Goldman Says Demand, Not Speculators, Behind Oil Gain, HMMMMMMMMM

Discussion in 'Wall St. News' started by S2007S, Jun 30, 2008.

  1. S2007S



    Goldman Says Demand, Not Speculators, Behind Oil Gain (Update1)

    By Alexander Kwiatkowski

    June 30 (Bloomberg) -- Goldman Sachs Group Inc., Wall Street's most profitable bank, said supply and demand, rather than speculators, are responsible for oil's rally.

    Fears that the rise in oil prices are part of a speculative bubble are ``unwarranted,'' the bank said. There would be an increase in stockpiles if prices were too high relative to supply and demand, bringing excess supplies to the market, analysts Jeffrey Currie and David Greely said in a report yesterday.

    ``We are not observing anything approaching sustained growth in physical inventories,'' the report said. ``Current prices are supported by supply and demand fundamentals. The commodity markets are not behaving in a way that a speculative bubble would suggest.''

    Crude oil, headed for the biggest six-month gains since 1999, rose to a record high above $143 a barrel today. The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world's oil, has said it is powerless to stop oil's rise because it's driven by speculators as opposed to demand and supply.

    Goldman, one of the two biggest oil traders on Wall Street alongside Morgan Stanley, said on June 17 that revenue from trading commodities rose in the second quarter.

    The firm doesn't provide any separate figures for the business, reporting it under the category of fixed-income, currencies and commodities. Revenue in this broader segment fell 29 percent to $2.38 billion in the second quarter because of credit market losses.

    Emergency Powers

    The U.S. House of Representatives last week approved a bill calling on the Commodity Futures Trading Commission to use its emergency powers to ``curb immediately the role of excessive speculation'' in any market it oversees where energy futures or swaps are traded.

    ``It is not speculators moving the market, it is the information on forward supply and demand fundamentals that they are conveying,'' the Goldman Sachs report said.

    The removal of speculators from commodity markets would force the market ``to function with less informed views, degrading the price discovery mechanism,'' the report said.

    Crude oil for August delivery rose as much as $3.46, or 2.5 percent, to $143.67 a barrel in electronic trading on the New York Mercantile Exchange. It was at $142.17 a barrel at 1:14 p.m. in London.
  2. Again....the police policing the police....

    Too funny.....
  3. doli


    Truth is, it isn't speculators that have driven up the price. It is INVESTORS -- COMMODITY INVESTORS, imagine that! -- who are driving up the price.

    Great word games going on.

    What is the difference between a speculator and an investor in 25 words or less?
  4. go to hell gsco
  5. None. Investor is just another class of speculator.
  6. Bullshit.

    I can guarantee you its Goldman buying CL shorting Indexes.
  7. I believe so too..

    Paulson and the forces within really need to put a halt to 200 dollar talk.

    DIG volume was swamped by DUG volume today
  8. What bullshit. The only thing the inventories and this price prove is that demand is unit inelastic. And in that same line of reasoning, crude could be $40 if sentiment were opposite with the same inventory situation.
  9. Scriabinop23 wrote...

    What bullshit. The only thing the inventories and this price prove is that demand is unit inelastic. And in that same line of reasoning, crude could be $40 if sentiment were opposite with the same inventory situation.


    Excellent Commentary, Scriabinop23.....


    The major inelastics....






    Anyone venturing to form any sort of broad based controlling tactics with regards to any of the above do deserve some form of regulation.....

    If there ever was a time or use for government would be in regard to inelastics......

    Otherwise ....what is regulation really for ?

    Does anyone really think that laissez faire should apply to these inelastics ....?
  10. Any thing could happen...but Longing it is nuts

    it will take a world disater for it to north...well it that happens...what will do with your Oil? it?
    Recommended shorts
    120.60438 102.83881 for a few weeks Into the drop for 40 Bucks

    next 15 days
    expected 3 day sma..USO


    Next 10 weeks
    3 week sma

    #10     Jul 1, 2008