# Obama calls for closing the "Enron loophole"

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I'm not sure I understand where exactly you guys disagree.

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I'm not sure I understand where exactly you guys disagree.

Bascule appears to believe that oil traders are working in collusion to deliberately withhold supplies of oil and drive prices up.

I have pointed out why i consider that to be such a nonsensical idea as to be almost insane.

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I see, thank you.

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Bascule appears to believe that oil traders are working in collusion to deliberately withhold supplies of oil and drive prices up.

I have pointed out why i consider that to be such a nonsensical idea as to be almost insane.

You can't truly be serious? They've been doing exactly that for years.

http://www.newsweek.com/id/119895/output/print

Look no further than last week's OPEC meeting in Vienna. Oil ministers declined to increase production despite a fairly obvious case for doing so. Not only were oil prices fluttering just above $100 a barrel, but the United States is either in or near a reces*sion and much of the rest of the world faces a noticeable econom*ic slowdown. The OPEC ministers were unmoved. Indeed, they indicated that they might actually reduce production if weak de*mand-presumably reflecting weak economies-threatens to de*press prices. Not good. Go back to late 2006. Crude prices were slipping from about$70 a barrel in August toward $50 a barrel (a level that, a few years earlier, seemed astronomi*cal). A true cartel would cut production to prop up prices. That's what OPEC did. In two steps, it reduced oil output by about 800,000 barrels a day, notes economist Larry Goldstein of EPRINC. "By July, 125 million barrels of oil inventory had been wiped out," he says. At the end of 2007, inventories (measured by days of supply) were at their lowest point in three years. Prices rose. Without OPEC's supply cuts, they wouldn't now be at$100 a barrel.

More have spare capacity; more are tempted to increase production to raise revenues. Controlling supply today is easier because most producers are operating near their potential. The surplus is concentrated in a few countries, especially Saudi Ara*bia, which can adjust production to influence prices.

That's just one quick source, there are scores of others, including the fact that the US Congress sought to sue OPEC for EXACTLY that.

Washington overcame a significant obstacle yesterday in its attempt to sue Opec for behaving as an oil cartel and keeping the price of fuel artificially high.

The House of Representatives overwhelmingly approved legislation to bring a lawsuit against Opec members because they have collectively set the price of oil and limited oil supplies.

Oil ministries from each of the oil- producing countries meet regularly to discuss global demand and whether to boost supply to control the oil price. Recently, Opec has refused to increase production even though the oil price has hit a record level.

http://www.govtrack.us/congress/bill.xpd?bill=h110-6074

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iNow. You do understand that OPEC and market traders (speculators) are completely different groups don't you?

OPEC attempting to limit oil supplies has absolutely nothing whatsoever with oil traders or any putative 'Enron loophole'.

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I see where we got our signals crossed. It was not an intentional miscommunication, I promise.

Are you suggesting, then, that market traders would have no interest in driving up costs, and that a limit on supply is not an effective way to do that?

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Are you suggesting, then, that market traders would have no interest in driving up costs, and that a limit on supply is not an effective way to do that?

At anyone time, half of all oil traders would like to see oil prices rise and half would like to see them fall. Whichever way the traders would like to see the oil price go, they don't have the option of limiting supply. OPEC could conceiveably do that, but not uncountable numbers of traders dispersed all over the world.

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Okay. It sounds like we share a pretty close understanding of the topic then. Thanks for taking the time help get us on the same page.

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Always good to find some common ground in one of these discussions.

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Bascule appears to believe that oil traders are working in collusion to deliberately withhold supplies of oil and drive prices up.

That's a terrible strawman. Can you please go back and reread my posts while employing a higher degree of reading comprehension, rather than making up fantasy viewpoints in your head then attributing them to me? Thanks.

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Well, I'm about done arguing with Aardvark as he only seems to want to deal in strawmen and not arguments of substance. And I'm not sure how to argue about the U.S. oil futures market with someone who thinks it doesn't exist...

It's a shame that you apparently don't even understand your own argument, let alone anyone elses.

Aardvark insists that speculators can only manipulate the markets through a CONSPIRACY!!! I insist this isn't the case:.

Wrong.

You are the one who uses a quote from Greenberger calling for regulation because of a conspiracy. I have pointed out that no such conspiracy does or can exist.

But even after trying to make myself clear, this isn't a conspiracy, it's a collective effect, Aardvark once again goes for CONSPIRACY, strawmanning me in the process.

Wrong again, it's odd how you don't appear to even read your own posts.

You claim that all the oil traders are collectively working together to deliberately withhold oil supplies to drive up the price.

That is a good definition of a conspiracy. And also practically and financially impossible.

First, I said nothing about supplies. And here's someone who agrees with me that the collective effect of speculation is driving up the price of oil in the U.S.:

You did refer to oil supplies, that's is what this entire thread is about:rolleyes:

And it's easy enough to find random quotes from people, that doesn't count as proof or data. Each of us could post hundreds of quotes from people who think that regulating speculation in the USA will reduce prices or who think that is a stupid and ineffective idea. It doesn't prove a thing.

I note that you haven't bothered to try and counter my points that it is impossible for American to regulate the oil trading markets, that the only way for America to affect the oil price is to consume less or produce more or that it is physically impossible for all the oil traders on the planet to collectively act (conspire) to deliberately withhold oil supplies to boost prices.

Still, never mind, it's pretty clear that you have no understanding at all of the way markets work.

Then why did it take so many decades to arrive at (or near) \$150/barrel? They could have "paid themselves" more than the market rate all along.

The only amount that makes sense for a company to pay itself is the exact market rate. If they pay themselves more, then all they are doing is taking money out of one of their pockets and putting it into another pocket. It doesn't make them any extra profit, why would they want to do that?

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Aardvark, chill out. There is no reason for you to be so insulting, and it is not conducive to good discussion. If you keep posting like that you're going to start eating infraction points and seeing your posts removed again.

Knock it off.

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