking think I care how much of the shit is floating around?  Time and time again when prices reach certain support areas mega shitloads of traders will pile onto the trade.  This is nothing more than traders driving up the price.  End of discussion.

Market Analyst's picture

You obviously don`t care with the "shitload of traders" about people paying much higher gas prices because of scumbags like you!

Taking pysical delivery would get rid of parasite leeching scumbags like you, Futures markets were invented so that producers could hedge production, i.e., insurance, and actual users could take physical delivery. Scumbags like you have corrupted the whole purpose of futures markets, this is what needs to be cleaned up by regulation.

rsnoble's picture

Then you should be really flabbergasted to know that's how it works with the entire stock market.  90% of big money traders play off price levels.  It's not oil, it's a chart with past performance.  To make things fair  the next time you want to buy a stock, say Apple, then let's pass a law that says you can't buy it unless it's for a price over $600. LMAO.

The only reason something isn't done about it is because connected people are making huge$.  If they want to do something about that's fine ill concentrate on something else like shorting all your longs.

ceilidh_trail's picture

?Market analyst? - People like rsnoble and myself help keep the market liquid by absorbing risk that others wish to shed. Don't be such a wuss. Maybe go to school and learn how to be a real analyst and not just an avatar. Futures markets are as you said- to allow participants to hedge. Hedging is another way to say "risk spreading." Hedging is a 2 way street- ie, the counterparty is not there to be a nice guy but to make some money. If you think or wish otherwise, you are wrong. Get it?

Market Analyst's picture

 I trade oil. Do you fucking think I care how much of the shit is floating around?

 This is nothing more than traders driving up the price.

You just adequately described a 'manipulated market"! Congratulations, people like you are part of the problem with this country!

rsnoble's picture

Does the avg person care about how many iphones are floating around?  By your logic anyone buying anything including a bag of cheetos is a manipulator.



JamesBond's picture

the article states, "... criminal"  without listing the laws that are being broken.



Tekrunner's picture

Uhhh, no, actually, that's the definition of a free unregulated market, where anyone can do whatever they want, including artificially driving prices up or down.

oilman8864's picture

Saudi Arabia can't sell $90 oil to us anymore. They need $390bn to balance their budget. So they have a choice. Either shut down trade in dollars or buy futures on the forties. WTI is going up because there's no sense selling oil for $90 now when you can sell it for $200 in a few years. 

You people need to take the aluminum foil off your heads and get a life. 


trendybull459's picture

USA do not need Saudies any more,they sell own oil to China while isolated Iran,you pay for it.May be China buys oils at 80$ while you keep purchasing at 95$,soviets had do it,current russians do:domestic market covers output sweetens

Bullwinkle Moose's picture

If it was truly a free market, I'd say hooray for free markets.