Posted on 12/08/2014 10:10:30 AM PST by SeekAndFind
Oh darn! I haven’t stacked enough beans and bullets yet.
http://fuelfix.com/blog/2014/12/08/hedge-funds-betting-that-opec-led-oil-rout-is-near-end/
Hedge funds are betting that the oil-price crash is close to ending.
Speculators boosted their net-long position in West Texas Intermediate crude by 14 percent in the week ended Dec. 2, the most in 20 months, U.S. Commodity Futures Trading Commission data show. Short bets contracted by 15 percent as long wagers expanded 4 percent.
Oil’s collapse accelerated after the 12-nation Organization of Petroleum Exporting Countries decided Nov. 27 to maintain output levels, underscoring the price war in crude. Oil tumbled into a bear market in October and reached a five-year low last week as the U.S. shale boom added to a global glut at a time of weakening demand growth.
“A lot of people are betting that the selloff is overdone,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund (USO) that focuses on energy, said by phone Dec. 5. “We haven’t seen these levels in years. They represent extreme value to some folks.”
More at source article
Yeah, and the government's certain bailout will make Quantitative Easing look like Suzie emptying her piggy bank.
Print, print, and print some more!
> Could rapidly falling oil prices trigger a nightmare scenario for the commodity derivatives market? The big Wall Street banks did not expect plunging home prices to cause a mortgage-backed securities implosion back in 2008, and their models did not anticipate a decline in the price of oil by more than 40 dollars in less than six months this time either. If the price of oil stays at this level or goes down even more, someone out there is going to have to absorb some absolutely massive losses. In some cases, the losses will be absorbed by oil producers, but many of the big players in the industry have already locked in high prices for their oil next year through derivatives contracts.
“It has been estimated that the six largest “too big to fail” banks control $3.9 trillion in commodity derivatives contracts.”
You have to look at what is actually meant by ‘control’. Many of these banks are prime clearing brokers, which means they hold contracts for others.
So if you open an account at Friendly Option Brokers, who clears through JP Morgan Chase, and buy 50 oil contracts, then your contracts show up as being held by JP Morgan Chase. However, if prices fall, it is you, and not JP Morgan Chase, who will be asked to put up more collateral. If you don’t do this, then your account will be sold out.
The primary broker/dealers make their money by facilitating transactions, not by taking actual risks.
RE: However, if prices fall, it is you, and not JP Morgan Chase, who will be asked to put up more collateral. If you don’t do this, then your account will be sold out.
Who’s gonna buy?
There are more and more signs the low oil price will lead to a nation in the Middle East or Russia going on a military adventure.
When your economy is tied to one commodity, and that starts to fail, desperation builds.
And we have a State department that has no idea of history or strategy
Obama told them not to worry , the US tax payer has tons of money
What capabilities does Venezuela have? I think they will have the worst hurt first.
This is all code for they’re going to probe around for another uncollaped vein in the arm of the US taxpayers to remove a few more liters of blood.
I’ll buy.
This is just a temporary situation. Lowered oil prices give Politicians cover to tax the crap out of a gallon of gas while the price at the pump falls to supposedly pay for infrastructure needs.
The Oil suppliers will start throttling back production and capping wells to drive the prices back up.
Then when it goes back up everyone will bitch at the Oil Companies not the crooks in office and the politicians will use the newly gained “revenues” to buy more votes instead of building and repairing roads/ bridges.
Wash, rinse repeat....
There is always a buyer. At what price is the question.
When it all goes under, standby by for some serious thievery. Then the wars will start and they’ll tell us how we needs to send our kids to fight them. No, this time, the war is HERE!
Russian bases.
Bases with bombers that have nuclear cruise missiles, while we have shut down our border radars.
Columbia better get ready, if they are in a condition to be a real threat.
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