Michael Masters (Hedgie) says Oil Market hijacked by gamblers and pumpers

[Pa(b)st Prime]

Quote from spidey:

I'm repeating myself, but John Corzine, the ex-CEO of Goldman Sachs said recently that it is speculation that has driven oil to where it is, not supply/demand. He knows more about markets than anyone on this website.

And partisan hack lib Corzine always tells the truth right?

 

[Bogan7]

Quote from Pa(b)st Prime:

You and your hedge fund buddies don't completely get it.

I'll concede indexing has boosted commodity prices. Hell even GLD squeezed metals.

HOWEVER at inflection prices, i.e. prices far above value (as defined by commercials at spot) the supply from producers would friggin' overwhelm the funds. I've made this point on other threads. If the Saudi's TRULY believed oil "should be" $60 a barrel they would hit every back month bid until it got there. The SWaudi's would veiew these funds as a heaven sent once in a lifetime opp to sell future inventory at unrealistic prices. Funds be damned. Funds be toast. So where's the selling? Presumably OPEC sellers aren't emerging because their oil is spoken for. Meaning oil prices ARE NOT disconnected from supply/demand/price reality. At this moment at least. For all I know OPEC IS hitting bids and this stuff cracks wide open.

I can see what you are saying to a point then why did they let oil drop to $9 with many the econmist included thinking it was heading to $5?

 

[Leonidas]

Quote from Pa(b)st Prime:

HOWEVER at inflection prices, i.e. prices far above value (as defined by commercials at spot) the supply from producers would friggin' overwhelm the funds. I've made this point on other threads. If the Saudi's TRULY believed oil "should be" $60 a barrel they would hit every back month bid until it got there. [/B]

Why would you kill the goose that lays the golden eggs? These index speculators are a "game changer," and why wouldn't SA want to sell at increasingly higher prices?

Plus, apparently the market cares more about the light sweet crude than the Saudi sour crude.

 

[Pa(b)st Prime]

Quote from Leonidas:

Why would you kill the goose that lays the golden eggs? These index speculators are a "game changer," and why wouldn't SA want to sell at increasingly higher prices?

Plus, apparently the market cares more about the light sweet crude than the Saudi sour crude.

Size goes to size. When you're producing a gazillion barrels a month you need more than an order book filled with 10 lots to set up your short hedges.

And yea for now these funds are an apparent game changer but without fundementals continuing to follow suit (consumers paying up for product) the investment allure of commodity indexing will fade and then prices sag. Just like it happens with stocks and fixed income products.

Actually I'd argue Asian CB purchases of Treasuries have been more of a "corner" than anything in oil and arguably a bigger detriment to Americans locked on fixed income rates of return than the harm of $4 gasoline.

 

[PohPoh]

Quote from stock777:

PohPoh, aint it amazing how many assholes there are in the world, who are even now being buggered and think its just a french kiss?

I'd like to see the manipulators take it to $500 per paper barrel, and watch these monkees bleed to death.

"Hey Mabel, look up 'free market' in da Websters, I think maybe we been porked"

The same shmohawks who believe the two biggest lies in the world
1) The Check is in the Mail
2) I won't come in your mouth

 

[stock777]

You guys just don't get it. Its a HOLDUP.

And commodity, milk, eggs, any freaking thing you name, can be run up like a penny stock promotion.

Any YOU are forced to buy it. Or you don't drive, drink milk, or have your sunnyside up.

They key here is YOU the public imbecile, will pay anything.

That's the scam.

Get it?

Good.

 

[walter4]

Producers can change the game by forcing speculators to take delivery on their contract. This apparently is not happening, I think they're buying the contract back.

So the producers are in this game also.

 

[AAAintheBeltway]

I listened to Masters testimony. He could barely talk, one of the dumbest sounding people I've ever heard before congress. He had zero support for his assertions.

This is a clever democrat plot to blame speculators for high oil prices. A twofer for them, they can justify raising taxes on evil specs plus shirk responsibility for their own huge role in wrecking our energy policy.

 

[AAAintheBeltway]

Quote from walter4:

Producers can change the game by forcing speculators to take delivery on their contract. This apparently is not happening, I think they're buying the contract back.

So the producers are in this game also.

Again, no proof just your idiotic conspsiracy theories. Go back to Obama campaign headquarters and tell them your work here is done.

 

[Leonidas]

Quote from AAAintheBeltway:

Again, no proof just your idiotic conspsiracy theories. Go back to Obama campaign headquarters and tell them your work here is done.

Have we seen huge increases in supply or huge decreases in demand? If you think the fundamentals support the FRONT MONTH PRICE, I want to know what they are.

Don't give me this crap about Chinese demand, because our supply and demand conditions aren't materially different than last year's, and we're double the price.

Also, McMasters didn't talk about raising taxes, he talked about things like, oh, ENFORCING POSITION LIMITS. Seriously, I'm a Republican too, but how can you be so blind? Wall Street doesn't know any political party, so don't support their frequent attempts to rape the public. That hurts the Republicans in the long term, you know.