U.S. Considers Curbs on Speculative Trading of Oil

[jsharp]

WASHINGTON — Reacting to swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering trading restrictions on hedge funds and other “speculative” traders in markets for oil, natural gas and other energy products.

http://www.nytimes.com/2009/07/08/business/08cftc.html?_r=1&hp

And yet, these same people want to trade carbon credits in the same manner. A "commodity" that's a total fabrication by the way.

I smell a smokescreen here to pacify the masses...

 

[Tempest]

This is a much better idea than drilling for our own resources, putting political pressure on OPEC, or keeping our dollar stable...

 

[jsharp]

I find it interesting too that we're worried about speculators now that the price of oil is dropping. Yet last year any number of people were arguing that speculators had little to do with the price increases at that time.

 

[RF Overlord]

Originally Posted By: jsharp
last year any number of people were arguing that speculators had little to do with the price increases at that time.
I thought ALL oil prices were affected by speculation. How else do you explain the huge drop in gas from $4.20 to $1.85 in the space of a month? I was told the high price was because the Chinese were buying all the oil...so what...now they're NOT buying all the oil?

 

[Steve S]

Originally Posted By: Tempest
This is a much better idea than drilling for our own resources, putting political pressure on OPEC, or keeping our dollar stable...

oooooooooooooooooh!!

 

[Steve S]

Originally Posted By: RF Overlord
Originally Posted By: jsharp
last year any number of people were arguing that speculators had little to do with the price increases at that time.
I thought ALL oil prices were affected by speculation. How else do you explain the huge drop in gas from $4.20 to $1.85 in the space of a month? I was told the high price was because the Chinese were buying all the oil...so what...now they're NOT buying all the oil?
I would bet it is a little of everything. Not that I really know but it is a follow the money type of thing.

 

[ZZman]

Great it is about time. Lets get some stability in the market and have actually supply/demand issues determine the price.

This is what we need to stop:

Federal officials said “speculative” traders were primarily those that the agency defined as “non-commercial,” which are essentially financial investors who are not users or producers of the commodities and are primarily interested in betting on the direction of prices. “Commercial users,” by contrast, include farmers, airlines and oil companies that want to hedge against the risk of rapid price changes. (Qoute from article)

Energy is too important of a product to be played with.

 

[smokey1]

oil is expected to reach $80 a barrel by end of year . Crystal ball ( speculation ) ? Which will be in time for heating season . How convenient . Speculation of a hurricane heading into the GULF is a mover . There's oil tankers loaded with the black gold in the GULF . Gee , I wonder why ? Heck , CHINA regulates it and their car sales and economy are much stronger . Could there be a connection ? If we want this country to sink further into oblivion then let the oil traders take the reigns and lead us to the abyss . Good thing MR. PICKENS is into wind and natural gas , otherwise he'd be seen more on CNBC predicting the price of oil and the wall street gang would follow . ;- )

 

[1993_VG30E_GXE]

Originally Posted By: ZZman
Great it is about time. Lets get some stability in the market and have actually supply/demand issues determine the price.

Energy is too important of a product to be played with.


I'm a wall street oil speculator, and I can tell you that the presence of speculators is the very thing that brings stability to the oil market. Wall street speculation is a very complicated near impossible thing to grasp for most people. First off, people don't understand what the role of the speculator is, what he does, and how they affect the market. Until one researches this (and their is very little info available)...no conclusions can be made or statements to be followed. In fact research would be difficult. The agency has their own agendas and many times headlines and nonsense are just a distraction to satisfy the misinformed public, to make them go away, to sweep them under the rug so to speak.

It can't be understood unless one is a market participant. All that's going to happen is trading limits could be altered. This will do NOTHING to the market because they know the market would not function without adequate speculators. Their intent is to satisfy the public by doing something, but that something will be and MUST BE un-altering to the daily function of the exchange.

Plus, even if the NYMEX made it very difficult, all those traders would just move to ICE to trade Brent North Sea Crude or move to the Dubai Exchange. So, in many ways they can't do anything drastic, or else the volume will just move to another country and we'll set up shop over there, and the US will lose even faster.

 

[1993_VG30E_GXE]

Originally Posted By: smokey1
If we want this country to sink further into oblivion then let the oil traders take the reigns and lead us to the abyss . Good thing MR. PICKENS is into wind and natural gas , otherwise he'd be seen more on CNBC predicting the price of oil and the wall street gang would follow . ;- )


Did you blame the oil traders for crashing the oil market from $148.35 a barrel down to $32.70 a barrel? Fact is, in tough times people need to blame someone, so most people blame wall street and ESPECIALLY the speculators. The oil market is a global market, no single trader or group of traders controls the world or can corner this market anymore...it's too big. Pickens is an oil man. While he may advertise his latest campaign, I can gaurantee you that he makes (and made) all his money from oil.

 

[1993_VG30E_GXE]

By the way guys, I'm not trying to pick an argument with anyone. I like everyones posts, and it's good to voice your opinion. I just want to give the argument for the other side of the coin, from my opinion.

 

[Samilcar]

"The government already imposes speculative limits on agricultural commodities like corn and wheat. But for energy products, the limits are left to exchanges like the New York Mercantile Exchange."


While the "free trader" side of me doesn't like the idea of gov't restrictions all that much, I find myself in agreement that oil should have the same speculative trade limits that food commodities have. Wild swings in either food or oil have the same negative effects on the national economy. Oil probably more so.

 

[ZZman]

I would prefer to see oil taken off the market entirely. Have producers and users set a fair negoiated price and stick with it.
They could then have agreed upon inflation increases.


Please enlighten us:

So you tell us to the best of your ability how it works?
Why are you guys need? What is your criteria for trading buying/selling?

 

[Win]

Originally Posted By: 1993_VG30E_GXE


I'm a wall street oil speculator, and I can tell you that the presence of speculators is the very thing that brings stability to the oil market. Wall street speculation is a very complicated near impossible thing to grasp for most people. First off, people don't understand what the role of the speculator is, what he does, and how they affect the market. Until one researches this (and their is very little info available)...no conclusions can be made or statements to be followed. In fact research would be difficult. The agency has their own agendas and many times headlines and nonsense are just a distraction to satisfy the misinformed public, to make them go away, to sweep them under the rug so to speak.

It can't be understood unless one is a market participant. All that's going to happen is trading limits could be altered. This will do NOTHING to the market because they know the market would not function without adequate speculators. Their intent is to satisfy the public by doing something, but that something will be and MUST BE un-altering to the daily function of the exchange.



I had to call my wife to bring me a new shirt and tie - I snorted coffee out my nose I was laughing so hard from reading this arrogant, condescending gem straight from the same pile of moldy baloney that assured us that a person who should be in prison for tax evasion was the only person smart enough to understand the Wall Street charity bailout boondoogle.

Originally Posted By: 1993_VG30E_GXE


Plus, even if the NYMEX made it very difficult, all those traders would just move to ICE to trade Brent North Sea Crude or move to the Dubai Exchange. So, in many ways they can't do anything drastic, or else the volume will just move to another country and we'll set up shop over there, and the US will lose even faster.



Pffft.

LOL.

Don't let the door hit you on the way out.

These Bozo's, sadly, aren't going anywhere. They're smart enough to know that no other nations government and taxpayers are dumb enough to bail them out of the consequences of their own excesses.

 

[Samilcar]

Originally Posted By: ZZman
I would prefer to see oil taken off the market entirely. Have producers and users set a fair negoiated price and stick with it.
They could then have agreed upon inflation increases.


I don't see how this could work. It sounds like a recipe for long gas lines and signs saying "no gas today".

 

[smokey1]

not saying it's entirely the traders fault . It starts with the cattle ( the people ) all the way to the big WHITE ( FARM ) HOUSE . Moooooooooooooooo !

 

[smokey1]

why they haven't made 55 m.p.h. a national speed limit is beyond me . Is this not a crisis ? If enforced could bring in revenue for maintenance of roads , bridges , and put more police on the road to hand out those tickets . Also , could use part of it to fund alternative energy .

 

[jmac]

Sammy Hagar, you know the quote.

 

[47HO]

Originally Posted By: Samilcar

I don't see how this could work. It sounds like a recipe for long gas lines and signs saying "no gas today".



YES. You know, I'd rather have to pay $10/gal of gasoline than not be able to buy any for $1/gal.

 

[Kruse]

Originally Posted By: 1993_VG30E_GXE
Originally Posted By: smokey1
If we want this country to sink further into oblivion then let the oil traders take the reigns and lead us to the abyss . Good thing MR. PICKENS is into wind and natural gas , otherwise he'd be seen more on CNBC predicting the price of oil and the wall street gang would follow . ;- )


Did you blame the oil traders for crashing the oil market from $148.35 a barrel down to $32.70 a barrel? Fact is, in tough times people need to blame someone, so most people blame wall street and ESPECIALLY the speculators.



While I seldom watch it, the TV show 60 minutes did a piece on this..probably about 5-6 months ago. And while I agree that they are more entertainment than news, their broadcast pretty much pointed out that the last rise in crude prices was mainly the result of speculators. They stated that there was 100 times more oil being traded than being consumed. Crude oil only started to drop when the head of major oil companies were called to testify before congress and at the time the market went into a sell panic. I know there were other factors also, including the recession.
Is the show one-sided? Sure. But I don't think speculators are innocent here.