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Collapse in Oil prices, how?
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Quote from arealpissedgoy:
You can thank your local Republican.
Anyone can afford gas at $5. If you can't and you're poor, it's because you don't have 3 jobs.
oh yeah,
forgot to get those tax breaks when they were handing them out and issuing TBills to pay for them.....
imagine that, most people getting somewhere below $750 - $1,000, whilest the wealthy were getting checks they never needed starting in the $75,000+ and higher range....
Oil is climbing, will continue to do so as the "Trend" is up for now.
105.97 highs,
110 to 120 by summer is a strong possiblity.
The FEDS and the Idiots in the White House can do nothing to "Manipulate" OIL other than a global WAR.
States may suspend "Gas Tax" to help the Sheeople as the prices will rise to 4 plus dollars a gallon. I have not heard of such a move by any state as of yet.
In fact, OIL is not really being addressed by the "sheeople"s Puppet masters or Mass Media on a Serious Scale. At least not yet.
105.97 highs,
110 to 120 by summer is a strong possiblity.
The FEDS and the Idiots in the White House can do nothing to "Manipulate" OIL other than a global WAR.
States may suspend "Gas Tax" to help the Sheeople as the prices will rise to 4 plus dollars a gallon. I have not heard of such a move by any state as of yet.
In fact, OIL is not really being addressed by the "sheeople"s Puppet masters or Mass Media on a Serious Scale. At least not yet.
If they make traders post 100% margin on their contracts, a few things will happen:
1) The activity will simply go offshore, to wit: the trading will be done at an exchange in Tehran or Toronto, instead of in the United States where the CTFC can regulate.
2) Many oil projects *rely* upon hedging in order to mitigate the risks of production, and to provide price signals that determine the economics of a project. Without those price signals, those projects simply don't get executed upon, which depresses supply even further, raising prices.
3) Many oil companies would simply go bankrupt as they are short oil right now (products are generally short) and wouldn't have the capital to cough up the margin requirements. This is already happening in the agricultural commodities business.
4) And likewise, users of oil would not have signals on the economics of their projects. Your favourite airline couldn't sell tickets in advance, because they would have no idea whether or not they would be able to fuel up the plane. Or alternatively, they could sell you a ticket in advance, but they'd have to charge you a massive risk premium to account for their own internal costs.
So its outright dangerous to try and regulate commodities speculation, if, indeed, such speculation does exist.
1) The activity will simply go offshore, to wit: the trading will be done at an exchange in Tehran or Toronto, instead of in the United States where the CTFC can regulate.
2) Many oil projects *rely* upon hedging in order to mitigate the risks of production, and to provide price signals that determine the economics of a project. Without those price signals, those projects simply don't get executed upon, which depresses supply even further, raising prices.
3) Many oil companies would simply go bankrupt as they are short oil right now (products are generally short) and wouldn't have the capital to cough up the margin requirements. This is already happening in the agricultural commodities business.
4) And likewise, users of oil would not have signals on the economics of their projects. Your favourite airline couldn't sell tickets in advance, because they would have no idea whether or not they would be able to fuel up the plane. Or alternatively, they could sell you a ticket in advance, but they'd have to charge you a massive risk premium to account for their own internal costs.
So its outright dangerous to try and regulate commodities speculation, if, indeed, such speculation does exist.
Agree.
This entire industry was developed with the knowledge that there would always be a liquid market. Removing that would be a fucking disaster.
Raising margins would also drive out all the small specs which obviously do nothing but provide liquidity, as they are usually wrong on price. Have been since the beginning of organized commodity markets over 100 years ago.
If you really have to regulate the "big" specs, reinstate position limits for all but true commercials using the stuff (which are not hedge funds BTW), and maybe outlaw all the off exchange swap activity by non commercials as well. The latter would be hard to enforce however as the money would just go overseas and do the same thing.
This entire industry was developed with the knowledge that there would always be a liquid market. Removing that would be a fucking disaster.
Raising margins would also drive out all the small specs which obviously do nothing but provide liquidity, as they are usually wrong on price. Have been since the beginning of organized commodity markets over 100 years ago.
If you really have to regulate the "big" specs, reinstate position limits for all but true commercials using the stuff (which are not hedge funds BTW), and maybe outlaw all the off exchange swap activity by non commercials as well. The latter would be hard to enforce however as the money would just go overseas and do the same thing.
Quote from Jayford:
Agree.
This entire industry was developed with the knowledge that there would always be a liquid market. Removing that would be a fucking disaster.
you mean, like what we have now?
manipulated prices that can only go higher?
manipulated prices and public talk and discussion that says there's nothing that can be done to destroy this metoric rise and collapse the prices? nothing!
collapse in the US North American civilian airline industry along with just about every other transportation based business, industry and manufacturing industry?
you mean that kind of disaster...
-----
come to think of it, I agree, we already have a disaster,
why not share the feelings?
The oil market is tiny...
compare the value of all the oil contracts outstanding to the valuation of a company like say, ExxonMobil...
It's not even close..
This is an easy market to corner..
and it's happening right now..
If people can't see that, they're fucking blind..
The question is 'what will it take to stop it'..?
compare the value of all the oil contracts outstanding to the valuation of a company like say, ExxonMobil...
It's not even close..
This is an easy market to corner..
and it's happening right now..
If people can't see that, they're fucking blind..
The question is 'what will it take to stop it'..?
Quote from PohPoh:
The oil market is tiny...
compare the value of all the oil contracts outstanding to the valuation of a company like say, ExxonMobil...
It's not even close..
This is an easy market to corner..
and it's happening right now..
If people can't see that, they're fucking blind..
The question is 'what will it take to stop it'..?
What is the market cap of all of the outstanding CL contracts, for the next 3 months for example according to the cot report?
I guess you can use the performance bond requirement of CL as a barometer. I am sure it is smaller than XOM!
surdo
Quote from Surdo:
What is the market cap of all of the outstanding CL contracts, for the next 3 months for example according to the cot report?
I guess you can use the performance bond requirement of CL as a barometer. I am sure it is smaller than XOM!
surdo
There is an Open Interest (in CL alone)...not counting QM, or others...
OI for CLQ, CLU, CLV = 534,649 contracts
534,649,000 barrels of oil @ $140 / barrel
= $74,850,860,000
That's just under $75 Billion...
It gets tricker with the CL Options, which have enormous OI..but I'm not sure if you have to calculate NET OI...
There is a much greater OI in CL Puts than there are in Calls...
Market Cap of the 4 Biggest Oil Companies: XOM, CVX, RDS, BP..
$1 TRILLION...
facinating points all,,,,
then,
either the US Gov't is bigger and badder, or is made up of these trillion dollar companies....
either way,
something has got to reign these cowboys in or they're likely to strangle the citizens of the US, and other countries to the point of no repair....
then,
either the US Gov't is bigger and badder, or is made up of these trillion dollar companies....
either way,
something has got to reign these cowboys in or they're likely to strangle the citizens of the US, and other countries to the point of no repair....