Thread: Oil Tumbles as Signs of Slowing Economy Spur Commodity Selling

Your Silver Elite WorldPerks # is 540911335
Dear Roger Metcalf,

An Open letter to All Airline Customers:

Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now. Visit www.StopOilSpeculationNow.com.

For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers.

Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem. We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com.

Robert Fornaro
Chairman, President and CEO
AirTran Airways

Bill Ayer
Chairman, President and CEO
Alaska Airlines, Inc.

Gerard J. Arpey
Chairman, President and CEO
American Airlines, Inc.

Lawrence W. Kellner
Chairman and CEO
Continental Airlines, Inc.

Richard Anderson
CEO
Delta Air Lines, Inc.

Mark B. Dunkerley
President and CEO
Hawaiian Airlines, Inc.

Dave Barger
CEO
JetBlue Airways Corporation

Timothy E. Hoeksema
Chairman, President and CEO
Midwest Airlines

Douglas M. Steenland
President and CEO
Northwest Airlines, Inc.

Gary Kelly
Chairman and CEO
Southwest Airlines Co.

Glenn F. Tilton
Chairman, President and CEO
United Airlines, Inc.

Douglas Parker
Chairman and CEO
US Airways Group, Inc.

After a little searching, I found this:

Dear Santa Claus,

An Open letter to All Christmas Customers:

Our flock is facing a possible sharp economic downturn because of the adoption of the Gregorian Calendar, but by pulling together, we can all do something to help now. Visit www.StopChristmasNow.com.

For turkeys, Christmas means thousands of lost jobs and severe reductions in life for both large and small communities. To the broader economy, Christmas means slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers.

Since Christmas is partly a response to the onset of December, the nation needs to focus on increased vegetarianism. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated chefs.

Twenty years ago, 21 percent of turkeys were purchased by speculators who trade us on paper with no intention of ever taking delivery. Today, turkey speculators purchase 66 percent of all Christmas futures contracts, and that reflects just the transactions that are known. Speculators buy up large numbers of turkeys and then sell them to each other again and again. A turkey may trade 20-plus times before it is delivered and brutally killed; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per turkey in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with cancelling Christmas, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated turkey market and permit the flock to prosper.

The nation needs to pull together to reform the turkey markets and cancel Christmas. We need your help. Get more information and contact Congress by visiting www.StopChristmasNow.com.

Robert Fornaro
Chairman, President and CEO
Gobble.com, Inc.

Bill Ayer
Chairman, President and CEO
Vegan Trust

Gerard J. Arpey
Chairman, President and CEO
Christianity Kills LLC (little lovely chickens)
...

I think the two may be related. We should be told!

Two articles and no links. I think this article is also above.

Anyway, as far as crude commodities are concern, do any poster own crude on the Commodities market? I think the symbol is CL (Crude Light).

Last look, Oil ain't tumbling these days. Anyhow, it's all the fault of you-know-who...

Dunno wild swings up to 147 then back down to 143...market is going mental. I do think we will see back under 100 at some point. This is pure fear driving the market, no other explanation.

Markets are always mental, that's why you can't rely on them,

Free markets doesn't work and this other bubble is proof than it feeds on anything except economics logic,

Originally Posted by Butterfly

Markets are always mental, that's why you can't rely on them,

Free markets doesn't work and this other bubble is proof than it feeds on anything except economics logic,

What would Warren Buffet do now?

Originally Posted by Boon Mee

What would Warren Buffet do now?

Sing ? Sorry that's Jimmy Buffet........

Nibblin' on sponge cake,
watchin' the sun bake;
All of those tourists covered with oil.
Strummin' my six string on my front porch swing.
Smell those shrimp–
They're beginnin' to boil. Wasted away again in Margaritaville,
Searchin' for my lost shaker of salt.
Some people claim that there's a woman to blame,
But I know it's nobody's fault.
Don't know the reason,
Stayed here all season
With nothing to show but this brand new tattoo.
But it's a real beauty,
A Mexican cutie, how it got here
I haven't a clue.
Wasted away again in Margaritaville,
Searchin' for my lost shaker of salt.
Some people claim that there's a woman to blame,
Now I think,– hell it could be my fault.
I blew out my flip flop,
Stepped on a pop top;
Cut my heel, had to cruise on back home.
But there's booze in the blender,
And soon it will render
That frozen concoction that helps me hang on.
Wasted away again in Margaritaville
Searchin' for my lost shaker of salt.
Some people claim that there's a woman to blame,
But I know, it's my own damn fault.
Yes, and some people claim that there's a woman to blame,
And I know it's my own damn fault

On a more serious note - watch this video.
No matter what you think of Newt, his points are right-on:

YouTube - 3 Ways to Lower Gas Prices

Originally Posted by Milkman

wo articles and no links. I think this article is also above.

Both Bloomberg - one in the morning one late last night.

Thought I had pasted a link in.

Sorry milky you miserable sod.

Originally Posted by mrsquirrel

Crude Oil Jumps More Than $5 as Trading Programs Trigger Buying
By Mark Shenk
July 10 (Bloomberg) -- Crude oil rose more than $5 a barrel in the last hour of New York floor trading as prices breached a level that triggered computer-generated buying programs.
Prices rose earlier today because Iran test-fired more missiles in the Persian Gulf and a Nigerian militant group said it will end a cease-fire this week. The increase accelerated after futures broke through the previous day's high of $138.28 at 2:09 p.m. after approaching it at least five times today.
``The market was set to rally,'' said Addison Armstrong, director of market research at TFS Energy LLC in Stamford, Connecticut. ``We kept approaching the $138.20 area and when prices finally made it through yesterday's high, length came into the market.'' Length refers to bets that prices will rise.
Crude oil for August delivery rose $5.60, or 4.1 percent, to settle at $141.65 a barrel at 2:53 p.m. on the New York Mercantile Exchange, the biggest one-day increase since June 6. Prices rose as much as $6.05 to $142.10 a barrel today. Oil touched a record $145.85 on July 3. Futures are up 95 percent from a year ago.
``The market is very volatile,'' said Adam Sieminski, Deutsche Bank's chief energy economist, in Washington. ``There was no big headline at the end of the day.''
Iran, holder of the second-biggest oil reserves, tested missiles capable of reaching Israel, increasing concern that a conflict may cut supply. The Movement for the Emancipation of the Niger Delta said attacks will resume attacks on oil facilities.
``Eventually we will see new records, probably because of a geopolitical headline,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. ``A renewal of attacks in Nigeria or fireworks on the Iranian front could be the spark that sends us there.''
Iranian Tests
Iran's military today fired the missiles during a third day of war games, Agence France-Presse reported, citing the Web site of Iranian state-run television. Missiles were also launched yesterday.
Iran has ignored United Nations efforts to halt its uranium- enrichment program and says further sanctions won't affect its plans to develop nuclear energy. The U.S. has led international efforts to force Iran to give up enrichment because of concern the technology may be used to develop nuclear weapons.
OPEC Secretary-General Abdalla El-Badri said at a press conference in Vienna today that he hoped there would be no military conflict between Israel and Iran, adding that ``if something were to happen, it is impossible to replace the production of Iran.''
Cease Fire
The Nigerian militant group known as MEND will call off its unilateral cease-fire beginning midnight on July 12, the group's spokesman, Jomo Gbomo, said today. MEND has helped cut more than 20 percent of Nigeria's crude oil exports since 2006 by attacking pipelines and other installations.
MEND says it is fighting for a greater share of oil wealth for the impoverished inhabitants of the Niger Delta and accuses successive Nigerian governments of decades of oppression.
The group declared a unilateral cease-fire after a June 19 attack against Royal Dutch Shell Plc's Bonga deep-water oilfield, located 120 kilometers (75 miles) offshore, that cut 190,000 barrels a day of oil output.
``The missile tests and the end of the cease-fire are going to put a higher and higher floor under prices,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York.
Demand Forecast
The International Energy Agency increased its 2008 demand forecast for the first time in six months today, because of rising consumption in developing countries.
The Paris-based agency increased its outlook by about 0.1 percent, or 80,000 barrels a day, to 86.85 million barrels a day in its monthly report, leaving demand growth at 1 percent for this year. The IEA forecasts the same pace of growth for 2009.
The Organization of Petroleum Exporting Countries, which supplies more than 40 percent of the world's oil, cut its forecast of demand for its own crude oil through 2030, as record prices and environmental considerations encourage consumers to conserve fuel and rely more on biofuels.
OPEC lowered demand forecasts by 4.4 percent to 32.3 million barrels a day in 2015, and by 12 percent to 43.6 million a day in 2030, the group's secretariat said today in its World Oil Outlook report. This means OPEC may unnecessarily commit $300 billion to new fields over the next 12 years, it said.
OPEC Threat
``OPEC doesn't like the fact that we are turning more and more to biofuels,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``There's an implicit threat that OPEC will cut investment in new production because of their unhappiness.''
Brent crude oil for August settlement rose $5.45, or 4 percent, to settle at $142.03 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $146.69 on July 3.
To contact the reporter on this story: Mark Shenk in New York at mshenk1[at]bloomberg.net.

Bloomberg.com: News

Link

Originally Posted by Carnwadrick

You guys are too serious about this stuff..the real deal is the oil world is scared that if Obama gets in he will levy the oill companies with huge winfall taxes

The prob here is that many "American" oil companies are based in off-shore tax havens where the IRS cannot touch them. And why not tax the crap outta insurance cos and other biggies that have billions in cash on their books? Walmart comes to mind (only $8 bil in cash). Sure Exxon makes huge gains, but it also paid almost $30 bil in taxes last year.

Originally Posted by Norton

Originally Posted by mrsquirrel

Up again after Iran test fired a potato gun

Originally Posted by Begbie

Triggered by the drop in the price of oil.

Guess this proves the "speculators" have nothing to do with oil price.

There are way more investors in future/options now than ever before. They are not the reason for high oil prices. Comparison: the price of rice has skyrocketed, too, and there is no futures trading in this commodity. It's supply and demand.

Originally Posted by good2bhappy

138.39 DPB - Brent crude

Most oil prices are based on WTI.

Originally Posted by Jet Gorgon

It's supply and demand.

Show me where supply decreased or demand increased because Iran conducted a missile test? IMO, oil price hikes in this case are based on pure speculation!

^ of course it is, investors rush to be first as they see an opportunity, price rises

it's the usual bigger fool theory,

Some people need to read books about history of financial markets, very refreshing when things get hot

Originally Posted by Norton

Originally Posted by Jet Gorgon

It's supply and demand.

Show me where supply decreased or demand increased because Iran conducted a missile test? IMO, oil price hikes in this case are based on pure speculation!

Expectations (probability-based) of future supply decreased with the test. Hence the price increase. Simple really.

^ translation: projecting wishful thinking

^Perhaps to some, to others projected pain. The projection itself remains correct.

^ projecting is not realizing, just so you know

^You are aware that the price quoted for oil is for delivery in the future?

As you are keen on translations, this means it is a projected delivery at a projected price...

unfortunately projected isn't actual, hence it wouldnt be called future.

Saw on the TV news tonight some UK company has hit the big time drilling for oil in Siberia. Supposed to be a billion barrel find. Cant find anything on Google to confirm it yet.

Originally Posted by britmaveric

unfortunately projected isn't actual, hence it wouldnt be called future.

How simple do you need it?

The oil price quoted is always for a future delivery. You must of heard the media say 'price of crude for October delivery', etc.? FFS!

Now, guess what? That future delivery is not actual! It has to be pumped, shipped, delivered and paid for.

Hence, all oil prices are based on projected delivery and payment. In the mean time, anything can happen; Iran gets nuked, the dollar (which you were going to pay for the stuff) collapses, the foking ship carrying the stuff sinks in the Bermuda Triangle - anything!

So, yes, Mad Mullahs firing missiles around is quite important to the price of oil, as it directly affects the supply at the point in the future which the current oil price relates to.

^ and your point is ?

you don't have any, that's your problem. Keep posting news clip, at least you don't make yourself look like a bigger fool that you already are,

actually you do either way