Is manipulation responsible for the skyrocketing price of oil?

by nvrgnbk 52 Replies latest jw friends

• 

  nvrgnbk

  As it was just Memorial Day, let's try to remember what our troops are fighting and dying for - Oil. But not oil itself; they are fighting and dying for oil profits and that is not the same thing at all!

  The first Gulf War was clearly about oil, Saddam invaded Kuwait because he wanted their oil and we went to war and pushed him back. Even though Saddam's troops lit Kuwait's oil fields on fire, and even though there was a tremendous disruption in global supply, oil prices only briefly went from $20 to $30 (inflation-adjusted dollars) before falling all the way back to $12 between 1990 and 1998. There has been no major supply disruption during the Bush II War. What is the difference? Manipulation!

  see rest at link....
  
  http://seekingalpha.com/article/78950-oil-manipulations-exposed
• 

  BurnTheShips

  The article is a pretty ridiculous piece of sensationalism. While I am sure there is some oil manipulation involved, the main reason for the late increase in the price of oil has been flat production combined with increased demand. Peak oil. As for Gulf War I, it introduced a great deal of risk into the oil markets, and this was naturally reflected in the price of the resource.

  Really, you should know better Nvr.

  Let me help you:

  Global production has peaked and remained flat:

  

  There is likely manipulation and there may be some hoarding, which exacerbates the problem but these things are largely a resuly of the core problem, that demand is not flagging but supply is not increasing. People horde when they think something is going to run out. It is a vicious loop.

  BTS
• 

  nvrgnbk

  There is likely manipulation

  While I am sure there is some oil manipulation involved

  Thanks, Burn.
• 

  flipper

  NVR- You bet it's manipulation. As well as a conspiracy by the powers that be to control middle class America- need I say more ? I agree
• 

  John Doe

  Good god there are a lot of narcissists here!
• 

  cognizant dissident

  There is likely manipulation and there may be some hoarding, which exacerbates the problem but these things are largely a resuly of the core problem, that demand is not flagging but supply is not increasing. People horde when they think something is going to run out. It is a vicious loop.

  You say the core problem is not manipulation but that supply is not increasing. If oil companies have the means to increase supply to meet demand but do not do so in order to keep prices high, this is still manipulation of the supply side of the equation.

  Yes, people do horde supplies when they think something is going to run out. If they are energy companies, they also horde supplies in order to make people think supplies are going to run out in order to MANIPULATE prices. Enron ring any bells?

  Cog
• 

  hillary_step

  Burn,

  No person, not even you it seems, doubts that manipulation is taking place. The commonly touted figure in Wall Street is that 30% of the price of oil is being manipulated by the commodities dealers etc.

  The reality is though that even given this, oil has prices would be at $90.00 a barrel, for the reasons that the sensible part of your post outlines.

  Get used to it folks, the era of cheap gas has gone for ever. It will never return and this better become a financial reality in our lives sooner rather than later.

  HS
• 

  PrimateDave

  I must agree with Burn. =0
  
  
  However, I do suspect that financial institutions, unable to profit from selling various forms of packaged debt like they were doing a year ago, are taking the emergency loans of the Fed and investing in anything likely to make money, which in this case includes commodities. So, there could in fact be a price bubble happening right now based on speculation in the world markets. The problem with this is that they may be creating a positive feedback loop whereby economic stagnation caused by rising prices ultimately hurts those selfsame financial institutions even more. But, you see, they really have no choice. This is a game that simply must be played until the players die off. No, the world is not fair, and ultimately you have to look out for your own survival.
  
  As Burn pointed out, supply has remained pretty flat in the past couple of years. We are not about to "run out" of oil, yet many countries are past peak production and are in decline. Major producers are consuming more petroleum internally and exporting less oil as a result. This "net export" decline is leaving importers bidding up the price to attempt to maintain market share. Unfortunately, no alternatives exist on a scale sufficient to cover these declines, and I am not optimistic that there will be any in the future, at least not for a world that looks anything like the throw-away consumer culture of today.
  
  Demand is pushing the limits of supply as it is, and here we are going into hurricane season. Supply disruptions anywhere in the world are likely to result in spot shortages. Humanity has created this vast marvel of a distribution and supply network on a scale and magnitude that boggles the imagination. When I read people claiming elite conspiracies, I must disagree. We are all like fleas on a vast headless monster. No one is "in control". The elites who think they are in control are merely like ticks fighting amongst themselves. They may get a bigger portion of the "blood" to be had, but in the end they are all just as disposable as the rest of us. Sorry to sound so nihilistic.
  
  Dave
• 

  Homerovah the Almighty

  I think there is an expanding market that is supposedly forcing the rise but in reality its more about greed than anything else,

  there is more oil being pumped out of the ground than ever before and from so many different countries.

  It appears that there is also a deceivingly devised plan to pump up the price and have an legitimate excuse for doing so,

  I think its bullshit for the reason in the way and how the prices have

  risen in just the past year or two, there simply has not been that sharp of increase or demand
• 

  darth frosty

  I do believe it was manipulation. WHen he got into office bush's first act was to fill the strategic national oil reserves. He bought the maximum amount of barrels a day he could. once the reserves were filled he ordered new one to be built.

  Even now he is still buying the maximum amount and stockpiling barrels of oil. I believe that the numbers is something like a billion barrels stored.