Something fishy going on here?

[UncleHoney]

The banks that are broke and getting handouts from Uncle Ben are dealing in OIL? Hummmmm... Using our money to screw us out of more of our money? Looks like a shell game to me.

The oil price today, unlike twenty years ago, is determined behind closed doors in the trading rooms of giant financial institutions like Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS. The key exchange in the game is the London ICE Futures Exchange (formerly the International Petroleum Exchange). ICE Futures is a wholly-owned subsidiary of the Atlanta Georgia International Commodities Exchange. ICE in Atlanta was founded in part by Goldman Sachs which also happens to run the world’s most widely used commodity price index, the GSCI, which is over-weighted to oil prices.


"More on the real reason behind high oil prices: Part II" by F. William Engdahl. FSO Editorial 05/21/2008


Here's the first article in the series.


"‘Perhaps 60% of today’s oil price is pure speculation’" by F. William Engdahl. FSO Editorial 05/02/2008

 

[dmpi]

Oil prices go up, but demand stays flat. If I was running the oil companies, I'd be jacking up the price too.

 

[youbet]

Oil prices go up, but demand stays flat. If I was running the oil companies, I'd be jacking up the price too.

Isn't what those intellectual fellas call an inelastic demand curve? You know, where within certain limits, the demand for a product will stay about the same regardless of what you charge? Kinda looks like we need some viable alternatives to oil so that the darn curve becomes elastic and there's a reason for the equilibrium price to go down.......

 

[maddythebeagle]

those dang hedge funds...first make me lose my house to forclosure and now I cant drive my SUV

 

[lifeisgood]

We love to hate the oil companies because they "can jack up the price of oil". But if they could, they would. As in, would have a long time ago. And could do it a lot more, like to the $10 level, or even better $50.

 

[brewer12345]

those dang hedge funds...first make me lose my house to forclosure and now I cant drive my SUV

Heh, its fun ruling the world. O0

 

[HFWR]

Just for kicks, the world uses about 85m bbls/day, so at $135/bbl, let's see, carry the one, that's $11,475,000,000.

That's eleven and a half trillion, with a t...

 

[brewer12345]

Just for kicks, the world uses about 85m bbls/day, so at $135/bbl, let's see, carry the one, that's $11,475,000,000.

That's eleven and a half trillion, with a t...

In that case, you are missing a few zeros.

 

[HFWR]

That's brazzillion, with a "b"...

 

[brewer12345]

That's brazzillion, with a "b"...

That's more like it.

 

[chinaco]

There has been much press about speculation in oil futures... the nature of futures is speculative!

Seriously though... I have heard that the real price of oil (based on current consumption) should be around $70/barrel. If that is true, some people will get burned. When you hear about people cashing in their 401k to buy contracts.... you know it is time to cash out of your hedge fund or commodity fund.

 

[mathjak107]

We love to hate the oil companies because they "can jack up the price of oil". But if they could, they would. As in, would have a long time ago. And could do it a lot more, like to the $10 level, or even better $50.

for years the oil companies sucked as investments. look how many years exxon made it in the dogs of the dow.. if they are price fixers they got to be the worst price fixers of all time when a gallon of water cost more than a gallon of gas