Free Republic

In today’s Guest Blog spot, I decided to contact Chuck E. Cash from Forex-Trading-School.com. I wanted to get his thoughts and insight on what he thought about the current commodity markets, with Crude and Gasoline as the specific targets. Take a look below and enjoy! ========================================================= It’s hard not to notice the rally cries coming out of the political parties lately. Each side has their “solution” for the energy problem. The left wants windfall profit taxes and investigations. The right wants a tax holiday and more drilling. Lately I’ve been wondering, are the spat of energy ETFs partly to blame?...

The chart above shows that open interest (volume) for crude oil futures contracts declined by more than 16% since last November, and yet oil prices kept going up. Less oil futures trading, less speculation, but higher oil prices? Isn't is supposed to be the other way around?

SEN. John McCain recently called for a "thorough and complete investigation of speculators" to see if they've driven up oil prices. And Senate Democrats plan a new bill aimed at commodity speculators - a witch hunt that's clearly about oil. But, much as politicians would like to blame speculators, it's just not so. For starters, there's nothing about futures or options that makes it any more attractive to bet that commodity prices will go up than to bet they'll go down. Guess wrong on the direction, and you lose money. The "blame speculators" theorists have several worries. Investors in oil...

The stock market plunged 170 points this morning and oil jumped over $3, allegedly based on a New York Times story that Israel is carrying out military exercises as a rehearsal to bombing Iran. But actually, the Times story, written by the very able war correspondent Michael R. Gordon, is talking about Israeli training exercises from early June, not now. ItÂ’s a rehash story with some new details. And it does in fact confirm the market rumors of June 5 and 6 that Israel was planning an Iranian attack to stop the rogue stateÂ’s nuclear-weapons program. Recall that oil jumped...

US regulators have announced plans to impose limits on oil trades overseas. The US Commodity Futures Trading Commission said the London-based electronic exchange would have to comply with US rules. The move comes as oil prices notch up record highs, amid fears that speculators are distorting the market. As a result, fuel costs have shot up hitting the global economy. Airlines have been hit badly, with near record losses expected for 2008 in the US. US airlines were forecast to report $10bn (£5bn) of losses this financial year as sky-high fuel costs erode profits, according to the industry group Air...

Surging oil prices have often sent stock markets tumbling this year when, according to one view, investors should embrace rising energy costs because they boost the bottom line of many large-cap U.S. companies. The energy sector is now the largest earnings contributor to the Standard & Poor's 500 Index .SPX, Wall Street's benchmark for corporate America's profitability, said David Bianco, head of U.S. equity strategy at investment bank UBS in New York. Many investors see the rise in crude prices as a negative because of its potential impact on economic growth and the wallets of American consumers. That view, however,...

With oil prices closing above $125 a barrel of oil on Friday, angry politicians are blaming the higher prices on everything from speculators to greedy oil companies. Last week some Democratic Senators demanded “urgent action . . . to adequately investigate whether speculators are driving up prices.” Democrats are proposing to protect the American people from “greedy oil traders who manipulate the market.” Senator Barack Obama wants price gouging by oil companies to be a federal crime. Everyone wants lower prices, but many politicians seem unable to understand that speculators actually smooth out wild swings in prices. Speculators make profits...

Crude Oil Prices Could Be Easily Manipulated; Helped By Ridiculously Low 7% Margin Requirement for Oil Futures. We Don't Know That Oil Prices Are Being Manipulated, But They Could. The ridiculously low 7% margin requirement for crude oil futures contracts means that oil producers, big or small, could easily be manipulating the price of oil for their own benefit. That's not to say that pension funds and other hedge players aren't also going steadily long crude oil and other commodity futures. But it is in the obvious self interest of oil producers to have an ever rising price of crude....

WASHINGTON, May 23 (Reuters) - Significantly raising margin requirements on oil futures trading at the New York Mercantile Exchange (NMX.N: Quote, Profile, Research) would not rein in speculative investors and bring down crude prices, U.S. Energy Secretary Sam Bodman said on Friday. Many U.S. lawmakers blame hedge funds, pension fund managers and other speculative investors for pushing up prices for crude oil and other commodities to record levels. "I don't think that the margin requirements per se are going to have any impact on it," Bodman said in an interview on CNBC television. Legislation is pending in the U.S. Senate...

Banks, hedge funds and other financial institutions could find their investment strategies curtailed by the Federal Reserve to reduce the risk to the economy from asset bubbles, the US Treasury said on Tuesday. David Nason, the assistant secretary for financial institutions, said the US central bank should use its proposed new powers as a stability regulator to “lean against the wind” by forcing institutions to change their investment strategy if it judged they threatened the wider economy.

Taking the advice of Mayor Antonio Villaraigosa's top planning appointee, a Valley Village woman has sued the city over a new rule that allows developers to build taller, bulkier buildings if they include affordable units. Last month, city Planning Commission President Jane Ellison Usher sent an e-mail to community groups, criticizing the recently adopted density bonus ordinance and laying out a legal strategy to challenge it. On Thursday, homeowner Sandy Hubbard filed the first lawsuit using Usher's suggestions. A group of home and business owners is also considering a lawsuit. Usher and community groups have complained that the density bonus...

First the good news: Automotive expert Ed Wallace says there's no gasoline or oil shortage in the U.S. today and near-record reserves are on hand. Now the bad news: Not only has the congressional mandate for ethanol jacked up the price of food, but Washington, Wall Street and fuel producers all want you to think the gas and oil shortage they keep talking about is real. Washington, Wallace says, appears to be protecting oil speculators and ethanol producers rather than the interests of U.S. citizens who will ultimately pay higher prices for food and U.S. farmers, who are already staggering...

In a large, featureless convention centre 40 miles east of Los Angeles, more than 1,000 people have gathered early on a Sunday morning.From the stage, they are addressed in earnest by a man in tuxedo and bow tie, and they can watch the proceedings on giant video screens on either side of him. He is preaching property, and although this auctioneer's high-speed patter sounds more like a cattle auction, here they are bidding for homes. More than 100 houses are up for sale here and every two to three minutes a property goes under the hammer. Similar auctions of...

Think oil at $100 a barrel seems expensive? Speculators are already betting that the price will double to $200 by the end of the year. On the floor of the New York Mercantile Exchange (Nymex), the number of options purchased to buy oil at $200 has leapt 10-fold in the past two months to 5,533 contracts. The increase in demand is a record for any similar period according to Bloomberg News. The price for the contracts has jumped 36% since early December. Options contracts are a simple way for investors to speculate on rising prices. Buyers do not have to...

NEW YORK (CNNMoney.com) -- Greed is driving oil prices to $100 a barrel. That's a common feeling among the general public, which sees record profits for investment banks that bet on oil prices - making wealthy oil companies even wealthier - while drivers shell out $3 and more for a gallon of gas. It's also a common refrain from OPEC states. Having to defend themselves against charges their production quotas are responsible for the high prices, they point to near-average crude oil supplies and say speculation is what's behind the frenzy. But industry experts offer mixed opinions on speculative investment's...

<p>The last politician who took advice from the bond market was Bill Clinton. When he pushed for a tax hike back in 1993 to cut the budget deficit, it was under the assumption that bond investors would respond by bringing down interest rates. (The theory here is that deficits are inflationary. Inflation is bad for bonds.) Yet long-term interest rates surged from 6.45 percent when Clinton signed his tax-hike bill on Aug. 10, 1993, to 8.16 percent on Nov. 7, 1994, the day before the midterm congressional election where Republicans won back the House and Senate.</p>

WASHINGTON — Oil prices jumped to a record above $75 a barrel on Wednesday, propelled by a rally in gasoline that analysts said could send average U.S. pump prices past $3 a gallon by the weekend. Recent snags in oil-shipping and refining along the Gulf Coast have raised traders' concerns about motor-fuel supplies at a time when demand continues to rise despite soaring prices. The start of a new fiscal quarter also has brought more speculative money into the market, brokers said. "Everybody thought we'd hit a price that would create permanent demand destruction. But demand for gasoline is rising,"...

LONDON (Reuters) - Oil and gold fell more than two percent and copper dropped nearly nine percent on Monday as investors feared a rally that has taken many commodities to or near record highs may slow economic growth.

Mr. Gaines, chief executive officer of Houston-based Dune Energy and a former top institutional energy analyst, told The New York Sun that those factors could include the current shortage of gasoline inventories, a really hot summer, supply disruptions arising from troubles in Iran and Nigeria, or another serious hurricane in the Gulf, 13% of whose production is offline. These factors, he says, also could easily produce $90 to $100 oil, as well, versus Friday's close of $75.17. Equally significant are the implications for interest rates. The gushing oil price, says money manager Leonard Mohr of Los Angeles-based MCR Associates, re-enforces...

See for example this thread first. The increasing price of crude oil Has my blood beginning to boil The price spikes on unease or bad news overseas: Let's drill more on AMERICAN soil!