Feds Probing Possible Oil Market Manipulation — Oh Wait!

Published on May 28th, 2009

Feds Probing Possible Oil Market Manipulation — Something is once more fishy about the price of oil. So I ran into this article to discover it was almost exactly one year old and describing what we are currently seeing. An interesting read in light of the fact that we now know we were scammed last year. It’s happening again and what is being done?

One year ago:

The Commodity Futures Trading Commission, the government agency responsible for overseeing the trading of energy contracts, has taken the unusual step of revealing a six-month investigation into possible price manipulation

31 users responded in " Feds Probing Possible Oil Market Manipulation — Oh Wait! "

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# 1 gquaglia said, on May 28th, 2009 at 9:36 am

Payoffs will be made, some will be made rich, nothing will happen, business as usual.

# 2 Alfred1 said, on May 28th, 2009 at 9:51 am

Hyperinflation is in our future…commodities will be the first to inflate…Obama and the Fed are to blame for these coming bubbles which will serve to depress the economy, not stimulate it.

And his anti capitalist rhetoric and tax balloons being floated is scaring away anyone able to shelter their wealth…

We will be a third rate power, banana republic soon…thanks to Obama and the Democratic Congress of 2006 onward.

# 3 SparkyOne said, on May 28th, 2009 at 10:01 am

This is the federal gubbermint we are talking about. They could not probe their own ass without the instruction manual and a lot of assistance. Their report will be lies.

# 4 Patrick said, on May 28th, 2009 at 10:05 am

Don’t worry, O’Mama man is here.

# 5 Somebody_Else said, on May 28th, 2009 at 10:06 am

Not terribly important to the discussion, but why does the graph show $3.50/gal twice (on the left side)? Why does the red line show that gas is currently almost at 3.50 while the text box says 2.44?

How is our government going to stop oil market manipulation when they can’t even draw a graph?

# 6 JimR said, on May 28th, 2009 at 10:27 am

#5, LOL… You have revealed the true source of all our woes. Incompetence.

# 7 brendal said, on May 28th, 2009 at 10:41 am

The Tudors are at it again!

# 8 madtruckman said, on May 28th, 2009 at 11:34 am

yep that does explain it #6. being that the graph came from MSNBC, it doesn’t surprise me

# 9 2069995221 said, on May 28th, 2009 at 11:39 am

Oil market manipulation? Er…really? It thought manipulating the supply and price of oil was the precise point of OPEC.

# 10 Floyd said, on May 28th, 2009 at 11:42 am

Just remember that oil price manipulation is an equal opportunity cash cow. It happened last year under the Republicans, and seems to be happening again this year under the Demos.

# 11 McCullough said, on May 28th, 2009 at 11:46 am

Don’t look over here……Hey, LOOK over there!

# 12 PMitchell said, on May 28th, 2009 at 11:59 am

DUH

# 13 Mr. Fusion said, on May 28th, 2009 at 12:34 pm

One year ago we had the Bush Administration leading the investigation. Today, we have an Administration we may have some faith in.

I expect early next year there will be a big push to regulate commodity traders IF the price of fuel continues to fluctuate.

# 14 ECA said, on May 28th, 2009 at 12:50 pm

I hope you all understand something..
THE MORE YOU MAKE, the MORE THEY WANT, your money.

Look to detroit..Cost of living is OUTRAGEOUS.. because those that lived there, got paid BUCKS for working in the foundries and auto industry..
NOW that those have QUIT and fired to many, it is TOTALLY depressed.
around 40 years ago, a 1 income family COULD SURVIVE and live. Families that had 2 incomes could prosper.
Then something happened in the late 70’s. and PRICES started going up. By the 80’s it required 2 incomes to pay RENT and bills..
The only RULE now, is “HOW CHEAP/HUMBLE can you live, how cheap is your rent, and HOW CRAPPY of a house can you live in.
At this time it costs about $18 per hour to survive..thats 2 incomes of $9 per hour and 16 hours of your life..

# 15 Alfred1 said, on May 28th, 2009 at 1:01 pm

#13 you have blind faith…where have all the trillions gone? I bet if you knew…you would not be pro Obama.

# 16 PMitchell said, on May 28th, 2009 at 1:36 pm

hahaha if Obama came out and said he was the anti Christ here to enslave humanity, Mr Fusion would spin it as some how being a good thing for humanity

# 17 Obvious1 said, on May 28th, 2009 at 2:07 pm

How come the graph is screwed up? The text box lists gas at $2.44 but the graph indicates it’s almost at $3…

# 18 deowll said, on May 28th, 2009 at 4:44 pm

This is big brother taking care of you. How could it be otherwise?

# 19 Mr. Fusion said, on May 28th, 2009 at 6:09 pm

#16, Paul,

If you believe there is an “anti-christ” then you believe in a fairy tale already.

# 20 Uncle Patso said, on May 28th, 2009 at 11:59 pm

A better graph, not messed with by MSNBC can be seen at

http://eia.doe.gov/oil_gas/petroleum/info_glance/grprrets.gif

# 21 Mr. Fusion said, on May 29th, 2009 at 5:26 am

To all those worried about the graph, typical DU posts don’t have a relevant picture with them unless one comes with the story. Some editors go out of their way to use some seductive, beauty (usually with nice tits) or some totally irrelevant picture. Try going back a few days and compare the pictures to the content.

In other words, the graph probably doesn’t match the current story.

# 22 Winston said, on May 29th, 2009 at 6:25 am

Most of this article:

Oil Is Plentiful, Demand Weak. Why Are Gas Prices Going Up?

http://news.yahoo.com/s/time/20090529/wl_time/08599190144600

is just more “Move along, nothing to see here” mass media garbage written by the clueless in accordance with the statements made by some “expert,” but this one line gives the major part of the reason oil is going up again through exactly the same mechanism that pushed prices so insanely high before:

“Over the past two months, investors have plowed billions of dollars into oil futures.”

# 23 Winston said, on May 29th, 2009 at 6:33 am

But don’t expect _anything_ to come from a government that’s in bed with those it investigates. After all, the “regulatory” agencies were so good at preventing the current crisis, weren’t they? Here’s an article from almost exactly one year ago:

Feds Probe Possible Oil Price Manipulation
Gov’t Reveals Wide-Ranging Investigation Of U.S. Oil Markets Began 6 Months Ago

WASHINGTON, May 29, 2008

http://www.cbsnews.com/stories/2008/05/29/business/main4136490.shtml?source=RSSattr=HOME_4136490

“The Commodity Futures Trading Commission on Thursday said it started the probe in December and took the unusual step of publicizing it “because of today’s unprecedented market conditions.”

So sorry, your government is OWNED… just not by YOU. So feel free to vote for the puppet lackey of your choice.

# 24 Winston said, on May 29th, 2009 at 6:44 am

Finally, an excerpt from an artcle posted a year ago:

Oil Prices Are All Speculation

http://www.businessweek.com/lifestyle/content/jun2008/bw20080626_022098.htm

“The most surprising e-mail came from Chris Cook, a former director of the London Petroleum Exchange—now ICE Futures Europe. Cook wrote: “I am convinced there has been manipulation of the Brent Complex [the term that defines North Sea Brent crude prices] by ICE members for the last 10 years at least. I think it is quite likely that the Brent forward price is being kept artificially high—which does require deep pockets and accounts for the continuing barrage of Goldman [Sachs] forecasts and much of the other oil market hype that passes for news.”

Think about what Mr. Cook said: “Oil market hype that passes for news.” That sums up what you hear and read daily about oil.

Since the publication of those columns, however, four senators have introduced legislation to “close the London Loophole Act,” which in fact validates the reporting. Also worth noting is that, according to the London Financial Times, ICE Futures Europe “bowed last week to pressure to introduce position limits for speculative traders.” Jeffrey Sprecher, CEO of Intercontinental Exchange (ICE), was quoted in that article as saying: “At some point, some of the extreme proposals in the Congress would drive the business out of the U.S. There’s no question in my mind that the capital flows and trading behavior will move quickly offshore.”

Let me translate that, too: If we move to bring sanity to the commodity markets, then those markets will simply go do business where our federal regulators can’t touch them.

And so, while our Energy Secretary continues to blame America’s oil crisis solely on supply and demand instead of speculators, much as Dick Cheney blamed California instead of Enron in 2001, it takes little research to verify that no one yet has been denied an oil contract—and in fact, refiners around the world are today turning down oil they’re being offered.

One last thought on speculation in the oil market. In 2006, 100% of those who purchased oil contracts lost money because of the market’s contango (meaning spot oil prices were less than the contracted price on the date of delivery). In the fall of that year, when banks started demanding that margins be paid on those losing contracts, oil collapsed back to nearly $50 a barrel. In only 18 months, we’ve forgotten that lesson, too.”

# 25 Alfred1 said, on May 29th, 2009 at 4:49 pm

#22 Some of that money is bailout money…the rich were bailed out with out cash…

Many predict hyper inflation…more bubbles…as the trillions they printed and distributed…come back to buy…before the money is worthless.

# 26 CrankyGeeksFan said, on May 29th, 2009 at 5:10 pm

A Steve Croft on 60 Minutes report showed that there is SEVEN times the amount of oil traded as delivered. Morgan Stanley is the biggest oil company in the northeast U.S.

Maybe that helped bring about the economic collapse: In the 1990s .com stocks boom and bust, 2000s real estate boom and bust. Then oil, natural gas and other commodities collapsed and there was nowhere to put the money.

Gasoline prices started going up earlier this year apparently due to the fact that cheaper west Texas crude is unavailable to many refineries in the East and they had to import the more expensive oils. Instead of “Drill baby, drill!” maybe it should be “Pipeline baby, pipeline!”

# 27 ArianeB said, on May 29th, 2009 at 5:23 pm

The big problem with your hyperinflation theory is that trillions of dollars are simultaneously being sucked out of the economy by the banking crisis.

Its simple: Money is Debt, debt is being destroyed by loan defaults, ergo the deflationary recession we are in now.

When banks are unwilling to make loans and create money via debt, the historically proven fix is for government to spend money via fiat money. In other words Obama is right!

As to the oil topic at hand. Oil Prices are a reliable predictor of global recessions.

# 28 Glenn E. said, on May 29th, 2009 at 10:42 pm

As soon as I saw the price of gas pass the $2.10 mark, I starting saying to my friends. “Morgan Stanley must be buying up oil wells again.” And naturally, this price rise has been accounted for by some many other lame excuses, just like last year. And CBS’ 60 Minutes, hasn’t said a word about it (yet). But when the price comes back down, someday. I’m sure 60 Minutes will then find the time to tell us what really happened. And the US government will find the courage to “look into it” after the fact. Again.

# 29 Glenn E. said, on May 29th, 2009 at 11:21 pm

I still have the magic puzzle called the “12 Leprechauns”. When you swap the two upper sections, you end up with 13 Leprechauns. Which seems impossible. But if you measure each one before hand. You find that they all shrunk a bit. And that’s how the 13th Leprechaun get made.

And that’s how the US economy is being milked for all its worth, by the fat cats. The lower and middle class and their property are the Leprechauns. And all is being reduced a bit in worth, in a kind of manipulation trick, to create new wealth for those doing the manipulations. The reason very little (if any) new real wealth is being created. Is that there are no “new worlds” and their peoples, to be exploited. So it’s just the hard work and sweat of six billion humans, that can be tapped for the benefit of a thousand or so super rich “investors”. Who create the instruments they invest in. And set their worth for the rest of us to trade our hard earned capital for. And then they clean out these instruments (devalue) for their own gain. And act as if it’s all a surprise to then too. It’s all a big shell game. And only the least skilled, like Bernie Madoff, every get caught.

# 30 LibertyLover said, on May 30th, 2009 at 4:45 am

#27, Is Deflation Really Bad?

http://tinyurl.com/65yh8m

Deflation is typically a symptom of a sick monetary policy just as inflation usually is.

Deflation is not bad if you’re prepared for it.

And we were warned years ago of this happening. Instead, most people chose to listen to the government because, well, “they know what’s good for us.” This is what happens when people let other people do their thinking for them.

# 31 Larry said, on June 2nd, 2009 at 8:31 am

Everyone wanted to believe housing would go up forever, and that any rise in oil prices is only a speculative bubble. Both are wrong. Oil prices are down only because of a major plunge in consumption, when demand returns it will rapidly run into reduced supply.

Most oil fields are now rapidly depleting and require constant drilling to maintain output. Low oil prices and a lack of credit has halted much of the ongoing oil exploration needed to maintain a constant output.

As soon as drilling stops supply starts to fall by almost double digits year to year. Expect oil to go through the roof after a recovery, and stay there for quite some time, drilling takes time, supply can’t be ramped back up to 2008 levels over night, if ever.

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