The Blame for $135 A Barrel Oil
This is how a $15 a barrel commodity becomes $135 in less than seven years.
Traders call futures contracts "paper oil": the contracts are a paper claim against oil,
which is far in excess of the volume of oil produced and actually delivered at oil terminals on behalf of those contracts.
The definition of leverage...
In 2004, open contracts for Brent Crude Futures on the IPE exchage exceeded total annual production by a ratio of 3.41 to 1.
Also, total annual barrels controlled by contracts exceeded annual production by a ratio of 212 to 1.
From the obvious mathematical ratios and pricing LEVERAGE represented above,
it is readily apparent that OIL PRICES ARE MANIPULATED BY SPECULATORS, nothing more, nothing less.
Follow the money... the biggest oil derivatives traders which run trading on the IPE include:
Barclays Capital, Bear Stearns International, J.P. Morgan Securities, Deutsche Futures London, BP Oil International and Shell International Trading.
In the year 1990, Leon Hess stated at a hearing held by the U.S. Senate Committeee on Governmental Affairs:
"I'm an old man, but I'd bet my life that if the Merc [New York Mercantile Exchange] was not in operation
there would be ample oil and reasonable prices all over the world, without this volatility."
According to data from the New York Mercantile Exchange: Open interest has been sliding for months...
after the number of outstanding crude futures reached a record 1.58 million on July 16, 2007.
Oil's rally to a record above $135 a barrel came as traders bought crude to cover wrong-way bets that prices would decline.
The number of outstanding futures contracts, known as open interest, fell 8.1% in a week to 1.36 million at the same time that prices rose 2.6%.
Falling open interest and rising prices are signs that traders are buying to exit so-called short positions that would profit if oil fell, and lose money as they rose.
The Commodity Futures Trading Commission said May 16:
In the last year, non-commercial market participants have raised bets on rising prices, known as long positions, by 37% to 263,378 contracts.
Recently, OPEC President Chakib Khelil commented that the market of oil is well supplied and...
He reiterated that prices have hit record highs due to speculators, investors that buy oil to compensate for a weak dollar and geopolitical clashes.
Qatari Oil Minister Abdullah al-Attiyah said "I don't think there is a need for more oil. My customers aren't asking for more oil."
The Qatari minister said recent reports from the International Energy Agency have shown reductions in demand forecasts.
Saudi Oil Minister Ali al-Naimi reiterated the view of OPEC's biggest producer that:
prices had more to do with financial market volatility than fundamentals and declared that the rally is led by investors, rather than a shortage of supply.
Yesterday, U.S. oil executives told Congress that prices should be between $35 and $90 a barrel.
John Hofmeister, president of Shell Oil, pegged the proper range "somewhere between $35 and $65 a barrel."
Hattip to Bloomberg.
The Nattering One muses... pay attention and read those numbers again...
open interest fell to 1.36 million while non commercial contracts grew to 263,378.
This means that open interest from COMMERCIAL contracts
or leveraged hedges the OIL COMPANIES and SUPPLIERS have is around 1.1 million.
Isn't this the fox guarding the hen house?
To inform yourself on how oil prices are completely false and manipulated as well as...
how the urban myth called peak oil is used to spook the herd into higher prices;
see our Peak Oil Cufuffle Series and Peak Oil Redux Series
For $135 a barrel oil you can blame the American public, the White House; Wall Street & The 7 Sisters.
This is what you get for Veteran's and Memorial Day:
$135 a barrel oil for POTUS oil industry and Arab SPONSORS, along with...
our boys spilling their guts in an unnecessary war over OIL RIGHTS, NOT TO BRING DEMOCRACY to the Iraqi people...
but to build an Iraq to Afghanistan OIL pipeline, along which we have constructed 11 PERMANENT military bases to protect it.
HAPPY MEMORIAL DAY$$$$
More to come in Part II.
$130 Oil Justified? No Way
Oil Price Redux
OIL: Demand, Production and Speculation
Peak Oil - The Myth, The Legend, The Fraud
Spreading "Peak Oil" Crack
"Peking" Oil, the Saudis and China
Peak Oil? Not!
Peak Oil? Not! Part Deux
Peak Oil? Not! - Update
Peak Oil Redux Part I
Peak Oil Redux - Part II
Peak Oil Redux Part III
Peak Oil Redux Part IV
Peak Oil Redux Part V
Peak Oil Redux Part VI
Peak Oil Redux Part VII
Peak Oil Redux Part VIII
The Blame for $135 a Barrel Oil
Blame it on Markman's Myopia or The Day They Burned Ol' Dixie Down - A "Peak Oil" Commentary
Another Peak Oil Cufuffle Series
Traders call futures contracts "paper oil": the contracts are a paper claim against oil,
which is far in excess of the volume of oil produced and actually delivered at oil terminals on behalf of those contracts.
The definition of leverage...
In 2004, open contracts for Brent Crude Futures on the IPE exchage exceeded total annual production by a ratio of 3.41 to 1.
Also, total annual barrels controlled by contracts exceeded annual production by a ratio of 212 to 1.
From the obvious mathematical ratios and pricing LEVERAGE represented above,
it is readily apparent that OIL PRICES ARE MANIPULATED BY SPECULATORS, nothing more, nothing less.
Follow the money... the biggest oil derivatives traders which run trading on the IPE include:
Barclays Capital, Bear Stearns International, J.P. Morgan Securities, Deutsche Futures London, BP Oil International and Shell International Trading.
In the year 1990, Leon Hess stated at a hearing held by the U.S. Senate Committeee on Governmental Affairs:
"I'm an old man, but I'd bet my life that if the Merc [New York Mercantile Exchange] was not in operation
there would be ample oil and reasonable prices all over the world, without this volatility."
According to data from the New York Mercantile Exchange: Open interest has been sliding for months...
after the number of outstanding crude futures reached a record 1.58 million on July 16, 2007.
Oil's rally to a record above $135 a barrel came as traders bought crude to cover wrong-way bets that prices would decline.
The number of outstanding futures contracts, known as open interest, fell 8.1% in a week to 1.36 million at the same time that prices rose 2.6%.
Falling open interest and rising prices are signs that traders are buying to exit so-called short positions that would profit if oil fell, and lose money as they rose.
The Commodity Futures Trading Commission said May 16:
In the last year, non-commercial market participants have raised bets on rising prices, known as long positions, by 37% to 263,378 contracts.
Recently, OPEC President Chakib Khelil commented that the market of oil is well supplied and...
He reiterated that prices have hit record highs due to speculators, investors that buy oil to compensate for a weak dollar and geopolitical clashes.
Qatari Oil Minister Abdullah al-Attiyah said "I don't think there is a need for more oil. My customers aren't asking for more oil."
The Qatari minister said recent reports from the International Energy Agency have shown reductions in demand forecasts.
Saudi Oil Minister Ali al-Naimi reiterated the view of OPEC's biggest producer that:
prices had more to do with financial market volatility than fundamentals and declared that the rally is led by investors, rather than a shortage of supply.
Yesterday, U.S. oil executives told Congress that prices should be between $35 and $90 a barrel.
John Hofmeister, president of Shell Oil, pegged the proper range "somewhere between $35 and $65 a barrel."
Hattip to Bloomberg.
The Nattering One muses... pay attention and read those numbers again...
open interest fell to 1.36 million while non commercial contracts grew to 263,378.
This means that open interest from COMMERCIAL contracts
or leveraged hedges the OIL COMPANIES and SUPPLIERS have is around 1.1 million.
Isn't this the fox guarding the hen house?
To inform yourself on how oil prices are completely false and manipulated as well as...
how the urban myth called peak oil is used to spook the herd into higher prices;
see our Peak Oil Cufuffle Series and Peak Oil Redux Series
For $135 a barrel oil you can blame the American public, the White House; Wall Street & The 7 Sisters.
This is what you get for Veteran's and Memorial Day:
$135 a barrel oil for POTUS oil industry and Arab SPONSORS, along with...
our boys spilling their guts in an unnecessary war over OIL RIGHTS, NOT TO BRING DEMOCRACY to the Iraqi people...
but to build an Iraq to Afghanistan OIL pipeline, along which we have constructed 11 PERMANENT military bases to protect it.
HAPPY MEMORIAL DAY$$$$
More to come in Part II.
$130 Oil Justified? No Way
Oil Price Redux
OIL: Demand, Production and Speculation
Peak Oil - The Myth, The Legend, The Fraud
Spreading "Peak Oil" Crack
"Peking" Oil, the Saudis and China
Peak Oil? Not!
Peak Oil? Not! Part Deux
Peak Oil? Not! - Update
Peak Oil Redux Part I
Peak Oil Redux - Part II
Peak Oil Redux Part III
Peak Oil Redux Part IV
Peak Oil Redux Part V
Peak Oil Redux Part VI
Peak Oil Redux Part VII
Peak Oil Redux Part VIII
The Blame for $135 a Barrel Oil
Blame it on Markman's Myopia or The Day They Burned Ol' Dixie Down - A "Peak Oil" Commentary
Another Peak Oil Cufuffle Series
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