Are Goldman Sachs traders bidding up the price of oil again?

[kentuck]

Did they think we had forgotten about the last time they did it?

Gasoline was over $4 dollars per gallon because of these futures traders. There was no shortage. They manipulated the prices then and they are doing it again.

These folks are criminals. How much more proof do we need?

[katnapped]

1. Of course they are

And our leaders are going right along with it

[Broderick]

2. YEP

Some folks here say higher gas prices are a good thing. I see elderly folks counting pennies to get the doctor. I see commodity prices rising on the additional costs of transportation. Higher prices hurt the working poor, the fixed incomes. It hurts my business, and my employees. The rich will still have plenty to fuel their jets.

[Autumn]

4. They are a good thing.

for the oil companies. The rest of us don't matter.:thumbsup:

[Broderick]

8. Not a bit

My cash flow goes to shit because of the additional fuel cost in the ground. My profits (or lack there of) go down because of the increased cost of credit cards as a percentage of the higher fuel costs. My taxes go up because gross sales increased with smaller margins. My inside sales suffer as folks have less to spend. My driveoffs go up (one of the few that still tries to trust folks), and our repair facility suffers because folks have less money to fix things that are broken. My employees suffer as we have to cut hours to remain in business. Just a bad thing. MEanwhile the big corporations can weather it and the smaller business folks suffer. Sorry for whining.

[Autumn]

14. It hurts us all. The only ones who don't

suffer from the price of oil are the rich, the cost of fuel doesn't bother them, and the politicians who get a lot of donations from the oil companies. If a person has to drive 35 miles one way to get to a grocery store, like I do, then I have to cut back on my spending.

[Frank Booth]

16. Good post.

Thank you for explaining who this really hurts.

[sarcasmo]

3. When they own the politicians they will never be prosecuted. Greed, plain ole Greed.

[somone]

5. Bloodsucking scum

[Nye Bevan]

6. Goldman Sachs has no more control over the price of oil than you or I do (nt)

[Sal Minella]

9. So, oil speculation doesn't exist in your world?

[hobbit709]

12. The status quo apologists never admit to things like that.

[Terry in Austin]

28. Changing the status quo would be dandy

All we need to do is get God to put more oil in the ground.

:evilgrin:

[Nye Bevan]

19. Plenty of people were speculating on internet stocks in 2000.

Remember how that ended? Speculation does not necessarily result in rising prices.

[Sal Minella]

22. People can choose to buy or not to buy stocks.

People who are trying to get to work don't have much choice in whether or not to buy gas.

Speculation in dot-coms hurt investors, long-term.
Speculation in oil hurts everybody BUT investors long-term.

[Sal Minella]

7. Plus, the U.S. is exporting more and more gasoline, which

can't help national prices internally.

U.S. Department of Energy site on monthly gasoline exports:

http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mg4ex_nus-z00_1&f=m

"Drill baby drill" is wonderful for the oil companies but does absolutely nothing to help the guy driving to his minimum-wage job.

[kentuck]

10. Delete

exports.

[hobbit709]

11. Next silly question?

[kentuck]

13. Stay tuned.

:-)

[global1]

15. They Figure The American Public Got Used To The $3.00/gal Price.....

and isn't complaining much - so the oil companies are upping the price again to a new level that in a year from now we'll all be happy with. They'll take it up to close to $4.00/gal then they'll deal with the public outcry for a couple of months - and then drop it to around $3.50 and we'll all be happy again. They will have successfully raised the price $0.50/gal. Their profits will be up - because it's the American Way that every year a business has to make more money than the last. You have to be sympathetic (sarcasm) to the oil companies. They have to pay for the BP Gulf disaster and all those new regulations since.

In a year from now - after we've all become accustom to the $3.50/gal price - the same thing will happen again as prices start going up to the $4.50 highpoint and then taken down to to the new level we'll have to tolerate of $4.00.

This has been and on-going pattern and we fall for it all the time.

[badtoworse]

17. Oil is traded the same way most other commodities are.

Corn, wheat, pork bellies, gasoline, natural gas, metals - you name it. They are all traded on futures contracts (yeah, there's a cash market too, but you can't hedge that which is why futures exist). There are legitimate reasons to hedge the price of oil. The reality is that if the economic recovery gets any real traction, the demand for oil is going to rise sharply and the price will go up. Blaming Goldman isn't going to change that.

You can make a lot of money trading commodities, but you can also lose your shirt. If the demand for oil does not materialize, then anyone holding an overpriced futures contract is going to lose money (maybe big money) when the contract settles. It works both ways.

[SoCalDem]

18. They don;t care if we forgot or remembered.. there's moolah to be made

and they know we still need to drive to work, and they don't care if it's a hardship to us.

[Capt_John]

20. That enron loophole is working out really well for them

n/t

[badtoworse]

21. What loophole is that?

If memory serves, Enron traded electricity and natural gas, not petroleum.

[Sal Minella]

23. Wiki-speaks:

Definitions of Enron loophole on the Web:

* The "Enron loophole" exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation.
en.wikipedia.org/wiki/Enron_loophole

[badtoworse]

24. Fair enough. I thought it was something specific to oil futures

[Waiting For Everyman]

26. Yup. Thanks to their "bag man" Phil Gramm (and his wife Wendy).

Welcome to DU. :hi:

[GliderGuider]

25. There's a clue here

I know it's fashionable to blame speculators, but think about the implications of this graph for a second:



This graph shows the sum of all the world's net oil exports -- the amount of oil for sale on the world market -- over the last 24 years. Notice what's happened since 2005. That was the year that the world's oil production hit a plateau that it's been on ever since.

So, global oil production has been flat for 5 years. In oil exporting nations their consumption has continued to rise, resulting in lower levels of net exports. With less oil on the world market, oil importers are forced to bid the price up in order to get the supplies they need. As the world economy tries to recover from the recession, it needs more oil. The result is rising demand in the face of falling supply. It doesn't take a rocket scientist to figure out why prices are rising. It does, however, take an open mind and an ability to look deeper into the issue.

[Terry in Austin]

27. Speculation is the symptom, not the cause

Okay, they're criminals -- that's easy, be it with oil or anything else.

But they're not stupid. They know there's a reason that oil makes for good speculating: world supply is in long-term decline.

>>There was no shortage.

Unfortunately, there is in fact a shortage, or structural shortfall -- we use three barrels for every new barrel found. Production will never exceed 2006 levels.

Average oil prices will inevitably rise over the longer term, due to increasing scarcity. Speculators aggravate the problem by adding wilder swings in price volatility, but the underlying cause is not due to their shenannigans, by any stretch.

Throw 'em in jail, hang 'em out to dry -- it could happen.

However, it wouldn't change the fact that under any circumstances, gas is not going to remain cheap. That part is over.

[Sal Minella]

30. "gas is not going to remain cheap"

Indeed. Especially since our gas exports are now steadily rising every month.

[Terry in Austin]

31. Short term, sure, no problem

That situation, however, doesn't automatically extend beyond a time frame of months.

You seem to be insinuating that we DO NOT have any problem of a longer-term oil supply crunch. Is that correct? If you actually believe that we don't, you might want to engage the issue directly.

In fact, if you have an interpretation of the data about peak oil that makes a good case for business as usual, I'd be interested to hear it.

[Sal Minella]

33. Of COURSE we have a problem with longer-term oil supply crunch.

We are not managing to wean ourselves off it before it runs out.

In the interim, I am hearing on the radio that "gas prices are going up because there's a refinery in Canada that's been shut down unexpectedly" -- propaganda from the oil companies, obviously, since, from looking at the stats put out by the DOE, you can see we are EXPORTING increasingly more gas.

but of course squeezing Americans by exporting the gas they want to buy at home has nothing to do with the price going up??? Plus the speculators taking their profits from something people need (or still believe they have to have).

I don't have any long-term interpretations about anybody's data -- I just have been around the carnival long enough to recognize when I'm being conned, okay?

Edited to add link:
http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mg4ex_nus-z00_1&f=m

[taught_me_patience]

29. They probably aren't making much difference

Oil futures markets are HUGE and a company like Goldman Sachs doesn't have the power to really move it too much. Also, I'd guess that most futures trading is done by companies that are oil price sensitive looking to hedge risk (airlines, transports, oil, drillers, etc) and not speculators.

It's nice and convenient to have the boogey-man to blame, though.

[NotThisTime]

32. Everyone knows they are I think they've admitted as much...

[donheld]

34. of course they are.