OPEC Was Never In Control (High Frequency Trading Was) |
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dplat
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OPEC Was Never In Control (High Frequency Trading Was) |
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Hi Guys,
I found this article or issue yesterday and wanted to pass this along (consideration):
Saudi Oil Minister Ali al-Naimi to reporters: He blamed the fall in prices to half their levels of six months ago on "-- SPECULATORS --" and what he called a lack of cooperation from non-OPEC producers.
Comment By DH said:
OPEC was never in control; at least for the past decade. High Frequency Trading (HFT) of commodity contracts created a HFT premium. CME Rule 575 destroyed HFT commodity trading for the purpose of price manipulation. Prices were weaker before Rule 575 was implemented mid Sept 2014 and collapsed afterward. The $40 or so difference was the HFT premium paid to financial innovators. Not to buyers. Not to sellers. Not to traditional speculators. It was the equivalent of a street tax that was just removed. Prices today reflect actual economic activity, with probably a little crash effect from buyers of contracts a few months ago who thought prices would remain high forever. They're panic sellers now.
Refs:
http://www.reuters.com/article/2014/12/21/us-oil-prices-saudi-idUSKBN0JZ05W20141221
http://www.businessinsider.com/r-opecs-badri-says-oil-price-drop-beyond-market-fundamentals-2014-12#ixzz3MUNJgUCv
What would this imply (to drillers' accounting)?
Will High Frequency Trading Force A Market Redesign
http://www.advantagefutures.com/will-high-frequency-trading-force-a-market-redesign/
Last edited by dplat on Fri Jan 16, 2015 8:37 pm; edited 1 time in total |
Mon Dec 22, 2014 1:24 am |
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dplat
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At first I'd assumed the price drop to be over supply, oil glut, price and market share battles, but then I ran across several articles calling this "Quantitative Easing" QE4. I'm now wondering about the actual price which drillers receive.
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Mon Dec 22, 2014 2:50 am |
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dplat
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FWD from BusinessInsider dot com:
RNK wrote: "Identifying ISIS as a Sunni movement is a little too broad. You need to get a little closer if you want to form a more accurate picture. ISIS as is Al Qaeda, Al Nusra in Syria, Al Shabab in Somalia or Boko Haram in Nigeria all follow the Wahhabi ideology which is a subset of the much larger Sunni sect. The core of the Wahhabi ideology is in Saudi Arabia and that what gives the Wahhabis in Saudi Arabia such leverage over all those terrorist groups and what makes it so easy for members of any of those groups to move to other group seamlessly. While income is very important, what’s more important is getting a steady stream of recruits. To do that, the Saudi donations to various Wahhabi groups around the world established several decades ago remain crucial regardless of direct sources of income reaching those groups."
http://www.pbs.org/wgbh/pages/frontline/shows/saudi/analyses/wahhabism.html
T. Boone Pickens: OPEC Is Down, Now Let's Finish Them Off
"Guess who is paying for both sides on the War against Terrorism? You and me!" http://www.Newsmax.com/Finance/Pickens-OPEC-oil-US/2014/12/19/id/614014/#ixzz3MmtHmZAY
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Wed Dec 24, 2014 4:32 am |
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CrisAdams
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I've read on Business Insider: In November 2014, OPEC decided not to cut production which lead to low oil prices. This new stance by Al-Naimi is likely a political tactic. Saudi Arabia wants the price of oil to go low enough that American producers in the newly drilled shale basins aren't making any money. Then they might stop flooding the market, giving Saudi Arabia back its position as the world oil leader.
Saudi Arabia's tactics are working, too. The US Energy Information Administration (EIA) recently reduced its forecast for production growth in 2015 by 100,000 barrels a day.
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Tue Jan 20, 2015 5:01 pm |
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dplat
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Further proof OPEC no longer in control:
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Goldman Sachs Video: Making Sense of Industry Transformation
https://www.youtube.com/watch?v=7IN_Z9LqCog
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Last edited by dplat on Tue Feb 03, 2015 2:15 am; edited 1 time in total |
Sat Jan 31, 2015 7:49 am |
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Offshore-Wealth.com
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OIL PRICES MANIPULATED by MARKET SUPPLY and DEMAND |
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Nothing new, this happens everytime the Saudi's are threatened with new energy developments, the same we see today with fracking advancements, it is scaring the hell out of Saudi's, so they pump more oil to drive prices down. After all, this is supply and demand in its purest form, or manipulation as I would call it.
When supplies are pumped up, and the world economy slumps, you have a double barrel shotgun effect. When these new fracking operations are forced to stop for economic reasons, then the Saudi's will pull back creating a rise in oil prices. This is exactly what Saudi's did back in the 80's, so history repeats itself over and over again, so be prepared, oil will rise once again, just not this year.
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Sun Feb 01, 2015 3:42 pm |
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