Whos Really Behind the Fuel Crisis

Fuel speculators, is I am certain the main culprit behind why world fuel prices have gone up to USD$140 per barrel. It obviously doesn’t take a genius to see that there can’t be a 3 fold increase in fuel consumption around the world the past few years, for prices to go up from USD$30 to USD$145. All this while fuel production from Opec has been increased by 2.1 times to accommodate this fuel ‘shortage’. Even this is not enough to bring fuel prices back to normal.

So if fuel consumption has barely increased and fuel production has more than doubled, whats really happening? Where is all this oil going to? Heres how the speculators work. Companies like Goldman Sachs, JP Morgan Chase, Sanford C. Bernstein & Co and Morgan Stanley in NY invest in whatever they think could make money. So they by oil on the free market from Opec and other countries that produce it. They usually buy as much as they can, and as a result the strain of supply pushes the market up. When this happens, these speculators diverge and sell their commodities back to the market at a regulated pace as to not over supply the market while keeping the prices up. Many believe so. A report the U.S. Congress released Monday showed that, in January 2000, 37 percent of the NYMEX crude futures contracts were held by speculative traders; but in April 2008, the number has soared to 71 percent. This was exactly what these companies did during our last currency crisis back in the nineties. Besides the NYMEX (NY), the ICE Futures Exchange in London and the Dubai Exchange are also places where oil speculation is happening now at a very alarming rate. Greedy bastards, half the world is suffering.

This is why you don’t see a very busy world shipping schedule these days. Tankers are used to store the fuel that speculators buy from the market. They usually do not sail anywhere but simply float around waiting for the fuel they carry to be sold again on the market for a higher price. In other places fuel depots are used to keep fuel for a few moths and slowly sold back to the market at a regulated pace. Fuel companies like BP, Shell and Exxon actually encourage speculators to rig the markets as these companies tend to gain when fuel producing countries use their services to explore and extract more oil than usual from designated fields. Also their refineries would now run at a max capacity to refine oil to fuel. Just look at their profit margins these last few years.

In asia, fuel is traded at the Singapore exchange due to it being close to singapore’s oil processing plants and the Keppel fuel depot where storage takes place. Looking at the trend, the speculators will operate in asia the same way it operates in NYSE. As a result, the entire world pays twice as much as they really should on fuel thanks to the rich, powerful and greedy fuel speculators who make billions a day doing this.

The only way for Opec to block speculators is to firm up oil trading at the exchange by setting up a special oil exchange that only countries could participate in to buy or sell oil directly with each other. This was you cut out all the NY based speculators from trading and they will loose hundreds of billions when they can’t sell the oil the have bought to any country on earth, except for at a dirt cheap price. This will fix them and kick them out once and for all from ever meddling with oil. We must act now.