KauaiOrca said:

qman said:

KauaiOrca said:

xFrockx said:

It is a lot more complicated than that. There is a reason why people can spend their entire lives trying to understand how the oil market works and die never fully understanding it.

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Prices in oil, for the most part, are fixed.  It's a rigged system.  There is no doubt that the US and the Saudis got together and decided to bring prices down to hurt Iran and Putin.  And it worked.

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"Prices in oil, for the most part, are fixed. It's a rigged system"

What's the fix?  $146 or $35 per barrel?  Do you remember 1997?  Down to $12 per barrel!!  It's a globally traded commodity, there's NO FIX!!

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Many things (equities, bonds of all types, derivatives, currencies, metals, commodities, etc) are traded globally … that has absolutely nothing to do with whether their prices are manipulated or not.  Energy markets are  highly manipulated.

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qman said:

"highly manipulated"

Higher or lower, how would you even know?  For what reason?  No government or group of people can manipulate any global commodity for any length of time.

The prices of all asset classes are pushed around by policymakers, everyone already knows this basic fact, if it was all "manipulated" there wouldn't be any market participants or any MARKETS.

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Stonehenge said:

I think the answer is that big people and groups can influence the price of commodities but can't control it. In the short run they can make blips on the chart but supply and demand are king same as they always have been.

This I don't understand, please explain.

>Putin alone, it is estimated can tap into over 100 trillion in trading leverage when he needs to.

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KauaiOrca said:

Stonehenge said:

I think the answer is that big people and groups can influence the price of commodities but can't control it. In the short run they can make blips on the chart but supply and demand are king same as they always have been.

This I don't understand, please explain.

>Putin alone, it is estimated can tap into over 100 trillion in trading leverage when he needs to.

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The truth is, most of the money that is traded or at least is "credited" as backup for trading doesn't exist.  It is LEVERAGE enabled by margin levels and absolute insane leverage ratios, in some cases 100-200:1.  Meaning, if a person has a hundred million in real assets, they can control trading power of 1-10 TRILLION dollars through derivatives contracts. 

Supply and demand as you call it is an old school term that used to have something to do with production and consumption.  Sure, if a farmer grows a ton of corn but the people in HIS COMMUNITY eat/consume 1.2 tons then the price is going up.  But that's not how it works.  Most of the people (but not all) buying, trading, leveraging derivatives have NOTHING to do with consumption … this is true with corn, beef, oil, coal, copper, gold, currencies, etc.  If a group of global investors get together and say they want to bring down the price of something and are willing to pool together a few trillion of leveraged assets to do it, then yes, they can do it.  For instance, if the Saudis knew well in advance that they were going to, with the US help, bring oil prices down from $120 to a target of $45 then they could buy boatloads of short contracts on oil as it went down from say $120-$75 and they would be making more money than if oil was being sold at a higher price.

Because countries like Saudi Arabia, Russia and much of Eastern Europe has absolutely no monitoring or restraint on this kind of trading, we can't stop it.  And there are a lot of smart people that think Putin and his buds simply use the news they are going to create as a way to move markets where ever they want.  Anyway, there is no shortage of oil, hasn't been in a long time and there's no reasonable supply and demand argument to explain why the world's most important resource drops in price by over 50% in a few short months.  That's absolutely insane.  It's manipulation made possible by absolutely crazy levels of leverage made possible by the global financial system that makes money without producing anything.

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KauaiOrca said:

What I'm saying is that the same players can dramatically increase supply or over supply and make giant bets that cash in on whichever way it moves.  It's not about "fixing" the price it's about moving it in the direction they want it to go and then letting the magic of momentum and computer driven trading do the rest.  The biggest traders just want prices to move because they make money in both directions.

Are you aware how much of the trading has ZERO to do with fundamentals like supply and demand?  Trading is what determines pricing and where it goes.

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qman said:

KauaiOrca said:

What I'm saying is that the same players can dramatically increase supply or over supply and make giant bets that cash in on whichever way it moves.  It's not about "fixing" the price it's about moving it in the direction they want it to go and then letting the magic of momentum and computer driven trading do the rest.  The biggest traders just want prices to move because they make money in both directions.

Are you aware how much of the trading has ZERO to do with fundamentals like supply and demand?  Trading is what determines pricing and where it goes.

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Trading includes other aspects such as Dollar strength/weakness, economic growth statistics, oil in storage, ect. 

If it was so obvious where "the biggest traders" want the direction of prices to move, everyone would follow their exact trades, but as you know it doesn't work at way, it's still a very big market full of many big traders.

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