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"Published: Friday, 4 Sep 2009 | 11:14 AM ET
By: Landon Thomas Jr.
The New York Times
Its superfast, supersecret oil trading software was called the Hammer.
And if the Commodity Futures Trading Commission is right, the name fit well with an intricate scheme that allowed commodity traders in Chicago working for Optiver, a little-known company based in Amsterdam, to put their orders first in line and subtly manipulate the price of oil to the company’s advantage."
Never mind hammer, what about the ice terminals that trade american oil all over and outside the u.s. without regulations? Lmao. Tons of barrels of oil are traded on the unregulated otc markets. What gives? This whole oil price manipulation story I blame fully on the CFTC.
It's a secret? Really? OPEC Is a cartel that manipulates prices based on manipulating the supply of oil since it's founding, it's been known for decades. If they stepped foot in the US they would be arrested instantly.
It's a secret? Really? OPEC Is a cartel that manipulates prices based on manipulating the supply of oil since it's founding, it's been known for decades. If they stepped foot in the US they would be arrested instantly.
In the US they would be appointed to key Government positions.
I know for a fact that oil price manipulation goes on. I see it first hand on an almost daily basis. I see traders sitting there intentionally trying to (and usually succeeding) in trying to start feeding frenzies on the spot market, goading it along with incrementally higher trade calls. And giving each other high fives and pats on the back when they succeed. Indeed the business model is built in such a way that it can only survive in an unstable serial up-down-up-down-up-down market. Were the price of oil to stabilize, or worse-become regulated, these guys would all be out of a job.
If that doesn't interest you, then consider this.
In a big "up" day (such as yesterday), they will set up what they like to call "stock transfers" with diesel. They will call as many haulers as they can and instruct them to go load up on diesel before midday price changes take effect, and then offload them into their storage tanks. The objective is as simple as it is shady: to get those barrels OFF the market and to hold (hoard) them for an unspecified length of time to resell at a higher price later. If this company does this, you can be sure that others do as well. And it's amazing at how "tight" supply becomes in an up market. After all...why sell gallons at the spot/rack level today when tomorrow that very same gallon be worth 5 or 10 or even 20 cents more? And what makes that gallon worth that much more? Nothing. The oil futures and trading markets are so disconnected from reality that they use their own concocted circular logic to justify the swings: "The market is going up because it's rising".
Is this illegal? Probably not. From a business point, it's a fast and easy buck. But is it manipulation and adding additional cost to gouge the public out of a few more cents? You bet your ***** it is.
They would do this with gas too if they could. But thankfully the ethanol, blend ratios make that a practical impossibility.
i urge people to watch the max keiser series on oil manipulation, optiver, china not honoring "fraudulent" derivatives, etc. you can click on the 8:32 video on the right hand side of the screen.
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