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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (128666)	6/12/2008 8:49:51 PM
From: ChanceIs	Read Replies (2) \| Respond to of 306849

Refinery premiums cast doubt on speculators >>>I also put this article up on the Boom Boom Room. See the highlights wherein the refiners are paying $5-$6 over market price for crude. Pretty much belies the notion that todays prices come from speculators. The Times article states that speculators are good in that they supply liquidity. Now what good is liquidity, Hmmmmm. Aren't the SIVs illiquid, and hence nobody knows what they are worth. Same is true for CDO squared - and just about every other piece or mortgage based crap out there. The electricity markets became illiquid post Enron. Talk to Bernanke and he will tell you how much trouble he is having keeping the financial markets liquid. Is there enough FED balance sheet left o lube up the crude markets if the liberal Dems - Liberman and Levin - get their way??? I think not. Keep your heads down and buy the VIX. Volatility and liquidity go hand in hand.<<< By Javier Blas in London Published: June 12 2008 18:44 \| Last updated: June 12 2008 18:44 Refiners are paying record premiums for the high-quality crude oil they use to produce diesel and petrol, a sign of strong demand in the physical oil market that calls into question claims that soaring oil prices are being driven by speculators. Refiners are paying up to $5-$6 a barrel on top of current record prices to secure high-grade oil, traders said, double the level of a year ago. The mark-ups are four times higher than the 2000-2008 average. The movement in prices paid for physical barrels of oil has gone largely undetected outside the refinery industry because financial markets pay almost exclusive attention to the price of oil futures traded in London and New York. The fact that refiners are willing to pay a higher price for physical supplies than the futures benchmark lends weight to the argument that speculators are not the cause of record oil prices. At the same time, though, refiners are obtaining unusually large discounts for low-quality crude oil, traditionally refined into fuel oil. Traders said supplies of low-grade oil, typically produced in the Middle East, are relatively plentiful. The premium for Nigeria’s high-grade Bonny Light oil has surged this month to $4 a barrel, up from $2.50 a year ago. In the same period, the discount for low-grade Iran Heavy oil has widened to $13.05 a barrel from $7. The split in the physical market explains Opec’s reluctance to boost its production as most of the cartel’s spare capacity is of low-quality oil. However, the situation could change as Saudi Arabia plans to bring on stream its Khursaniyah high-quality oil field. It also highlights a lack of capacity at refineries that can turn heavy, low-quality oil into products such as diesel. Francisco Blanch, head of commodities research at Merrill Lynch, said the price of Middle East low-grade oil was falling behind because of refining bottlenecks. “Middle East heavy crudes have been unable to keep up with the growing appetite for low sulphur middle distillates products, such as diesel,” he said, adding the difference between Saudi Arabia’s high- and low-quality oil was at a record high. The scarcity of premium oil has been aggravated by shortfalls in Nigeria.

To: bentway who wrote (128666)	6/14/2008 1:23:29 AM
From: marcher	Read Replies (1) \| Respond to of 306849

"...ban large institutional investors from the commodity markets entirely..." since gs and jpm were recently fingered as significant speculators, why are they not named here? gee, i wonder why lieberman doesn't simply suggest the fed turn off the cheap money to ib ? this is all just smoke and mirrors. -ng-

To: bentway who wrote (128666)	6/14/2008 5:44:21 AM
From: James Hutton	Read Replies (1) \| Respond to of 306849

The rhetoric out of Beijing (let's forbid selling stock) and Washington (let's prevent "institutions" from buying commodities) is strikingly similar for two forms of government that are supposedly polar opposites.

To: bentway who wrote (128666)	6/14/2008 7:52:01 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

This is ridiculous. We all know that the source of all "evil" in commodities trading is homemade, made in the U.S.A. as evidenced by the utter lack of fiscal discipline, inept monetary policy, huge account deficits and the henceforth, sagging US dollar. (Add to that the destruction of U.S. manufacturing, others say.) The best cure was to restore confidence in its own currency, the end of all lying (particular with sensible information like GDP, inflation, public sentiment where everyone accepts that those are faked). As long as this does not take place the trade will be one sided with producers and speculators on the same side. There´s no thing like to stop a trade which simply balances demands of participants. What does it take until those responsible will apply a tidy amount of self criticism and some "Katharsis"?? A new war? A downgrade of US debt? 10 Million foreclosures a year?