US Senators Unveil Plan Curb Oil Futures Speculation

Discussion in 'Wall St. News' started by Daal, May 9, 2008.

  1. Daal


    This could get really ugly in five years

    "Stop Market Price Speculation – The Administration’s failure to regulate the oil futures market has lead to exorbitant speculation. The Consumer-First Energy Act establishes two key limitations on speculation. First, the bill prevents traders of U.S. crude oil from routing transactions through off-shore markets to evade speculative limits and sets forth reporting requirements. The bill also requires the Commodities Futures Trading Commission to set a substantial increase in the margin requirement for all oil futures trades, contracts or transactions. Recently, one oil company executive indicated crude oil prices could be inflated due to speculation in the futures market."
  2. Unfortunately, while it seemingly contains some nice ideas (like the prevention of excessive speculation) it also has too much crap in it to pass. Unless there's the ability to line item veto.
  3. Pretty sad. Whatever these dip shits to will most likely backfire and cause the price of oil to rise.

    The democrats are so enslaved to the green's and the people that vote for them are so stupid the root of the problem will never be addresses.


  4. More useless legislation out of Washington D.C. that does nothing but make the problem worse. Oil is global market so driving traders out of the US market with increased margins does nothing but drive the trading volume overseas. Why don't they stop driving up the budget deficits and control spending and support the USD. That would go a long way in controlling inflation and the price of oil. What a bunch of bums!
  5. Stand Up to OPEC –

    I thought it was Carter who was instrumental in the formation of OPEC.
  6. The immediate oil price movement versus the dollar is due to the ability provided in the futures contracts, or you would not be seeing immediate price responses.

    The clientele effecting these hedges are largely served by US firms, which have invented these capabilities.

    However, if the dollar were to rise against other currencies, which could be caused by a rise in interest rates, oil prices would drop rather dramatically.

    In short, the oil welfare states have effected hedges through futures contracts through US firms versus declines in the dollar.

    Also the leverage in hedge funds are being rewarded by continually locking in gains in the cash versus futures and other derivatives, which help to provide a paper demand floor for prices. If this ability was removed, speculation by these levered positions would drop like a stone.

    Thus a rising dollar, and a reduction in these paper demand derivative tools, would be very effective in reducing the dollar denominated price of oil.

    Actual demand has not risen relative to paper pricing, and in other stronger currencies that have risen vs the dollar, oil price changes have not been as much of an issue.
  7. Daal


    thats true. raising margin requirements might temporarily help knocking $25 from crude by killing the momentum guys but then what?taxing oil companies and yelling at the guys on nymex wont increase supplies from declining fields in mexico,north sea, kuwait, russia and saudi arabia
  8. well one thing is certain,


    of money to purchase oil and oil products is drying up at a horric pace,

    what this has done is kill the consumer's ability to consume these products,

    so, whether this time worn arguement of do nothing else things will get worse, continues to be made, in favor of letting the market set price...

    is having its desired effect..

    simply put, without regulation, capitalism is far worse than most other forms of economic development...

    after all, when the Bolsheviks revolted, what did they revolt from?, hmmm

    similar market based conditions...
  9. vince111


    They didn't fail.

    monkey don't see monkey don't hear.

    the worlds commodities are set in the United States scam markets CBOE and NYMEX

    everybody getting ripped by wall street crooks.

  10. So let me get this straight. ALLLLLLLLL these years our commodity markets were the worldwide model for finding an equilibrium price level for ags, metals, energy, etc. and the best price discovery mechanism that exists.

    NOW all of a sudden the shit don't work? :p

    These politicians should go back to their hookers and gay sex and leave the financial/fut markets alone.
    #10     May 12, 2008