Raymond J. Learsy
Huffington Post – The Blog
August 5, 2013
The U.S. oil market is well supplied, with U.S. commercial crude oil inventories near all time highs, with production of U.S. oil increasing by some million barrels/day from a year ago, with weekly inventory of gasoline jumping by 800,00bbls equivalent last week alone, while Chinese demand is flat to down and the risks to Suez canal transit have abated. Yet the price of oil has jumped by some 9.5 percent over the last thirty days. This while virtually all basic commodities have gone down in price significantly.
How do I know the price of oil is rigged? I don’t, and that is the problem. There is no transparency whatsoever in the trading of oil on the commodity exchanges. We don’t know who is taking positions and for whose account. Are the oil companies themselves directly or indirectly, or the sovereign wealth funds of oil-producing nations with their billions upon billions of invest-able capital pushing up prices by buying oil derivatives ? Trading on the Exchanges, including such as the New York Mercantile Exchange or the Atlanta ‘ICE’ in oil futures/derivatives has exploded exponentially whereby paper barrel contracts dwarf actual oil production by a factor of thirty to one, I repeat, 30 to 1. (“Policy Brief #25 United Nations Conference On Trade and Development” 09.12)