Holding Oil for speculative reason is illegal from tomorrow .....

What happens when this headline pops up on CNN one day ? I think a long time ago they also made it illegal to own gold.... so why not oil ? In my point of view that would cause the oil price to crash and the population would be happy that speculators finally get hurt. What do you think of a scenario like that ? How likely is it .

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Not gona happen. In fact, Domestic drilling projects are having a huge influx of Private Equity. We are on our 4th Drilling project (www.ladeltaoil.com) with these guys alone, and they have hit 14 out of 15 wells. Our Firm is around 60% with other projects.

Private Equity is leaving the Markets in droves. Some are caught in the RE downturn and are holding to those assets but are getting liquid in other areas to roll in to Oil.

So, I doubt that OIL will be "HALTED" in upward price movement.

However, the name REARDEN METAL may ring a bell. If the "COLLECTIVE" come together and try to "Outlaw" Oil price movement, Freez oil, or do some other stupid shit, we would see a massive flight of money out of OIL into who knows what, but not america.

Yet, I'm banking on the fact that oil is going higher. Im sure it may pull back to the 90s or so. Yet, I doubt we will see anything lower.

Hurrican Season is about 6 months away. Summer is almost here and the Refiner. shut down for repairs.

OIL at 120 easy.

Natural gas to 15-20 easy
 
People that think speculators are a problem or the reason oil is at these prices don't understand the role of futures markets and how they work.
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I agree 100% but most will not read and learn. They will spout out PIKER shit they hear in the Media.

Same old sheoople, diffrent item.
 
Quote from EMRGLOBAL:

People that think speculators are a problem or the reason oil is at these prices don't understand the role of futures markets and how they work.
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I agree 100% but most will not read and learn. They will spout out PIKER shit they hear in the Media.

Same old sheoople, diffrent item.
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Ok. I'm gonna call bullshit. Maybe that means that I am ignorant and lazy, but hopefully your counter arguments will sway me or get me started on a path to knowledge.

So... let me get this straight. You're saying that the fact that everyone (fund managers, businesses, individuals) believes that oil prices will rise has minimal impact on the futures price?

You're saying that a fund manager who allocates 5% of his portfolio to holding oil futures long (and rolling them forward) for an extended period of time will not affect the price of the contracts?

You're saying that companies in transportation, who are worried about skyrocketing fuel prices, and who buy oil futures contracts (and roll them forward) will not affect the price?

What am I missing?
 
Quote from StockApprentice:

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EMRGLOBAL, as your friend I'm seriously asking you to answer this guy with the same degree of respect he gave you. No 'moron' this, and 'idiot' that- It's just completely uncalled for, and gives off a completely false impression of who you really are.

Anyone fortunate enough to know you personally, knows without a doubt that you're a true gentleman. Please turn the corner here, and address people on the internet in the same manner as you would in real life!
 
Quote from trillenium:

What happens when this headline pops up on CNN one day ? I think a long time ago they also made it illegal to own gold.... so why not oil ? In my point of view that would cause the oil price to crash and the population would be happy that speculators finally get hurt. What do you think of a scenario like that ? How likely is it ?
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others have been proposing this,

on another line of reasoning, the reason that speculation has taken hold so rampant under the Bush Administration has to do with the claims made during the end of the 2hr "Enron, The Smartest Guys In The Room" presentation, where they (supposedly) became part of the transition team for the new administration and started their work then.

As far as details, laws, consumer protection laws and the like, one would have to research this to unwind those actions, however what is certain, just today (Wed, March 12, 2008 @ 11:32am EST) Booomberg Radio was interviewing someone regarding all the excuses used to justify oil prices, including the latest excuse dejour, namely the US Dollar devaluation. The commentator cited that last year this time, oil was $60 bbl and there is no way the $50 increase from 12 months ago could be explained away by US Dollar devaluation. At that time, they had to break to hear the NYS Govenor resign.

go figure.....

maniuplation?
 
Sort of a moot point since the speculation in crude would simply shift from the nymex crdue contract to the other crude markets around the globe. Not that the US gov't could or would ever try and pass a law like that. The US is far from the only market in these global commodities. All that would happen is jobs and business would be forced off shore. The business of speculation in crude would continue on.
 
Oil hasn't been a "problem" market. It's an orderly rise with plenty of supply for NYMEX delivery. The following Reardon is how Oil can become Minneapolis Wheat.

Day trading specs aren't the problem. It's deep pocket specs who cause disruptions. Here's the scenario. July 4th driving weekend. Huge, record demand. Your mega fund is long 1000 RBOB. A bunch of piker shorts like me are the other side of open interest. You decide, "fuck Pabst and his ilk, I'm taking delivery. You can then sell a deferred month and deliver the unleaded that you now exercise in July. I and other weak shorts must either cover in futures or find gasoline to deliver. Guess I'm covering. But to who? The refineries aren't sellers because they're out of product. And other specs don't want to sell or they'll wear the same noose as me. What happens? Voilà, a psycho push to $5 a gallon. Watch for it.
 
Quote from Rearden Metal:

There'd probably be a knee-jerk short term selloff in response to such an announcement, but ultimately it wouldn't help lower prices at all.

Think about it: Nearly all oil futures speculation takes place in front month and near front month contracts. Say I buy a 100 lot of crude: I've 'driven up the price' a bit <i>today</i>, but I'm obviously going to dump the position before expiry, putting equal downward pressure on the market <i>that day</i>, which evens it all out.

Those who take delivery of the oil for consumption purposes are removing supply from the market, causing higher prices... but speculators flipping in and out of short-term oil positions do not.
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sounds good in theory, but in practice there are ways around the delivery issues with ICE swaps.

So you can basically buy unlimited oil and never have to close the position at expiry - its financially settled.
 
A coordinated effort by the Fed and Finance ministers around the World requiring Futures Exchanges (nymex and others) to raise the margin requirements from 5% to say 30-50% of the nominal contract value would help take the speculative bubble out of this market. Crude Oil would fall 40-50% in short order!!!

Currently, it only take $5,250 in margin to control 1 contract at the NYMEX.

Raise margin requirements, see Crude Oil drop!

Yes, it would hurt the Exchanges as far as volumne is concern, but come on, all these guys have being making obscene amounts of money the past 7 years!!!
 
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