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Pressure is on Commodity Futures Trading Commission to reduce speculation

GasBuddy Blog -- Last month U.S. Senator Dick Durbin of Illinois announced that many of his colleagues have come to the realization that oil futures speculation is intrinsically linked to rising gasoline prices. When he chaired a Senate Appropriations Subcommittee hearing(3/21)he cited a February report produced by Goldman, Sachs that said speculation alone accounts for 56 cents per gallon and may at times go higher. A Wall Street Journal analysis says 63 cents of every gallon is due to speculation.

Durbin questioned Gary Gensler, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), about the effects market speculators have on the price of gasoline. In his responses Gensler acknowledged that speculation does indeed impact retail gasoline...

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Submitted Apr 11, 2012 By: PD

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Marketjunkie Rookie Author Tacoma Posts:2 Points:140 Joined:Apr 2012	Message Posted: Apr 27, 2012 10:51:38 AM Ignore Marketjunkie Report Abuse One other point...In Commodities for every buyer there is a seller..It takes two traders to make a Contract..For every winner there is a LOOSER.. It's a ZERO SUM GAME Commodities are driven by SUPPLY and DEMAND! Gasoline is in demand by the rest of the world who are just now crawling out of the dark ages and stepping into the 21st Century.
Marketjunkie Rookie Author Tacoma Posts:2 Points:140 Joined:Apr 2012	Message Posted: Apr 27, 2012 10:36:42 AM Ignore Marketjunkie Report Abuse DEFINE SPECULATORS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ALLOW ME. Do you have a retirement account ? (Mutual Fund,401-K,ect,ect) Speculators are the people that invest in these markets (The same people who make the Stock Market go up) They consist of Hedgers (Commercial Producers) Large Speculators (Fund houses that handle YOUR Retirement Accounts) and Small Individual Speculators that barely make up 10% of the current Gasoline market and who are also statistically wrong in the markets. There are different groups of Commodities. (1) Grain Markets:....... Corn, Wheat, Soybeans and Rice to name a few. (2) Metal Markets: .......Gold, Silver, Copper, Aluminum, Nickle and Lead. (3) Livestock Markets: ...Live Cattle, Feeder Cattle, Lean Hogs. (4) Food & Fiber Markets: Sugar, Coffee, Cocoa, Orange Juice, Lumber and Cotton. (5) Energy Markets: .....Crude Oil, Heating Oil, Gasoline and Natural Gas. These are the most common commodities that everyone can relate to and there are many-many more that cover 'Interest Rates' and 'Currencies' and 'Index Futures' and blah-blah-blah the list goes on... 'Futures Contracts' Are essentially an insurance product, and that's WHY the industry was first developed, they're a way to offset risk on the part of both the people who need to use commodities (General Mills, Del Monty, Kellogg's ect.) and those who are producers of commodities. (Farmers, Growers ect.) with the help of speculators (you and me and investment firms). Very simply put a futures contract is a contract between a buyer and a seller for a specific commodity, for a specific price at a specific date of delivery in the future. The best way to look at this is for instance lets say Kellogg's Cereal Company knows that they are going to need a certain amount of Wheat in 6 months and right now the market is priced fairly low, however, the wheat supply looks like it will get tight and prices will likely go higher, Kellogg's can buy the wheat at today's price for delivery in 6 months. Now the Farmer on the other hand Hopes for higher prices so he can make more money from his crop and all his efforts, so as you can see both parties are exposed to risk and changing prices. This is where the Speculator comes into the picture. A speculator hopes to make a profit from taking on the RISK of the changes in price... He/She can make money by buying low (going 'LONG') and selling high and profiting from the points in-between 'or' (get this) selling high (going 'SHORT') and buying back a contract at a lower price and profiting from the points in-between....!?! Let me say that again another way... It doesn't matter which way price goes, the speculator/trader can make money either way up or down ! If you are 'LONG' a contract you are betting price will rise... If you are 'SHORT" a contract you are betting price will fall... If you are correct you will make money either way... "THE BIG CATCH" If you are 'LONG' and the market goes down or against your position you will -LOSE- money... and the opposite is true... If you are 'SHORT' and the price goes up against your position you will -LOSE- money. To sit back in your arm chair and claim that it's the speculators that are jacking prices is flat out ignorant! If it weren't for these RISK TAKERS The price of these commodities would easily be DOUBLE what they are today. The real issue in the USA is the F'ing EPA has put the kabosh to building any new Refineries in over 20 years... In the mean time we have been inclined to drive smaller more economical cars which has created a SURPLUS of Gasoline in this country ! Right now the USA is awash in gasoline!! So much so that since 2007 America has reduced it's consumption of Gasoline 10% and Gasoline has become one of this country's biggest EXPORTS... Look up the story written on 12/05/2011 about Gasoline exports by "Money CNN (dot com) ((I don't think I can post links here))When the EIA (Energy information Administration) releases it's Gasoline stocks every Wednesday at 9:30 Central time, These reports don't take into consideration that they are selling the supply off shore ! When our supply levels are below expectation it's looked at as a SHORTAGE. If you want to make a REAL DIFFERENCE get on your congressman's ass about taxing the hell out of exporting the fuel that would normally be used in this country AND restraining the reckless power the EPA has on choking the rest of us ! As it stands right now Gasoline is priced 17% higher over Crude Oil than it was at the peak of Crude oil in 2008 and this is why. Last but not least... Learn a little bit about trading Commodities.. It is the most American thing you by taking on the RISK from the producers of the materials YOU need in your daily lives and it's totally legal! "FOR INSTANCE" Gas prices got your panties in a bunch ?? The June 2012 Gasoline contract peaked at $3.36 per gallon Friday March 23rd...Yesterday it closed at $3.13 a gallon.. In that time it's gone DOWN 0.23 cents Per gallon... Had you "SHORTED" one contract you would have made $9660.00 on the trade while prices WENT DOWN !!! (is that so bad?) Do yourself a favor.. Look up KALEIDOSCOPE COMMODITY INVESTMENT TRAINING and tell them Ronnie sent ya... be sure to look at their live results page... 5 winning years in a row (I'm not a sales guy,but I am a very satisfied student)
heydano67 Champion Author California Posts:1,671 Points:358,510 Joined:Feb 2012	Message Posted: Apr 24, 2012 12:49:07 PM Ignore heydano67 Report Abuse I'd like to be saving $.63 a gallon about now.
Donatelo Champion Author Dayton Posts:1,121 Points:292,685 Joined:Apr 2011	Message Posted: Apr 23, 2012 3:28:57 PM Ignore Donatelo Report Abuse k
clpassenubye Champion Author Los Angeles Posts:3,359 Points:754,355 Joined:Mar 2011	Message Posted: Apr 23, 2012 1:16:40 PM Ignore clpassenubye Report Abuse Yes
gawxnative All-Star Author Atlanta Posts:510 Points:229,865 Joined:Aug 2006	Message Posted: Apr 22, 2012 5:12:20 AM Ignore gawxnative Report Abuse yeah, right
Donatelo Champion Author Dayton Posts:1,121 Points:292,685 Joined:Apr 2011	Message Posted: Apr 18, 2012 8:30:43 AM Ignore Donatelo Report Abuse ok
honda0105 Champion Author Tallahassee Posts:18,624 Points:1,609,520 Joined:Nov 2008	Message Posted: Apr 18, 2012 3:57:30 AM Ignore honda0105 Report Abuse too bad most of the specutraitors do their dirty business offshore where the US laws don't apply.
heydano67 Champion Author California Posts:1,671 Points:358,510 Joined:Feb 2012	Message Posted: Apr 17, 2012 3:04:45 PM Ignore heydano67 Report Abuse No Need, Just Greed!
albert2008 Champion Author Winnipeg Posts:7,352 Points:1,481,010 Joined:Sep 2008	Message Posted: Apr 17, 2012 7:02:36 AM Ignore albert2008 Report Abuse hurry up get her done
123cowboy Champion Author Maine Posts:1,833 Points:403,570 Joined:Mar 2011	Message Posted: Apr 17, 2012 5:25:37 AM Ignore 123cowboy Report Abuse Gary Gensler..... expressed little interest in taking any corrective actions or upsetting any apple carts. Wonder which company he was an exectutive for before becomming chairman? makes one wonder....
honda0105 Champion Author Tallahassee Posts:18,624 Points:1,609,520 Joined:Nov 2008	Message Posted: Apr 17, 2012 3:56:05 AM Ignore honda0105 Report Abuse clean: releasing SPRs is not helping prices. It already has been proven the last time it was tried.
cleangasprices Veteran Author Vancouver Posts:315 Points:72,515 Joined:May 2011	Message Posted: Apr 16, 2012 5:44:19 PM Ignore cleangasprices Report Abuse Still think it works better to use some reserves
cleangasprices Veteran Author Vancouver Posts:315 Points:72,515 Joined:May 2011	Message Posted: Apr 16, 2012 5:42:46 PM Ignore cleangasprices Report Abuse This was mentioned before but no conclusion so far
gawxnative All-Star Author Atlanta Posts:510 Points:229,865 Joined:Aug 2006	Message Posted: Apr 16, 2012 1:31:16 PM Ignore gawxnative Report Abuse Yeh whatever
Wildhare57 All-Star Author York Posts:802 Points:357,815 Joined:Apr 2011	Message Posted: Apr 16, 2012 10:30:19 AM Ignore Wildhare57 Report Abuse OMG you have got to be kidding me - really - REALLY???? And this idiot got voted into office how many times - he was elected to the U.S. Senate on November 5, 1996, and re-elected in 2002 and 2008 and is up for reelection this year and he is just figuring out that speculation has been responsible for the huge jumps in gas prices - oh give me a break... The following is from his website - if this is an example of what is leading this country we have no hope... Senator Dick Durbin, a Democrat from Springfield, is the 47th U.S. Senator from the State of Illinois, the state’s senior senator, and the convener of Illinois’ bipartisan congressional delegation. Durbin also serves as the Assistant Majority Leader, the second highest ranking position in the Senate. Also known as the Majority Whip, Senator Durbin has been elected to this leadership post by his Democratic colleagues every two years since 2006. In 2004, he was elected as Minority Whip. Durbin is only the fifth Illinois Senator in history to serve as a Senate leader.
Donatelo Champion Author Dayton Posts:1,121 Points:292,685 Joined:Apr 2011	Message Posted: Apr 16, 2012 9:54:19 AM Ignore Donatelo Report Abuse k
honda0105 Champion Author Tallahassee Posts:18,624 Points:1,609,520 Joined:Nov 2008	Message Posted: Apr 16, 2012 3:51:06 AM Ignore honda0105 Report Abuse can't limit offshore dealings w/ US laws.
dave27johnson Champion Author Chicago Posts:1,788 Points:409,045 Joined:Feb 2012	Message Posted: Apr 15, 2012 10:37:23 AM Ignore dave27johnson Report Abuse Use the tools the CFTC already has to limit speculation.
albert2008 Champion Author Winnipeg Posts:7,352 Points:1,481,010 Joined:Sep 2008	Message Posted: Apr 15, 2012 7:18:55 AM Ignore albert2008 Report Abuse get to work
honda0105 Champion Author Tallahassee Posts:18,624 Points:1,609,520 Joined:Nov 2008	Message Posted: Apr 15, 2012 5:45:31 AM Ignore honda0105 Report Abuse albert: doubt it CAN be done.
albert2008 Champion Author Winnipeg Posts:7,352 Points:1,481,010 Joined:Sep 2008	Message Posted: Apr 14, 2012 7:00:06 AM Ignore albert2008 Report Abuse get it done
honda0105 Champion Author Tallahassee Posts:18,624 Points:1,609,520 Joined:Nov 2008	Message Posted: Apr 14, 2012 6:39:12 AM Ignore honda0105 Report Abuse since the trading takes place mostly in off-shore locations, anyone can file for any hearings and pose new laws, but nothing has much effect as the arm of the US laws does not reach off-shore.
sparky808 Champion Author Honolulu Posts:3,003 Points:598,710 Joined:Sep 2011	Message Posted: Apr 13, 2012 11:15:44 AM Ignore sparky808 Report Abuse Thank you for posting.
roadrunnin Champion Author Richmond Posts:1,754 Points:565,135 Joined:May 2008	Message Posted: Apr 12, 2012 8:10:33 PM Ignore roadrunnin Report Abuse Once again the legislation has been passed, but is slow to be enforced.
TXryder Champion Author Texas Posts:2,711 Points:433,625 Joined:Jan 2012	Message Posted: Apr 12, 2012 3:25:46 PM Ignore TXryder Report Abuse TustinDad - Disagree with you. Congress is trying repeatedly to pass commodity regulations but your Koch backed tea party puppets in the House(remember those little green goof you voted for in retaliation of Obama's economic policy?)...they voted down the bill along with any other regulatory bill that would hinder the rich tyrants from destroying the middle class. Yea!!! Go republicanis!
TustinDad Champion Author Orange County Posts:4,281 Points:907,565 Joined:Feb 2008	Message Posted: Apr 12, 2012 12:14:14 PM Ignore TustinDad Report Abuse littlebigboy wrote: "So what has happened,nothing!!! Pres. says he can do nothing to effect gas prices," The President can do very little. Congress, however; but they won't touch it. They know where their money is coming from.
JagXKR Champion Author British Columbia Posts:3,159 Points:1,091,530 Joined:Dec 2009	Message Posted: Apr 12, 2012 12:09:46 PM Ignore JagXKR Report Abuse Get rid of speculation altogether or curtail it greatly.
Mr.Dirt Champion Author Albany Posts:8,366 Points:2,511,650 Joined:Mar 2004	Message Posted: Apr 12, 2012 12:09:26 PM Ignore Mr.Dirt Report Abuse took them how long to see it now will they do anything about it or will they all get paid off
ILoveGoldens All-Star Author Kentucky Posts:901 Points:378,880 Joined:Aug 2011	Message Posted: Apr 12, 2012 12:05:55 PM Ignore ILoveGoldens Report Abuse I thought the same thing, LuckyD43....
LuckyD43 Champion Author Long Island Posts:32,011 Points:2,168,070 Joined:Apr 2005	Message Posted: Apr 12, 2012 12:04:08 PM Ignore LuckyD43 Report Abuse Mr Gensler doesn't seem to be in a hurry to regulate the speculators, so I guess it's safe to assume that he is getting a nice big slice of the profits that the speculators are making.
kidneys4la Rookie Author Maine Posts:58 Points:12,720 Joined:Mar 2012	Message Posted: Apr 12, 2012 11:59:30 AM Ignore kidneys4la Report Abuse ok
RichFWA Champion Author Tacoma Posts:1,175 Points:289,845 Joined:Mar 2011	Message Posted: Apr 12, 2012 11:59:06 AM Ignore RichFWA Report Abuse get rid of speculation... problem solved.
schvanda63 Champion Author Lansing Posts:1,316 Points:264,615 Joined:Mar 2008	Message Posted: Apr 12, 2012 11:59:03 AM Ignore schvanda63 Report Abuse "They JUST realized this!? What the heck do we send these people to Washington to represent us for?!" See, the problem here is that the citizens of America DO believe that they send people to Washington to REPRESENT them. Nothing could be further from the truth. The so called reps in Washington are only there for their own agenda. They take "campaign contributions"(BRIBES),they take money from the hard working people of the US (taxes),and spend it on their home states pet projects(PORK),and run for re-election to do it all over again. The system is broke and it doesn't matter which party is involved. All they ever do is finger point,and then they get the American people involved in it too. Well it was the Dems or it was the Republicans that did this or that. THEY ALL DID IT TO US!! FIRE THEM ALL and start over.
Algernon Champion Author Greensboro Posts:3,190 Points:783,995 Joined:May 2004	Message Posted: Apr 12, 2012 11:58:23 AM Ignore Algernon Report Abuse Vote Obama out in 2012!!!!! That would improve the future!!
indrix All-Star Author Toronto Posts:582 Points:161,790 Joined:Sep 2011	Message Posted: Apr 12, 2012 11:57:56 AM Ignore indrix Report Abuse and you call this free market economy
ByGuy Champion Author Dallas Posts:7,848 Points:1,708,265 Joined:Nov 2005	Message Posted: Apr 12, 2012 11:57:18 AM Ignore ByGuy Report Abuse Must be the pressure BO Admin is putting on the Senate to help re-election.
pw1040 Sophomore Author Cleveland Posts:148 Points:601,560 Joined:Aug 2006	Message Posted: Apr 12, 2012 11:56:54 AM Ignore pw1040 Report Abuse Once again Democrat politicians find a parade to get out in front of. Where were they when Goldman Sachs was donating all that money to the Obama campaign in 2008?
dchiou Champion Author San Jose Posts:2,821 Points:792,990 Joined:Feb 2007	Message Posted: Apr 12, 2012 11:56:05 AM Ignore dchiou Report Abuse it's only pressure nothing more they can do
Teddy95 Champion Author Dayton Posts:41,150 Points:2,697,100 Joined:Oct 2005	Message Posted: Apr 12, 2012 11:55:09 AM Ignore Teddy95 Report Abuse Hummm...
Taurus1 Champion Author Ohio Posts:3,130 Points:1,674,475 Joined:Apr 2006	Message Posted: Apr 12, 2012 11:54:19 AM Ignore Taurus1 Report Abuse Why did it take the Senator so long to know this?
BIGREDNM Champion Author Albuquerque Posts:3,602 Points:847,735 Joined:Oct 2010	Message Posted: Apr 12, 2012 11:53:51 AM Ignore BIGREDNM Report Abuse Yeah, and I bet they're buying futures.
quattro02 Champion Author Twin Cities Posts:2,514 Points:192,185 Joined:Nov 2003	Message Posted: Apr 12, 2012 11:53:15 AM Ignore quattro02 Report Abuse Gary Gensler - letting the fox guard the hen house.
littlebigboy Veteran Author South Dakota Posts:392 Points:1,377,640 Joined:May 2007	Message Posted: Apr 12, 2012 11:52:11 AM Ignore littlebigboy Report Abuse So what has happened,nothing!!! Pres. says he can do nothing to effect gas prices, ANOTHER OBAMA LIE
littlebigboy Veteran Author South Dakota Posts:392 Points:1,377,640 Joined:May 2007	Message Posted: Apr 12, 2012 11:51:00 AM Ignore littlebigboy Report Abuse So what has happened,nothing!!! Pres. says he can do nothing to effect gas prices, ANOTHER OBAMA LIE
GreenAstro All-Star Author New Jersey Posts:561 Points:231,625 Joined:Aug 2008	Message Posted: Apr 12, 2012 11:46:46 AM Ignore GreenAstro Report Abuse A handful of outside groups, fueled by oil and coal dollars, are committing tens of millions to propel Big Oil to the forefront of the 2012 elections. In the first three-and-a-half months of 2012, groups including Americans for Prosperity, American Petroleum Institute, Crossroads GPS, and American Energy Alliance have spent $16,750,000 on energy attack ads. The total amounts to more than $56 million, including the American Clean Coal Coalition’s pledge of $40 million on ads promoting coal.
NECarter Veteran Author Seattle Posts:381 Points:250,945 Joined:Oct 2006	Message Posted: Apr 12, 2012 11:46:42 AM Ignore NECarter Report Abuse There is,'t a rational, honest, or logical reason that gasoline should be higher than $2.00 per gallon !!!!!
TustinDad Champion Author Orange County Posts:4,281 Points:907,565 Joined:Feb 2008	Message Posted: Apr 12, 2012 11:44:07 AM Ignore TustinDad Report Abuse kd5kpd wrote: "Speculation accounts for 50% of fuel prices not .56c a gallon" And the data to back this up is where?
DrCashFlow Champion Author Massachusetts Posts:7,064 Points:1,627,125 Joined:Jun 2008	Message Posted: Apr 12, 2012 11:43:00 AM Ignore DrCashFlow Report Abuse So what's the delay? oh, it's an election year.
ezone Champion Author Florida Posts:2,421 Points:947,110 Joined:Oct 2008	Message Posted: Apr 12, 2012 11:42:59 AM Ignore ezone Report Abuse Repeat from yesterday. Why are we now having these articles repeated on 2 or sometimes 3 successive days? Are there not other articles that could be posted?