CFTC Report Blames Speculators For Oil Price Swings: Duh

Discussion in 'Economics' started by ByLoSellHi, Jul 28, 2009.

  1. I remember a ton of people here rejecting the conclusions of Masters and his testimony to the U.S. Congress.

    It was painfully obvious to anyone at the time who had their eyes open that speculators were the catalyst for volatility of oil prices, as Goldman & their ilk put on long oil trades, while simultaneously rigging terminal manifests, and hiring supertankers to store oil offshore, ensuring t would never reach the Cushing, OK terminal (and others).

    That episode in American History, where speculators rigged prices, and the free market was 'dissed' (i.e. natural supply & demand pricing was thrown out), severely damaged the U.S. economy, with oil peaking at $147 per barrel.


    http://www.portfolio.com/business-n...lames-speculators-for-oil-price-swings-report

    CFTC report blames speculators for oil price swings: report
    Jul 28 2009 1:28AM EDT

    (Reuters) -
    The U.S. Commodity Futures Trading Commission (CFTC) is planning to issue a report next month that suggests that wild swings in oil prices were significantly driven by speculators, the Wall Street Journal reported on its website on Tuesday.

    A 2008 report by the main U.S. futures-market regulator that attributed oil-price swings primarily on supply and demand was based on "deeply flawed data," Bart Chilton, one of four CFTC commissioners, told the paper in an interview on Monday.

    The CFTC did not reveal preliminary figures from the report to the paper and declined to discuss the previous data.

    Reuters attempts to contact the agency outside regular U.S. business hours were unsuccessful.

    The CFTC will hold the first of three hearings on Tuesday to consider whether to limit holdings of energy and agricultural contracts and whether some traders should be allowed to exceed so-called position limits.
     
  2. It was long-dated speculative funds, tho. Not day-traders.

    Day-trader impact on open interest (EOD @ Cash) is net neutral.

    Mostly hedge funds, commercials, investment banks that bought and held long.
     
  3. Absolutely.

    It was right about when institutional money came pouring in, such as university endowment money and mutual fund money, at crude 125+, that the top was near.

    But yes, they were buying long duration option contracts, and the truly clever were ensuring the leveraged amount of oil they were tying up would never be delivered or even allowed to be counted in the inventory.
     
  4. what's the significance of the oil contracts not being counted in the inventory or never being delivered?

    besides just pushing up the price
     
  5. its not just oil ... and these wild price swings surely must be wiping out alot of small specs trading against the tidal waves

    :eek:
     
  6. I believe the contracts traded on the exchange were tracked, but the oil that wasn't physically delivered to a terminal, where inventory data is collected, is what affected price.
     
  7. ..............................................................................

    The damages caused by the GS,MS, and the "Harvard Kings" Ilk were/are extremely damaging to the non-oil developing economies....

    When the govt. was looking for reasoning ....there were no volunteers from the guilty ....

    Monkey no see what monkey do.....

    Blinded (maybe not) by greed....

    .............................................................................................

    Food, fuel....the elementary basics of survival must be watched....

    As usual....greed only "ruled and rules" the day....
    .............................................................................................

    What the real opportunity is ....would be to establish a non- gameable direct access exchange which would include all securities asset classes .....This is a glorified label changer and should be run more like a phone company line "utility"....with solid wiki style information....and relevent regulations....

    Watch what Gensler from GS does...very closely....
    One can already guess....there will be admission....and there will be biase/leeway given to the GS Ilk ....the reason being "trading will move to a different jurisdiction"....

    Changing from the Bush day's innocent to Bama day's guilty is of no surprise....but do not expect any meaningful change....as the "Harvard-GS" Kings will give it "legal twist".....

    Never ever trust their Ilk....

    They will just overdose you with their "legal largesse" capabilities that no one else is in a position to fight....either by time, know how, or finances....

    F' m....just maybe one day someone will even the playing field....

    ............................................................................................

    One view to solve a problem is to view what has changed....

    Normal speculation that was present before....is normal....and cannot be causal....

    It is the part that changed that should have been obvious....and was obvious to those who are relevent....and remained silent when solutions were sought....

    Like a "brat kid" stealing candy....

    F'M big time....
     
  8. AS USUAL:

    NONE OF YOU BRAINIACS SPEAK ANYTHING OF *WHY* A SPECULATOR (Large or small) WOULD BUY A BARREL FOR $145.

    ???

    ISN'T THAT A FUNDMENTAL QUESTION?


    STRAIGHT OF HORMUZ ANYONE? BELLICOSE MANIACAL LEADERS IN USA & ISRAEL?

    THAT WOULD CAUSE OIL TO SURGE TOWARDS 150.

    THINK ABOUT IT.
     
  9. fhl

    fhl

    ....and still people think that today's supply and demand should determine what people are willing to pay for a commodity like oil six months from now.

    Little things like possible wars, the debasement of the dollar and such shouldn't have an impact on the price, because it's just too important to our economy. (canned laughter)

    When the fed guns the printing presses and nuts build nukes in the middle east, guess what? There .....will.....be......implications.
     
  10. .............................................................................

    1000% Correct !!!!

    Normal speculation and its tools are not causal....

    What changed with regards to "normal speculation" is extremely easy to identify and isolate....

    By the way....who set up the dollar oil hedges ?

    Did this exist in this past ? How did this aspect of oil prices change ? Who did it ?

    Or was it magic ?
     
    #10     Jul 28, 2009