Storm Cat

CFTC Belatedly Discovers the Speculative Oil Bubble

On Aug 01 11:24 AM jerrydd wrote:

"Personally I think futures should only be sold to those needing to
hedge oil, corn, etc"

And the buyers would be who exactly? If you bar the speculators you'll have an issue here. You can't match end-users and producers without timing & volume issues

CFTC Belatedly Discovers the Speculative Oil Bubble

".... there was no physical shortage of supply (the saudi oil minister said so) .....

That is perhaps the funniest post I've ever read on this site. "The Saidi minister said so: ... LOL , If you believe that you are a complete moron.

Speculators Stabilize Oil Prices: Here's Proof

"Help do your part to lower energy prices. Take action by visiting by StopOilSpeculationNow.com"

I am sad that you are not a believer in free markets

Speculators Stabilize Oil Prices: Here's Proof

"The CFTC has granted Wall Street banks [like Goldman Sachs] an exemption from speculative position limits when these banks hedge over-the-counter swaps transactions.

Right. The exemption was granted to permit banks to hedge the transactions they enter into with Oil & Gas companies (who are hedging production). Why should a bank's hedge of such a transaction be included as a speculative position when it is plainly "Commericial" in nature.?

I do agree that classifiying a bank entirely as "commericial" yields inaccurate data because they do also take speculative positions. However, the broad brush you are using overestimates the magnitude of the distortion.

"The really shocking thing about the Swaps Loophole is that Speculators of all stripes can use it to access the futures markets. So if a hedge fund wants a $500 million position in Wheat, which is way beyond position limits, they can enter into swap with a Wall Street bank and then the bank buys $500 million worth of Wheat futures. "

Except that the vast majority of HFs don't execute a position of such magnitude on a linear basis (ie, long/short). Moreover, banks don't take unlimited credit risk on HFs. Such a position (long/short) would most likely need to be fully collateralized making it cost prohibitive. Moreover, the counterparty would need an ISDA agreement and credit/risk limit approval

" Another example of the effects of speculators in the crude oil commodities market was the “ Rogue Trader” who with a 16 million barrel order of crude, pushed up the price of crude oil $4 in the blink of an eye."

I trade oil for a very large bank. No salesman would execute an 18MMbbl order without insuring it is authorized. Moreover, an order like that isn't executed "in the blink of an eye". It is executed quietly and slowly over the course of one or more trading sessions. Finally, a "rogue" trader can and does happen in ALL markets.

Remember $20 Oil? Looks Like It's Coming Back

"the 20 $ price if it occurs would create great unhappiness among
the people who filled their tankers to the brim & now have them
parked in the gulf of mexico or wherever."

Absolutely false, those tankers were filled with nearby priced oil and hedged with long-dated futures. The profit is locked in. It's called CONTANGO !!

Is It Possible the Current Recession Was Caused by Oil Prices, Not Housing?

I think high oil prices definitely played a role. However, if paying $4.00 at the pump rather than $2.00 caused you to default on your mortgage, you have way too much leverage. Individuals in this day and age have fallen into a culture of instant gratification. "Living within your means" seems to be a lost imperative.

I still believe the driving force behind the current malaise was housing. More specifically, the the packaging and mass distrubution of loans backed by non-creditworthy individuals magnified by huge leverage, poor risk management and less than sufficient regulation/oversight. Of course, punative energy prices exaserbated the problem

Goldman Analyst Expecting 'Swift and Violent Rebound' in Crude Oil Prices

Dave Enke (the author above) can't even read correctly. The bloomberg article to which he refers quotes Goldman as expecting a rebound "in the SECOND half of the year" not 1H09 as Enke states.

The energy articles on this site appear to be written by individuals with very little energy expeience.

Goldman Analyst Expecting 'Swift and Violent Rebound' in Crude Oil Prices

"Goldman losses billions on commodities"

You really should do some research before you write stuff like this. Look at their earnings, they MAKE billions trading commodities and have the last few years. I listened to the Goldman analyst call. They are looking for prices to decline to $30 and possibly recover at yr end or early next year. Their oil recovery scenario is based on the economy improving.

I'm not a huge Goldman fan. But I don't like when people distort things

Crude Reality: How Long Can Oil Stay Down?

Probably not a lot since there is no oil in that geographic region and the Middle East economies are too oil dependent to really limit production.



On Jan 15 05:50 PM henarl wrote:

> Wow, lots of comments on this subject. Here's one more: Since perception
> is as important as reality to the short term price of oil, how about
> the perception of a possible war in the whole middle east. If Hezbollah
> starts lobbing more rockets into Israel in sympathy with Hamas and
> in an effort to eliminate Israel once and for all (after all, they
> are both controlled by Iran), and then Israel in desperation bombs
> Iran - Hello WW3. What effect do you think that would have on the
> price of oil?

Commodities Volatility Indicate Firming Demand, Rising Prices

Supertanker = 2 MMbbls capacity EACH

Commodities Volatility Indicate Firming Demand, Rising Prices

I almost laughed when I read this story ... the price appreciation we are seeing in crude is nothing more than a technical move ... probably to $55-$56 max... the contango in the market is near historical levels (extremely bearish). Crude inventoroes and approx 33 MMbbls above l;ast yrs levels. Moreover, approx 25 supertankers (2 MMbbls capacity) and being used for storage and 7-10 are in contract for same. Year-on-year demand has dropped 1.55 MMb/d or 7.4%. these are not small issues.

Look at the daily continuation chart. The mkt has dropped from the $147 high last July without any retracement until now. This is a DEAD CAT BOUNCE