Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Gasoline Supplies Highest for July Period Since 1992

Commodities / Gas - Petrol Jul 19, 2013 - 08:55 PM GMT

By: EconMatters

Commodities

Refiners actually try to keep low inventories to have illusion of ‘tighter’ markets

Gasoline supplies had a substantial build in inventories, up 3.1 million barrels, and looking back at the EIA data, July is in the heart of the summer driving season, and refineries run at their highest utilization rates. Well, there has never been a period in July where inventories are as high in gasoline supplies as currently exists in recent energy statistics. We have to go all the back to 1992 to find supplies for the July period higher than they are right now, and it isn`t by much.


Oil Market Propaganda

It is funny all the propaganda that consumers get fed as to why they pay so much at the pump, it is all total hogwash. The oil market is one of the most rigged markets that actually have fundamental uses for the product. Stocks are rigged in many ways, earning`s reports are gamed via stock buybacks to beat on the EPS, but these companies are really missing bad if you look at the revenue misses. Mind you, revenue targets are set so low that these companies cannot possibly miss, yet companies have been missing consistently for the past couple of years.

Expect Higher Gasoline Inventories Next Week!

But there isn`t a fundamental market use for stocks like a commodity which has consumers who buy a product to get to work each day. One where it makes sense for example if supplies are high, i.e., not a tight market, that prices should come down to lower supplies and sell more product. This is what happens in a fair market which is not rigged. Consumers should be infuriated that they are paying some of the highest prices for gasoline when oil supplies are very high, domestic oil production is at 20 year highs, and gasoline inventories are higher for this time of year than any time in the last 22 years!

Congress is Investigating the wrong Culprits

Talk about getting ripped off! It was interesting that Congress`s response was to bring the refiners into recent hearings to discuss why prices jumped so much lately. I imagine refiners getting screwed by the collapse in the WTI-Brent spread, probably are going into futures markets and pushing up product prices to help their margins since they can no longer count on a $25 dollar spread to fatten their margins. So they are to blame I am sure to some extent, but Congress needs to focus on the Banks and Hedge Funds, they are the real culprits for outrageous prices here.

J.P. Morgan`s Trading Group Started this Volatility Trading Rally

It all started with J.P. Morgan`s call that they believe commodities have gone down far enough and that they should be bought. This was the start of the move up in oil, and thus product prices. You can rest assured that they have profited nicely on this move. So Congress needs to bring the investment banks that specialize in running up these energy prices, and they will see a pattern of abuse the last five years. These same firms make their public research calls, after they are properly positioned, and then strategically push up prices as high as they can.

Trucking, Airlines, Retail, Restaurants all Pay for J.P. Morgan`s Energy Trading Profits

This usually ends in dramatic drops in demand because prices are too high for consumers and the economy starts decelerating. And why shouldn`t it? Think in terms of the trucking industry that has to use fuel to transport all kinds of goods across this country; their operating costs just went up 15% in a month! The other way this ends is the president threatens an SPR release, I know kind of stupid with record levels of supplies. But the speculators run out of the market like rats in a flood of selling. The other way speculators get out of this bullish run-up is equities or other assets get sold off, and given that oil is more tied to equities than the actual consumers, it gets sold off with equities.

The Investment Banks artificially create “Volatility” in the Oil Markets

So forget about the refiners Congress, the investment banks are the ones that you need to bring in front of congress! Subpoena their trading records for the last five years and the patterns of manipulation will emerge rather clearly. This run-up like all the others is for trading profits. There never are real supply issues in the oil market.

WTI $12 Higher Than EIA Average Price for the Commodity

The EIA has an average price for oil at around $94 a barrel for the year. Oil could basically trade at $94 a barrel 365 days a year give or take a dollar or two. But these investment banks like Goldman Sachs, Morgan Stanley, Barclays, and J.P. Morgan cannot make any money with a steady, stable market.

These firms need to “manufacture” supply shortage scenarios to create volatility in the energy markets so they can make money.

Mark my word, these same firms will be talking about how gasoline supplies are heavy for this time of the year in a couple weeks when they push oil back down to $90 a barrel. This happens 7 or 8 times a year for the last 5 years. It is all a “volatility trading scam” to make money!

This is what Congress should be investigating, and not a bunch of refiners trying to make a little margin. Get your act together, and bring in J.P. Morgan and Goldman Sachs these are the real reason consumers are getting screwed at the pumps once again!

If I-Banks Love Energy so much, Make them Take Physical Delivery!

I repeat gasoline supplies for this time of year are higher than at any time in the last 20 years, and it isn`t even close. Moreover, there are plenty of oil inventories, well above historical levels, if refiners need any more gasoline.

So why in the heck are consumers paying record prices right now? This is the definition of a “Rigged Market”, and these are the questions that Congress needs to be asking these banks.

The alternative which is what I favor to get right down to the crux of the issue would be to overnight make everyone holding a futures position in every energy market take delivery of the contract!

Short of this I would threaten release of the SPRs to make the speculators pay for trying to push/rig a market for the creation of “volatility trading profits”! It is hard to have a losing day trading for a quarter when Congress is busy interviewing refiners, while the I-Banks can move Oil up and down $15 dollars many times a year without any consequences from Congress!

By EconMatters

http://www.econmatters.com/

The theory of quantum mechanics and Einstein’s theory of relativity (E=mc2) have taught us that matter (yin) and energy (yang) are inter-related and interdependent. This interconnectness of all things is the essense of the concept “yin-yang”, and Einstein’s fundamental equation: matter equals energy. The same theories may be applied to equities and commodity markets.

All things within the markets and macro-economy undergo constant change and transformation, and everything is interconnected. That’s why here at Economic Forecasts & Opinions, we focus on identifying the fundamental theories of cause and effect in the markets to help you achieve a great continuum of portfolio yin-yang equilibrium.

That's why, with a team of analysts, we at EconMatters focus on identifying the fundamental theories of cause and effect in the financial markets that matters to your portfolio.

© 2013 Copyright EconMatters - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

EconMatters Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in