U.S. Considers Curbs on Speculative Trading of Oil
"My firm belief is that we must aggressively use all existing authorities to ensure market integrity," Gary Gensler, the chairman of the Commodity Futures Trading Commission,
said in a statement.
By EDMUND L. ANDREWS/AP
Published: July 7, 2009
WASHINGTON — Reacting to swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering trading restrictions on hedge funds and other “speculative” traders in markets for oil, natural gas and other energy products.
In a big departure from the hands-off approach to market regulation of the last two decades, the chairman of the Commodity Futures Trading Commission, Gary Gensler, said his agency would consider new limits on the volume of energy futures contracts that purely financial investors would be allowed to hold.
The agency also announced that it would pull back part of the veil on the oil and gas markets, publishing more detailed information about the aggregate activity of hedge funds and traders who arbitrage between domestic and foreign energy prices.
“My firm belief is that we must aggressively use all existing authorities to ensure market integrity,” Mr. Gensler said in a written statement.
Mr. Gensler announced that his agency will hold several hearings in July and August, the first of which will examine whether to impose federal “speculative limits” on futures contracts for energy products.
Oil prices have swung wildly in the last year, hitting about $145 a barrel last summer, then plunging to $33 in December before rising to about $70.
Much of that gyration stemmed from chaos in the global financial system, as banks and much of Wall Street came perilously close to collapse last September and the global economy fell into the most severe recession in decades.
But a growing number of critics have blamed some of the extreme volatility on the role of purely financial investors — those who are simply betting on the direction of energy prices, as opposed to those who actually use such products, like airlines.
The Commodity Futures Trading Commission, an independent regulatory agency that regulates the trading of futures contracts for commodities ranging from wheat and corn to oil, precious metals and currencies, has for years followed a deregulatory path that rarely interfered with the burgeoning markets they regulated.
Federal officials said “speculative” traders were primarily those that the agency defines as “non-commercial,” which are essentially financial investors who are not users or producers of the commodities and are primarily interested in betting on the direction of prices. “Commercial users,” by contrast, include farmers, airlines and oil companies that want to hedge against the risk of rapid price changes.
Non-commercial traders accounted for almost a fifth of the activity in several major oil and gas products for the week that ended June 30, according to data compiled by the commodities agency.
Mr. Gensler, who was nominated by President Obama and took over the agency earlier this year, made it clear that he is pushing toward tighter regulation on several fronts. His efforts mirror actions taken by the Justice Department to strengthen antitrust enforcement and by financial regulators to police banks and investment firms much more closely.
Mr. Gensler noted that his agency already imposes volume limits on speculative trading in agricultural products like wheat and corn. But in the case of energy products, the agency allows the futures exchanges — primarily the New York Mercantile Exchange — to set limits.
A future is a contract to buy or to sell a particular volume of a commodity by a particular date. Futures contracts were originally created to help farmers shield themselves from price volatility between the time they planted their crops and the time of harvest. But futures are now used to hedge price swings in everything from oil and gas to electricity, Treasury bonds and foreign currencies.
In the case of energy products, Mr. Gensler said, the exchanges were not required to set or enforce position limits aimed at preventing “excessive speculation.” The contrast between approaches taken for agricultural and energy commodities, he said, “deserves thoughtful review.”
Mr. Gensler added that the agency would be reviewing the manner in which traders receive exemptions from trading limits by claiming the need to carry out “bona fide hedging transactions.
SPEKULATOR BUKAN OPEC PENENTU HARGA MINYAK
SPECULATIVE TRADING OF OIL TO BE CURBED
WORLD OIL PRICE PREDICTED TO BE BELOW USD20 PER BARREL
Glut of oil could push gasoline prices back down below $2 a gallon
Foto: Gasoline prices are shown at filling stations in Chicago this week. One energy expert says oil could fall to as little as $20 a barrel by the end of the year. That could push gasoline prices back down to $2 a gallon, prices not seen since last fall’s slide slammed retail gasoline to its lowest value in four years.
Energy experts say oil supply is outstripping demand. Eventually suppliers will tire of paying to store all of the surplus oil and flood the market, they predict.
By Ronald D. White
Frank Polich/ Bloomberg News
July 4, 2009
A year after oil hit a record closing price, the commodity's price is way down -- and may fall significantly further as supply continues to dwarf demand.
Downward pressure on oil prices is so great that crude could trade for as little as $20 a barrel by the end of the year -- less than a third of what it traded for this week and an 86% drop from its peak last y
That could push gasoline prices back down to $2 a gallon, prices last seen this March after last fall's slide slammed retail gasoline to its lowest value in four years.
The reasons are simple, said Philip K. Verleger Jr., an expert on energy markets at the University of Calgary in Canada: The still-sputtering economy has lessened demand at a time when there is already a big surplus of oil.
For eight straight months, oil supplies have been running about 2 million barrels a day higher than the global demand of 83 million barrels a day, Verleger said. Eventually, he and others predicted, suppliers will tire of paying to store all of the surplus oil and flood the market.
"That is the largest and longest continuous glut of supply that I have seen in 30 years of following energy prices," Verleger said. "It's a huge surplus. There has never been anything like it."
The market will eventually correct itself, pushing prices down, Fadel Gheit, senior energy analyst for Oppenheimer & Co., wrote in a note to investors. "Excessive speculation and a weak dollar have lifted oil prices to levels not sustainable by market fundamentals," Gheit wrote.
Crude has traded in the range of about $70 a barrel for much of the last month, closing Thursday at $66.73. The markets were closed Friday.
With so much oil available and so little need for that amount, investors, oil companies and even some banks have bought and stored surplus oil everywhere they can. By one estimate, before oil surged to its high this year of $73.38 a barrel in June, as many as 67 supertankers -- each capable of carrying 2 million barrels of oil -- were being used as floating storage.
Verleger said it represented a largely risk-free investment for those who could sell that oil for huge profits on the futures markets.
But the glut has gone on for so long, he said, that the cost of all of that storage is bound to rise. When it rises enough, some suppliers will refuse to pay and a lot of that oil will be dumped onto the market.
"Oil will drop to $20 a barrel by the end of the year because this situation just cannot be sustained," Verleger said.
Bob van der Valk, a fuel price analyst, predicted that oil would drop to $40 by the end of the year and that Californians would be paying about $2 a gallon for regular gasoline.
"In normal years you have seasonally adjusted pricing, and 2009 is looking like our first normal year since 2006," Van der Valk said. "By year's end, oil and gasoline will be coming down."
That would be a result similar to 2008, when crude oil futures went from their highest close of $145.29 a barrel last July 3 to less than $34 a barrel in December, and gasoline prices dropped accordingly.
Other analysts said such thinking was premature.
Phil Flynn, vice president and senior market analyst for Alaron Trading Co., said the real test would be in the coming weeks, when oil's direction would become clearer.
"It's too soon to say that a correction is about to occur," Flynn said.
ron.white@latimes.com
HARGA BAHAN API MALAYSIA BELUM TURUN
Kerajaan Malaysia amat pantas dan cekap menaikkan harga bahan api tempoh hari. Sehingga kini belum ada ura-ura untuk menurunkan harga diesel dan petrol walhal harga minyak mentah di pasaran dunia telah turun (sila lihat graf). Kesan berganda dan bersinergi kenaikan harga bahan api dengan harga barangan keperluan industri serta asasi seperti makanan tidak mungkin dapat dibendung atau dikurangkan. 
Harga minyak dunia turun, kerajaan didesak tunaikan janji - Dr Hatta
Intan Abdullah
Harakahdaily
KUALA LUMPUR, 29 Julai (Hrkh) - PAS mendesak kerajaan Barisan Nasional (BN) menurunkan harga minyak di negara ini selari dengan penurunan harga minyak dunia.
Dalam satu kenyataan kepada Harakahdaily pagi tadi, Bendahari PAS, Dr Mohd Hatta Ramli meminta kerajaan agar bersikap lebih serius malah mengotakan janji mereka yang sebelum ini akan menurunkan harga minyak selari dengan perubahan harga minyak di peringkat antarabangsa.
"Kerajaan perlu mengotakan janji mereka, kerana sebelum ini Dato' Shahrir Samad sendiri pernah berjanji akan menurunkan harga minyak berdasarkan harga minyak dunia," ujarnya.
ImageMengulas perkembangan semasa,Dr Hatta berkata harga minyak di Singapura telah pun diturunkan beberapa kali dalam tahun ini namun, Malaysia yang berstatus negara pengeluar minyak atau negara Opec masih tidak mampu melaksanakannya.
Beliau menempelak kerajaan Malaysia yang masih tidak menunjukkan tanda-tanda bahawa mereka serius membela masalah dan kebajikan rakyat.
"Ia merupakan suatu tamparan hebat kepada Malaysia kerana Singapura merupakan negara pengimport pun berusaha untuk menangani masalah rakyat mereka sedangkan kita sebagai negara pengeluar minyak tidak mempunyai apa-apa inisiatif bagi menjaga kepentingan rakyat," katanya.
Menurutnya, apa yang terjadi mencerminkan sikap kerajaan yang tidak prihatin malah langsung tidak mempedulikan nasib dan penderitaan rakyat.
"Kita lihat tiada inisiatif diambil pihak kerajaan dalam meringankan beban harga minyak dan inflasi tinggi yang ditanggung rakyat, tetapi masih berada di peringkat akan mengkaji harga minyak pasaran," katanya lagi.
Pada masa yang sama, beliau berkeyakinan bahawa harga minyak negara ini berpotensi untuk kembali kepada harga asalnya selari dengan penurunan harga minyak dunia yang semakin giat berlaku.
"Adalah tidak mustahil jika harga minyak kita boleh kembali seperti asalnya, sebab itu saranan Dato' Seri Anwar bahawa Pakatan Rakyat boleh menurunkan harga minyak sebaik memerintah.
"Jika singapura boleh melakukannya, kita sepatutnya lebih mampu menurunkannya," tegasnya.
Menurut laporan beberapa media di negara jiran tersebut, harga minyak petrol turun lagi semalam, sebanyak 10 sen setiap liter yakni penurunan terbesar sejak Ogos 2003 dan ia merupakan kali kelima harga minyak petrol turun dalam tempoh 20 hari.
Semalam, langkah tersebut dimulakan oleh Shell, yang kemudian diikuti Caltex, Singapore Petroleum Company (SPC) dan Mobil.
Dengan penurunan harga itu, harga minyak petrol sebelum ditolak diskaun di kedai minyak sekarang adalah $2.110 seliter bagi petrol oktana 98, $2.036 seliter bagi petrol oktana 95 dan $2.003 seliter bagi petrol oktana 92.
Harga minyak petrol premium sebelum ditolak diskaun pula adalah $2.239 seliter bagi Shell V-Power dan $2.236 seliter bagi Caltex Platinum.
Menurut para penganalisis, harga minyak petrol turun kebelakangan ini kerana kebimbangan tentang permintaan minyak semakin reda.
Harga minyak mentah mencecah paras AS$100 setong pada awal tahun ini, sebelum meningkat ke beberapa paras rekod akibat kebimbangan mengenai permintaan minyak yang terus bertambah ekoran ketegangan antara Barat dengan Iran mengenai program nuklear Teheran.
Ketidakstabilan di Nigeria, salah sebuah negara pengeluar minyak Afrika utama, turut menjadi faktor, kata para pemerhati.
Berdasarkan laporan yang dikeluarkan Dowjones Newswires, harga minyak boleh jatuh ke paras AS$70 dan AS$80 setong jika dolar Amerika terus kukuh dan kebimbangan mengenai Iran berkurangan, kata ketua Pertubuhan Negara-Negara Pengeksport Minyak (Opec), Chakib Khelil, Sabtu lalu.
OILY NATURE OF PRESENT SITUATION
The world as one global village concept is ever more true and frightening. A butterfly flaps its wing in New York, the ripple or the waves are felt in KL and elsewhere on the planet earth. Citizens of the world must think hard about the oily nature of the current situation viz depleting world energy sources, war, high cost of fuel, inflation going to recession and the list goes on and on. Perhaps someone might take the challenge of the job vacancy advertised on the post below.
Wall Street ends mostly lower on economic worries
"The dollar rose on recent supportive comments by U.S. officials, prompting selling by investors who had bought commodities such as oil as a hedge against inflation. Also, a stronger dollar makes oil more expensive to investors overseas."
"Reports that Saudi Arabia has increased oil output by 500,000 barrels a day this quarter, 200,000 barrels a day more than previously thought, added some pressure to the market. Still, analysts said the Saudi move was only a peripheral factor in Tuesday's price drop"
More
http://biz.yahoo.com/ap/080610/oil_prices.html
"Oil prices surged to a record of $139.12 last week on the New York Mercantile Exchange. On Tuesday, oil futures traded near $131 a barrel on the Nymex"
More
biz.yahoo.com/ap/080610/oil_forecasts.html
