There’s Talk About Oil Speculators Again; Oil Prices Drop

July 28, 2009

Today Bob Pisani of CNBC called them the conspiracy theorist (see first video below). “Them” is those who know oil traders drive the price of oil, not supply & demand — and say so. Sharon Epperson said energy traders on the floor were nervous. At 6:15 this morning oil was down just 20 cents. Then Bart Chilton, one of four CFTC (Commodity Futures Trading Commission) commissioners, was a guest on Squawk Box saying they were investigating energy traders (see second video below – a good one). At 11:00 o’clock CNBC, along with their “reliable source”, Craig Donohue of the CME Group, were vigorously defending the energy speculators (see third video below). At 12:25, while discussing “Products Vs. Profits”, a news flash on the screen said “Citi is scheduled to pay an energy trader a $100 million bonus later this year” (2:19 seconds into the fourth video below). By noon oil was down $1.50.

An energy trader is going to get a $100 million dollar bonus and we are to believe speculators are not driving the price of oil??? Yeah, sure! And water is not an absolute necessity to life here on planet earth.

What’s my point? The same thing is happening now that happened the last two times there was a lot of talk about energy speculators driving up the price of oil — they start selling and the price of oil drops. Why? Who knows. But the last two times they did this, the talk was over in just a couple of days and the speculators starting driving the price back up. What does that say about all of us? It says we are all talk and no action. So it’s no wonder the traders’ “public relations firms” want to make big talk about the issue. They know it will all blow over in a couple of days and then it’s back to business as usual — just like those bankers on Wall Street.

First Video

Second Video

Third Video

Fourth Video