Things that make you go hmmmmm.......

[Roughneck]

http://www.2theadvocate.com/news/Pet...-Vacherie.html

So we have a shortage of oil driving prices.....but people are paying out the rear to store oil on tankers?

There is some really weird crap going on in the futures markets and I get the idea we are all being scammed again by wall street.

[Scot]

Re: Things that make you go hmmmmm.......

http://www.2theadvocate.com/news/Pet...-Vacherie.html

So we have a shortage of oil driving prices.....but people are paying out the rear to store oil on tankers?

There is some really weird crap going on in the futures markets and I get the idea we are all being scammed again by wall street.

Those storing their oil in tankers are little different from those that store gold in vaults or safety deposit boxes.

[thriftyandboringinohio]

Re: Things that make you go hmmmmm.......

I like the idea of having another gazillion barrels of oil in storage on US soil - might come in handy one day if supply is actually disrupted.

[jtabeb]

Re: Things that make you go hmmmmm.......

Yep!

[Roughneck]

Re: Things that make you go hmmmmm.......

Of course we know what is going on.The weak dollar policy and inflation coming down the pike is driving investors into hard assets. But, the larger question is should we allow the massive amount of hot money that is flowing into commodities too continue when it is squeezing the middle class here and straving people in third world countries? It is not an easy answer. If you put curbs on futures trading by the large institutional investors does that mean the pension funds trying to protect middle class retirements get booted too? Or if you limit futures trading in energy and food commodities what would that do to the price of metals? Can you say Gold $5000? I'm just not sure what the answer is.

[jk]

Re: Things that make you go hmmmmm.......

Of course we know what is going on.The weak dollar policy and inflation coming down the pike is driving investors into hard assets. But, the larger question is should we allow the massive amount of hot money that is flowing into commodities too continue when it is squeezing the middle class here and straving people in third world countries? It is not an easy answer. If you put curbs on futures trading by the large institutional investors does that mean the pension funds trying to protect middle class retirements get booted too? Or if you limit futures trading in energy and food commodities what would that do to the price of metals? Can you say Gold $5000? I'm just not sure what the answer is.

i'm not sure how limiting futures trading will prevent people from hiring tankers. it will limit their ability to hedge, and likely make prices higher for physical. also, if keeping a tanker full is the only way to speculate on oil, or the only way to use oil as a store of wealth, tanker lease rates will go up. this will also raise the price of physical. if you prevent trading in gold futures, do you think that would drop the price of gold?

[sunskyfan]

Re: Things that make you go hmmmmm.......

I don't have any problem with future markets or scammers on Wall Street. I do have a problem with the US Government and The Federal Reserve bailing them out and regulators letting them use "other" people's money when the "other" people are not aware of what is going on.

[thriftyandboringinohio]

Re: Things that make you go hmmmmm.......

i'm not sure how limiting futures trading will prevent people from hiring tankers. it will limit their ability to hedge, and likely make prices higher for physical. also, if keeping a tanker full is the only way to speculate on oil, or the only way to use oil as a store of wealth, tanker lease rates will go up. this will also raise the price of physical. if you prevent trading in gold futures, do you think that would drop the price of gold?

You are clearly correct, jk.

Still, Roughneck has a great point. There are huge piles of hot money crashing around the planet in search of max profits, wreaking havoc in the lives of ordinary people and leaving trails of destruction in their wakes. Real damage like starvation when food prices skyrocket and plundered pensions when nations bail out ridiculous loans.

Gotta be something we can do about it, and we should be trying hard to find it.

[jk]

Re: Things that make you go hmmmmm.......

Gotta be something we can do about it, and we should be trying hard to find it.

i'm afraid that the analogy that comes to mind are mini-mammals scampering around in the underbrush while dinosaurs roamed the earth. surviving may be the best we can do, and a worthwhile and sufficient goal.

[Roughneck]

Re: Things that make you go hmmmmm.......

As someone who's been around the energy commodities market for a while I can tell that the thought used to be that futures prices could not effect the spot price.Regardless of what someone thought the price was going to be 6 mo from now spot was always set by actual physical supply and demand. But, 20 years ago you didn't have hedge funds,pension funds and wall street banks trading oil contracts or wheat contracts etc. You didn't have commodity etf's etc. Also these people don't trade like the speculators of past. Because of the fundamentals and as we mentioned the dollar,inflation situation these guys are just rolling long contracts. The feeling is that all this forward price momentum is actually pushing the spot price. Before the crash in 08 wheat,rice etc DOUBLED in one year.Then after the crash fell to normal levels. Oil went from 140 to 40. Did actual demand fall that much? Now, how much of the price is due to speculative pressure? None of the traders I talked to can give me an answer. Back in 08 when oil was going parabolic the saudis were running around saying oil should be $70.

[lektrode]

Re: Things that make you go hmmmmm.......

I don't have any problem with future markets or scammers on Wall Street. I do have a problem with the US Government and The Federal Reserve bailing them out and regulators letting them use "other" people's money when the "other" people are not aware of what is going on.

yeah!

how about this: for all strategically important commodities, the entity buying must be directly engaged in the commerce associated with consumption of said commodities and must be able to prove ability to TAKE DELIVERY

meaning that southwest airlines can play in the futures market in oil, as could valero, or fertilizer mfgr's BUT NOT GS, JPM AND THE REST OF THE HOT MONEY kings

[Roughneck]

Re: Things that make you go hmmmmm.......

how about this: for all strategically important commodities, the entity buying must be directly engaged in the commerce associated with consumption of said commodities and must be able to prove ability to TAKE DELIVERY

meaning that southwest airlines can play in the futures market in oil, as could valero, or fertilizer mfgr's BUT NOT GS, JPM AND THE REST OF THE HOT MONEY kings

That is an easy fix. However, some speculation in the markets has been deemed necessary to provide liquidity in the markets. Also, what does that do to pension funds etc trying to invest in hard assets to protect their investments? I'm sure the fallout would be gold prices through the roof. That would make a lot of folks here happy

[Chris Coles]

Re: Things that make you go hmmmmm.......

Is there any possibility that the tankers are simply recording the fact that, as the price per barrel rises, the flow decreases and the back up in the supply chain is in those tankers? Just a thought.

[pescamaaan]

Re: Things that make you go hmmmmm.......

It's a simple trade when the future price is significantly higher than spot: sell the futures contract, buy oil on the spot market and store it in a tanker. Deliver that oil when the contract expires and collect the spread. The wall st banks are well known for playing this arbitrage

[zoog]

Re: Things that make you go hmmmmm.......

http://www.2theadvocate.com/news/Pet...-Vacherie.html

So we have a shortage of oil driving prices.....but people are paying out the rear to store oil on tankers?

There is some really weird crap going on in the futures markets and I get the idea we are all being scammed again by wall street.

Petroplex International has paid $19 million for a 1,790-acre site in Vacherie that will be used for a 10 million-barrel petroleum storage facility, managing partner Larry Sciacchetano said Thursday.

It seems the crude storage capacity for US refineries has been declining for years...