How the oil market is being manipulated

'
‘Perhaps 60% of today’s oil price is pure speculation’

by F. William Engdahl
Global Research, May 2, 2008


The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. How?

First, the crucial role of the international oil exchanges in London and New York is crucial to the game. Nymex in New York and the ICE Futures in London today control global benchmark oil prices which in turn set most of the freely traded oil cargo. They do so via oil futures contracts on two grades of crude oil—West Texas Intermediate and North Sea Brent.

A third rather new oil exchange, the Dubai Mercantile Exchange (DME), trading Dubai crude, is more or less a daughter of Nymex, with Nymex President, James Newsome, sitting on the board of DME and most key personnel British or American citizens.

Brent is used in spot and long-term contracts to value as much of crude oil produced in global oil markets each day. The Brent price is published by a private oil industry publication, Platt’s. Major oil producers including Russia and Nigeria use Brent as a benchmark for pricing the crude they produce. Brent is a key crude blend for the European market and, to some extent, for Asia.

WTI has historically been more of a US crude oil basket. Not only is it used as the basis for US-traded oil futures, but it's also a key benchmark for US production.



‘The tail that wags the dog’

All this is well and official. But how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”

With the development of unregulated international derivatives trading in oil futures over the past decade or more, the way has opened for the present speculative bubble in oil prices.

Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the “tail that wags the dog.”

A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.”

What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.

The Senate report was ignored in the media and in the Congress.

The report pointed out that the Commodity Futures Trading Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, “Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.”

Further, the CEA directs the CFTC to establish such trading limits “as the Commission finds are necessary to diminish, eliminate, or prevent such burden.” Where is the CFTC now that we need such limits?

They seem to have deliberately walked away from their mandated oversight responsibilities in the world’s most important traded commodity, oil.


Enron has the last laugh…

As that US Senate report noted:

“Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC, including ongoing monitoring to detect and prevent price manipulation or fraud. In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. Because of their similarity to futures contracts they are often called “futures look-alikes.”

The only practical difference between futures look-alike contracts and futures contracts is that the look-alikes are traded in unregulated markets whereas futures are traded on regulated exchanges. The trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress.

The impact on market oversight has been substantial. NYMEX traders, for example, are required to keep records of all trades and report large trades to the CFTC. These Large Trader Reports, together with daily trading data providing price and volume information, are the CFTC’s primary tools to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. CFTC Chairman Reuben Jeffrey recently stated: “The Commission’s Large Trader information system is one of the cornerstones of our surveillance program and enables detection of concentrated and coordinated positions that might be used by one or more traders to attempt manipulation.”

In contrast to trades conducted on the NYMEX, traders on unregulated OTC electronic exchanges are not required to keep records or file Large Trader Reports with the CFTC, and these trades are exempt from routine CFTC oversight. In contrast to trades conducted on regulated futures exchanges, there is no limit on the number of contracts a speculator may hold on an unregulated OTC electronic exchange, no monitoring of trading by the exchange itself, and no reporting of the amount of outstanding contracts (“open interest”) at the end of each day.” 1

Then, apparently to make sure the way was opened really wide to potential market oil price manipulation, in January 2006, the Bush Administration’s CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London – called “ICE Futures.”

Previously, the ICE Futures exchange in London had traded only in European energy commodities – Brent crude oil and United Kingdom natural gas. As a United Kingdom futures market, the ICE Futures exchange is regulated solely by the UK Financial Services Authority. In 1999, the London exchange obtained the CFTC’s permission to install computer terminals in the United States to permit traders in New York and other US cities to trade European energy commodities through the ICE exchange.


The CFTC opens the door

Then, in January 2006, ICE Futures in London began trading a futures contract for West Texas Intermediate (WTI) crude oil, a type of crude oil that is produced and delivered in the United States. ICE Futures also notified the CFTC that it would be permitting traders in the United States to use ICE terminals in the United States to trade its new WTI contract on the ICE Futures London exchange. ICE Futures as well allowed traders in the United States to trade US gasoline and heating oil futures on the ICE Futures exchange in London.

Despite the use by US traders of trading terminals within the United States to trade US oil, gasoline, and heating oil futures contracts, the CFTC has until today refused to assert any jurisdiction over the trading of these contracts.

Persons within the United States seeking to trade key US energy commodities – US crude oil, gasoline, and heating oil futures – are able to avoid all US market oversight or reporting requirements by routing their trades through the ICE Futures exchange in London instead of the NYMEX in New York.

Is that not elegant? The US Government energy futures regulator, CFTC opened the way to the present unregulated and highly opaque oil futures speculation. It may just be coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is a former chairman of the US CFTC. In Washington doors revolve quite smoothly between private and public posts.

CONTINUED BELOW...
 
A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. Keep in mind that ICE Futures in London is owned and controlled by a USA company based in Atlanta Georgia.

In January 2006 when the CFTC allowed the ICE Futures the gaping exception, oil prices were trading in the range of $59-60 a barrel. Today some two years later we see prices tapping $120 and trend upwards. This is not an OPEC problem, it is a US Government regulatory problem of malign neglect.

By not requiring the ICE to file daily reports of large trades of energy commodities, it is not able to detect and deter price manipulation. As the Senate report noted, “The CFTC's ability to detect and deter energy price manipulation is suffering from critical information gaps, because traders on OTC electronic exchanges and the London ICE Futures are currently exempt from CFTC reporting requirements. Large trader reporting is also essential to analyze the effect of speculation on energy prices.”

The report added, “ICE's filings with the Securities and Exchange Commission and other evidence indicate that its over-the-counter electronic exchange performs a price discovery function -- and thereby affects US energy prices -- in the cash market for the energy commodities traded on that exchange.”


Hedge Funds and Banks driving oil prices

In the most recent sustained run-up in energy prices, large financial institutions, hedge funds, pension funds, and other investors have been pouring billions of dollars into the energy commodities markets to try to take advantage of price changes or hedge against them. Most of this additional investment has not come from producers or consumers of these commodities, but from speculators seeking to take advantage of these price changes. The CFTC defines a speculator as a person who “does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.”

The large purchases of crude oil futures contracts by speculators have, in effect, created an

additional demand for oil, driving up the price of oil for future delivery in the same manner that additional demand for contracts for the delivery of a physical barrel today drives up the price for oil on the spot market. As far as the market is concerned, the demand for a barrel of oil that results from the purchase of a futures contract by a speculator is just as real as the demand for a barrel that results from the purchase of a futures contract by a refiner or other user of petroleum.


Perhaps 60% of oil prices today pure speculation

Goldman Sachs and Morgan Stanley today are the two leading energy trading firms in the United States. Citigroup and JP Morgan Chase are major players and fund numerous hedge funds as well who speculate.

In June 2006, oil traded in futures markets at some $60 a barrel and the Senate investigation estimated that some $25 of that was due to pure financial speculation. One analyst estimated in August 2005 that US oil inventory levels suggested WTI crude prices should be around $25 a barrel, and not $60.

That would mean today that at least $50 to $60 or more of today’s $115 a barrel price is due to pure hedge fund and financial institution speculation. However, given the unchanged equilibrium in global oil supply and demand over recent months amid the explosive rise in oil futures prices traded on Nymex and ICE exchanges in New York and London it is more likely that as much as 60% of the today oil price is pure speculation. No one knows officially except the tiny handful of energy trading banks in New York and London and they certainly aren’t talking.

By purchasing large numbers of futures contracts, and thereby pushing up futures

prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher.

As a result, over the past two years crude oil inventories have been steadily growing, resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices.

Compelling evidence also suggests that the oft-cited geopolitical, economic, and natural factors do not explain the recent rise in energy prices can be seen in the actual data on crude oil supply and demand. Although demand has significantly increased over the past few years, so have supplies.

Over the past couple of years global crude oil production has increased along with the increases in demand; in fact, during this period global supplies have exceeded demand, according to the US Department of Energy. The US Department of Energy’s Energy Information Administration (EIA) recently forecast that in the next few years global surplus production capacity will continue to grow to between 3 and 5 million barrels per day by 2010, thereby “substantially thickening the surplus capacity cushion.”


Dollar and oil link

A common speculation strategy amid a declining USA economy and a falling US dollar is for speculators and ordinary investment funds desperate for more profitable investments amid the US securitization disaster, to take futures positions selling the dollar “short” and oil “long.”

For huge US or EU pension funds or banks desperate to get profits following the collapse in earnings since August 2007 and the US real estate crisis, oil is one of the best ways to get huge speculative gains. The backdrop that supports the current oil price bubble is continued unrest in the Middle East, in Sudan, in Venezuela and Pakistan and firm oil demand in China and most of the world outside the US. Speculators trade on rumor, not fact.

In turn, once major oil companies and refiners in North America and EU countries begin to hoard oil, supplies appear even tighter lending background support to present prices.

Because the over-the-counter (OTC) and London ICE Futures energy markets are unregulated, there are no precise or reliable figures as to the total dollar value of recent spending on investments in energy commodities, but the estimates are consistently in the range of tens of billions of dollars.

The increased speculative interest in commodities is also seen in the increasing popularity of commodity index funds, which are funds whose price is tied to the price of a basket of various commodity futures. Goldman Sachs estimates that pension funds and mutual funds have invested a total of approximately $85 billion in commodity index funds, and that investments in its own index, the Goldman Sachs Commodity Index (GSCI), has tripled over the past few years. Notable is the fact that the US Treasury Secretary, Henry Paulson, is former Chairman of Goldman Sachs.



1 United States Senate Premanent Subcommittee on Investigations, 109th Congress 2nd Session, The Role of Market speculation in Rising Oil and Gas Prices: A Need to Put the Cop Back on the Beat; Staff Report, prepared by the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs, United States Senate, Washington D.C., June 27, 2006. p. 3.


© Copyright F. William Engdahl, Global Research, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=8878
 
George Clemen's blog http://oil-gasoline.typepad.com/


"Possibly, an even more important difference between 1997 and 2007 is the activity of traders in the over the counter and futures markets. In 1997, trading was slim and investors were easily frightened. Since 2000, a different kind of trader has been in the market. These investors initiate what appears to be rapid trading at the release of news stories, especially those that would normally drive prices down. They essentially sustain and/or push up the price of crude oil in the face of bearish news stories. This activity has been consistent and is largely underwriting the high price of oil. As a result, the amount of oil sold forward in the futures markets (open interest) far exceeds the real supply and even farther exceeds the real demand by refineries. So, if these particular investors were to decide to take their profits and go home, the entire market could easily collapse - with a huge amount of contracts for sale and no buyers. After all, refiners are mostly purchasing crude oil on long term contracts with producers. It would be foolish to count on their minor demand to support the futures market. And, of course, if you are a buyer without a refinery or huge storage tanks at a dock, then you won't be taking delivery on your orders."




George has 29 years experience in analyzing oil markets, beginning with exceptional training in the oil movements and economics department of a major oil company, followed by stints with a chemical company, the California Energy Commission, and the Department of Defense.

George worked for many years as an independent technical consultant and expert withness in high profile energy and environmental cases from 1993 through 2002, finally burning out on a final, very complex investigation into the California Energy Crisis.

Education includes a B.A. in Communications from Eckerd College, a B.S. in Petroleum Engineering from Louisiana Tech U., an MS in Engineering from LaSalle U. and a JD (emphasis in international law) from UOP McGeorge School of Law.

George Clemen is NOT an investor, holds no financial interests in the market, and will not benefit financially from any analyses posted. Hopefully, readers of this blog benefit by learning how to analyze industry data for their own purposes.
 
Myths Driving Speculation

George Clemen, May 6, 2008 http://oil-gasoline.typepad.com/


"The pace of spinning up the price of crude oil is accelerating, possibly to the last leap upward before it crashes. Afterall, $200 per barrel oil, as forecast by a major investment house today, is no way for the Republicans to win the election in November.

Someone sent me the following link. This article is very much on point. The entire system of pricing is a bit more complex, but their comments about the integration of the markets and unregulated speculation are important. http://www.globalresearch.ca:80/index.php?context=va&aid=8878

Here's a few comments regarding stories investment analysts are telling to drive prices higher:

Russia's production is decreasing - an indication of an impending shortage. Wrong. Think of it this way: a producer cannot produce oil unless there is an immediate demand. Since the world's Strategic Reserves are nearing capacity, and few refiners are willing to try to operate with tanks full of $120/bbl oil, production around the world must necessarily be reduced to match demand. And at $120/bbl, demand is diminishing, not increasing. Thus, production MUST decrease -- and it is. The result? more oil in the ground for future production -- i.e. EXCESS SUPPLY

Supply disruptions on single oil fields will cripple crude oil supply. These type of disruptions have been happening since oil was first discovered. In general, world oil production is operating below capacity right now. So a loss of production in one place will be made up from another source. Unlike the situation in the 80's, most refineries are now able to refine a wide range of crude oils, making it easier to substitute one crude oil another.

A million barrel decrease in US inventories is an indication of shortage, justifying an increase in prices. This rationale is clearly unsubstantiated hype. A million barrel decrease can be explained by one tanker that has not docked yet to unload its inventory. Theoretically, oil and product suppliers could swing the data by simply slowing down or speeding up tankers so deliveries arrive before or after the day of reporting to the EIA. Furthermore, refineries would not normally fill their tanks with high priced imports unless they were sure the price would continue to rise. On the other hand, vertically integrated oil companies do want to receive all of their domestic production at maximum price. It's a balancing act to optimize profits that has nothing to do with the overall availability of crude oil in the world market.

Low product inventories mean there is a shortage of products. If you take a look at the inventory management right now, you will see that refiners have drawn down product inventories, a possible indication that they want to be positioned to refine oil at maximum rates to draw down crude oil inventories fast if and when prices turn. They will buy oil to refill tanks as prices decline. Theoretically, as refineries buy more oil, reports of increasing inventories should push oil prices down, although recently investment advisers have been successfully in spinning stories about the "increase in demand" to the news media that sustained of speculation upward despite the data. EIA Data (scroll down to "figures")

There is an overall shortage of crude oil. Actually, the world has plenty of oil. In it's annual report, Exxon reports 40 years of proved reserves -- a situation that certainly would not light a fire under the company to go out and confirm more of the reserves they have already identified, but not fully quantified at market prices (proved).

Asia and China are driving demand beyond supply. Wrong again. While China did build a new, big refinery that needs imported oil, it will be years before they build out a network of roads and sell everyone cars to the extent that their demand will be significant as compared to US and other OECD demand. Asia still needs roads and cars too.

The EIA Short Term Demand Forecast: http://www.eia.doe.gov/emeu/steo/pub/3atab.pdf - shows World Supply is expected to outpace demand for 2009, realizing of course, that ideally, supply of a liquid product would match demand as closely as possible."


George has 29 years experience in analyzing oil markets, beginning with exceptional training in the oil movements and economics department of a major oil company, followed by stints with a chemical company, the California Energy Commission, and the Department of Defense.

George worked for many years as an independent technical consultant and expert withness in high profile energy and environmental cases from 1993 through 2002, finally burning out on a final, very complex investigation into the California Energy Crisis.

Education includes a B.A. in Communications from Eckerd College, a B.S. in Petroleum Engineering from Louisiana Tech U., an MS in Engineering from LaSalle U. and a JD (emphasis in international law) from UOP McGeorge School of Law.

George Clemen is NOT an investor, holds no financial interests in the market, and will not benefit financially from any analyses posted. Hopefully, readers of this blog benefit by learning how to analyze industry data for their own purposes.
 
WorldOil.com
the oilfield information source

EDITORIAL COMMENT

http://72.14.205.104/search?q=cache:mstDss1KD-gJ:www.worldoil.com/magazine/MAGAZINE_...2005+"george+clemen&hl=en&ct=clnk&cd=15&gl=us


"How are crude oil prices set? That's a question I'm often asked. Of course, the question itself is rather vague, because I'm certain that in a general, long-term sense, supply and demand determines prices. But in any given month or day, the effect of paper-only traders, spot prices, futures, the timing and type of data sources - I honestly don't know the finer details, or how it all works. I ran across the following commentary by George Clemen, someone that I've enjoyed reading for several years. George has 29 years' experience in analyzing oil markets; a brief biography follows this column. So, with the usual caveats from management about opinions, here's how he answers the question.

You can't pin this one on Saudi Arabia, or OPEC - they are simply beneficiaries of a very complex international market. In general, like all other commodities, the price is based on supply and demand. If the only players were oil producers and refiners, the market would be well-behaved and would be far more responsive to consumer demand. It used to be that prices would be determined by a balance between spot prices (shipments of crude oil that are on the way to refiners but, for whatever reason, become available for sale), and the price refiners can get for their total product slate on the wholesale market. Spot prices would be determined by looking at the recent prices paid for shipments as reported in a couple of industry newsletters, such as Platts Oilgram or Argus reports.

The introduction and recent popularity of trading crude oil and refined product futures changed the market. Here, traders who have no possible way of receiving or refining crude oil purchase contracts and hold them to trade on price fluctuations, at a profit, and before delivery. In theory, the futures market provides a trading ground where a willing buyer and seller agree on a price and the price is instantly public, thereby setting a marker for the industry. Unfortunately, this market was simply overlaid on top of an already functional market with well-entrenched pricing practices. It is the duplication of systems that provides fertile ground for speculative games.

First, speculation in this market is very expensive, because oil is traded in 1,000-bbl contracts. It is a game fit only for investors with lots of money and willing to take large risks, primarily wealthy traders and those operating high-risk investment and hedge funds. As it turns out, several players of this ilk entered the energy market during the brief Enron era, where they learned the tricks of the trade.

The California energy crises provided a special training ground for savvy energy commodities traders who quickly learned how to work the information system. Specifically, they learned that they could drive up natural gas prices incrementally by purchasing one natural gas spot market contract and submitting the trade to one of the journals that collects and publishes market trade prices. At the time, there was no method of validation, so the trade price was published. In the meantime, the same investors could be holding several natural gas futures contracts. The price of the futures would increase on the report of the spot trade price that was reported.

Since it was only one contract, the investor could then sell the spot contract at market value, even at a loss, not report the sale and reap the benefit of the rise in the futures market resulting from the report. The utilities that purchase natural gas depended on the prices for spot trades reported in the journals to accurately reflect what others (utilities) were paying for natural gas. In fact, it was common to write contracts between suppliers and utilities to reference certain prices in reputable journals as benchmarks for contract valuation on a day-by-day basis. Using this system, futures prices could be driven to lofty heights in a very short period. The opportunity to pull off a similar run up in prices still exists in the all too trusting oil markets.

In this situation, there is no reason for oil companies, or foreign producers, to get involved in driving prices up. All they have to do is sit back and sell oil at the prices created by investors. For months now, major oil companies and even OPEC members have pointed out that prices are being set in the futures markets by speculators. However, producers should note that the entire process described above can be reversed, and the speculators can make money on puts as they drive prices down, leaving producers holding the bag.

There are producers and refiners out there selling and buying crude oil, in part, based on prices set by speculators in the futures market. Each time a trade is made in that market, refiners and producers note the price, up or down. This becomes the price against which spot pricing is weighed, i.e., a buyer in the spot market looks at the current price in the futures market and reasons "if I have to purchase oil today at market price, the futures price is the amount established in the current market," and weighs this price against the most recently reported spot price in the preferred journal. Thus, the futures price and spot price are used as a measure to begin negotiations for a spot market delivery.

The big refiners use complex models to determine the optimum price to pay for various types of crude, depending on sulfur content, API gravity, transportation costs, and many other factors, including the most recent futures price, and the price someone with a real tank of oil is asking.

With the addition of new equipment to US refineries since the 1980s, most refineries can refine a wide range of crude, although it is still less expensive to process light sweet crude. However, environmental permits for sulfur emissions limit capacity to process sour crude. This change in refining capacity pushed prices for various types of crude oil closer, but there is still a range based on quality.

Of course, there are probably few, if any, speculators in the petroleum futures market who buy and sell crude oil based on real demand, because they lack sufficient information to know what crude oil refiners need at any point in time. It is this problem that distinguishes crude oil futures from all other commodities.

If an investor buys pork bellies, and ends up taking delivery, he can probably figure out a way to sell them. In contrast, if an investor tries to take delivery of a crude oil contract, he will find that there is no storage available, and would have to find a refinery that wants the crude and a way to transport it. Most likely, an investor who takes delivery would own a large quantity of crude that has no market value because, in truth, there is no market for crude oil sold on the futures market.

Speculators in the futures markets have driven the price up and, generally, there is no counter-balancing purchaser to drag the prices back down in the interest of consumers. Competition among refiners in the US for market shares used to force refiners to shop for the least expensive crude oil. But the advent of boutique fuels in US cities (in response to EPA air quality goals) created isolated markets, making gasoline a less fungible product and preventing competition from product imports. Internally, the US government killed competition among refiners by creating markets for products that are so small that one or two refiners who have no interest in competing can supply them.

Finally, the US made this whole system worse by implementing today's system of purchasing oil for the SPR. While the amount of oil purchased to fill the SPR, in itself, is almost insignificant, each purchase establishes a price between a willing seller and a willing buyer. And the current system creates a buyer (a contractor for the US) who has no incentive to bargain for a lower price. Thus, when filling the SPR, the US government may be an unsuspecting player in the run-up of crude prices if the price of these sales is reported to the journals.

(SPR filling: The US takes it's royalties in oil production from US federal waters "in-kind," because it does not want offshore-quality oil in the SPR. Offshore production is shipped to a US refiner on the Gulf Coast, and then a contractor for the US (awarded annually to an oil company) goes into the international market and uses the equivalent dollar value of the production delivered to the refiners to purchase a quantity of higher-quality oil to deliver to the SPR. In this way, the US contractor serves as a market participant, helping to establish the market price of crude oil.)

Overall, there is no simple answer to how prices for crude oil are set. But it appears the system could use some tightening, so that each trade in either the real petroleum business, or in the paper market, represents a valid trade and sets a valid price between a willing seller and a willing buyer. "

George Clemen has 29 years' experience in analyzing oil markets, beginning with exceptional training in the oil movements and economics department of a major oil company. Degrees he has earned include a BA in communications from Eckerd College, a BS in petroleum engineering from Louisiana Tech University., an MS in Engineering from LaSalle University, and a JD (emphasis in international law) from UOP McGeorge School of Law. He also owns the website: http://oil-gasoline.typepad.com.
 
So it seems then, that Congress should either force the ICE to follow the same reporting requirements as the other US exhanges (only in regards to commodities that are already traded on US exchanges), or outright prohibit the ICE from trading a commodity contract that's already traded on a US exchange.
 
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