First robnhood's link
<< Dubya ratings VS gasoline price
usatoday.com
>>
And then some unrelated news....
Just a coincidence I am sure! LOL....
courtesy siempre33 at the kitco refugee site
voy.com
Goldman's revision of commodity index caused plunge in gasoline prices -- siempre33 (), 00:16:32 09/24/06 Sun
From The King Report
By William J. King
Friday, September 22, 2006
mramseyking.com
In yesterday's Wall Street Journal, Section C, there is a very interesting item in the article headlined "Some Investors Lose Their Zest For Commodities." The article notes that over that past few months, commodity funds have been liquidating commodity holdings. But here's the stunner: "Consider the Goldman Sachs commodity index, one of the most popular vehicles for betting on raw materials. In July, Goldman Sachs tweaked the index's content by cutting its exposure to gasoline. Investors tracking the index had to adjust their portfolios accordingly -- which sent gasoline futures prices tumbling."
Prior to Goldman's revision of the Goldman Sachs Commodity Index in July, unleaded gas accounted for 8.45% (dollar weighting) of the GSCI.
chinese-school.netfirms.com.
Now unleaded gas is only 2.30%.
www2.goldmansachs.com
This means that commodity funds had to sell 73% of their gasoline futures to conform to the reformulated GSCI.
But it wasn't only commodity funds that were forced to sell. Goldman's decision to lower the weighting of unleaded gasoline in its commodity index and NOT to roll any portion of the GSCI attributable to New York Harbor unleaded gasoline created problems for arbitrageurs and commercial traders as well.
Here is the Goldman press release:
"On July 12, 2006 Goldman, Sachs & Co. announced that, for the roll occurring in September 2006 (the September Roll) in relation to the Goldman Sachs Commodity Index (GSCI) futures contract expiring in October 2006, it would roll the existing portion of the GSCI that is attributable to the Reformulated Gasoline Blendstock for Oxygen Blending (RB) futures contract on the New York Mercantile Exchange but would not roll any portion of the GSCI that is attributable to the New York Harbor Unleaded Gasoline contract (HU) contract into the RB contract."
www2.goldmansachs.com
Goldman's changes probably induced arbs, commercial hedgers, and other traders to sell September and October unleaded gasoline future contracts to avoid possible (settlement, delivery, etc.) problems.
September futures expired in August; October contracts expire September 29. So unleaded gasoline prices collapsed in August and September. |
