Oil Prices

[powayseller]

I find it very odd that we’ve heard nothing in the news about Iran president Ahmanidejad (I know the spelling’s way off). All this bad news about his nuclear ambitions kept making the price of oil go up. Then, in late August, he thumbed his nose at us and basically told us to get lost, since he has a right to uranium enrichment. I fully expected to see more bad publicity about Iran coming from the White House and media, as the concern over Iran is in reality HIGHER now than it was a couple months ago.

But with the silence over Iran, voila: lower oil prices. Just in time for the election.

I find this very convenient. I don’t believe in conspiracy theories, because I don’t think anyone is smart enough to develop a plan that can fool millions of people and keep it secret at the same time. I think of our government officials as bumbling and reacting, not as clever planners.

But why did oil prices go down? And does the general public realize oil prices are higher than they were last year, or are they just happy with the *relative* drop and willing to re-elect the Republicans?

[LookoutBelow]

If you were swinging a brass set of balls, you would go long on oil futures ! I expect the oil to go back to its meteoric rise right after the interuptions of the coming elections…..Its a ploy used about a billion times before in the past, why dont people see it ?

"United States of Amnesia" 

[lewman]

Check out this article: http://www.howestreet.com/articles/index.php?article_id=3110

It theorizes that George W Bush & Co have been pushing oil price down to help his approval ratings and republican’s re-election chances. Check out the chart on how GWB’s rating’s basically an inverse of oil price.

If you watched Farenheit 9/11, you’d know GWB’s well connected with the Texas oil patch as well as the Saudis so his influence (however short term it may be) cannot be dismissed. Also, the white house determines the U.S. (and to a certain extent the world’s) response to the iranian situation.

Interstingly since the 1970s we’re getting close to an energy crisis and it just so happened we now have a president who’s history with the oil industry put him in a position of power and influence in that sector. And we know that power tends to get abused … especially if you’re a politician ?????

[qcomer]

Oil crossed through the $60 support today and ended at $58.60. COP, VLO, XOM are all down big today. Gold got hit bad and is at $580 today and will decline to $500 if it breaks the support at around $560. But seriously, anyone think oil can go back and stay at $2 per gallon for sometime? Most oil analysts are bullish that this short term trend will correct as they think global economy will not be pulled down by US economy and China/India will provide the demand for oil. I think in short term, China/India will be affected by the US slowdown (the whole world will be affected) and so oil wil go down and will pull gold down with it. A trader on bloomberg said today that people are tried of listening to the doom and gloom “what if” scenarios that had supported oil & gold to reach $80 per barrel and $725 an ounce.

[Anonymous]

BushCo is still selling oil out of the Strategic Reserve. Remember the little imbroglio up in Alaska? Something about corrosion in the Trans-Alaska pipeline? Oh yeah, that amnesia thing.

Anyway, I totally agree that the downward trend in oil is purely politically motivated. Just as a few sellers “set” the market for homes, so too can petroleum marketers create downward pressure on oil prices.

Don’t expect an interest rate increase prior to the election either.

Afterwards, watch out.

Saw a GREAT bumper sticker yesterday. On one of those huge-ass SUVs no less. “My petroleum addiction fuels Mideast terrorism.”

So true.

[qcomer]

Hi Colombo,

Any stats, graphs, articles or investigative reports to support the theory of political involvement causing oil to go down or that Bush and Co is selling oil out of strategic reserves? About your comments that few petroleum future traders set the petrol price, you need to check the volume on these futures trades. What did you think caused oil rose to $80 per barrel besides US inventories rising and an imminent economic slow down?

Amarnath lost billions in natural gas trades, it just shows how heavily traders and hege funds were betting on energy sector. When these bets go wrong, the pressure on price to move the opposite way is huge as everyone tries to exit at the same time.

[BradPitt]

Hi powayseller,

I have read the same book you have “The Coming Economic Collapse & $200/bbl. The author said rising oil prices will have a crippling effect to the economy UNLESS someone found a way to produce free energy. Well, besides the ambiguous progress of Steorn in Ireland, no one has been proven to find free energy, but there is something close to it that is very real. It turns out that there are 2 trillion barrels of oil right here in the US. It has been known for 100 years, but no one has been able to process the material the oil is trapped in – rock! That is until now… A company called oil tech estimates that it can produce oil at 5 to 28 dollars per barrel if the mines are allowed to open. And in a national crisis, I believe that America WILL open those mines and give the company excessive support in funds. While this may not prevent our country from reaching a recession, I believe it relieves us of the possibility of our civilization ending in the next few years.(be nice to us global warming…PLEASE!)
That being said, the price of oil will probably hit a tremendous high before the government realizes it needs to support Oil Tech full-power. Right now, I think the company is producing less than 30 barrels a day. We need millions of barrels to make any significant difference. Depression is still possible, but it won’t be AS serious.

Brad

Time to go work out my biceps.

http://www.oil-techinc.com/profile.html

[(former)FormerSanDiegan]

Brad –

This sounds like one of those conspiracy theories, like when people claimed that auto companies had the technology to produce vehicles that were capable of 100 MPG … hey, wait a minnute, it turns out that they do have that capability.
http://www.calcars.org/vehicles.html

Too bad we burn coal to make the electricity, though.

[BradPitt]

By the way, that place is Colorado, and the material is called oil shale.

[4plexowner]

Goldman Sachs maintains a commodities index (GSCI) that has unleaded gas as one of the components.

Our new ‘friend’ Henry Paulson cut the weighting of the unleaded gas component by 75% in early August.

Any mutual or hedge funds following this index responded by selling their gas future long positions.

Lots of selling means that supply overcomes demand and walla, down go the prices.

[powayseller]

4plexowner nailed it! On august 9, Bush’s buddy Paulson converted the Goldman Sachs Commodities Index oil weighting downward, causing billions of dollars of oil to be sold off.

Remember, oil was high based on futures trading! With the futures price donw, voila; lower gas prices.

When oil fell, natural gas followed, and that’s what screwed Amaranth.

As CR said, it helps to have friends in high places.

[poorgradstudent]

Oil Shale is a lot like Ethanol, in that it’s competitive as a fuel source if the price of oil stays high in the long run. Those kind of energy sources do make $200/barrel (adjusted to today’s dollars, naturally) scenarios unlikely in any of our lifetimes.

I’m sure there is oil price manipulation. OPEC publicly manipulates the price, but the US also has strategic reserves. Bush’s approval rating is so closely tied to the price of gas right now that if I was him, I’d do everything I could to manipulate the price downward for the election.

That said, the Republicans are still going to lose seats in both chambers. They’re still going to keep control, but by slim margins. They’ve done a great job of gerrymandering and minimizing the number of competitive districts.

[sstearns2]

It wasn’t oil that Goldman Sachs sold off. It was unleaded gasoline futures, a very direct way of controlling the price at the pump. Oil has to be processed so there’s a lag time. I wonder what gas prices are going to do in December?

Scott

[4plexowner]

This article does a much better job of describing how Goldman Sach’s change affected the energy markets.

http://www.financialsense.com/fsu/editorials/2006/1004b.html

~

If you really want to understand how the world works read “The Creature from Jekyll Island: A Second Look at the Federal Reserve”, by Edward Griffin.

This book explains how the Western world is controlled by the banking cartel.

This book should be required reading for all Americans.

[Anonymous]

Big Oil Manipulates Pump Prices

http://marketplace.publicradio.org/shows/2007/01/02/PM200701026.html

Yes, I think we all believed this to be true on some level. Sure, the wingnuts were in denial, but I know at my local Chevron station the MORNING after the November elections that gas rose 12 cents a gallon. Give me a break.

[Author]

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