It ain't all about peak oil...
3/29/2009 07:47:00 AM | Author: baloghblog

When oil prices spiked last summer to $147 a barrel, the biggest corporate casualty was oil pipeline giant Semgroup Holdings, a $14 billion (sales) private firm in Tulsa, Okla. It had racked up $2.4 billion in trading losses betting that oil prices would go down, including $290 million in accounts personally managed by then chief executive Thomas Kivisto. Its short positions amounted to the equivalent of 20% of the nation's crude oil inventories. With the credit crunch eliminating any hope of meeting a $500 million margin call, Semgroup filed for bankruptcy on July 22.

But now some of the people involved in cleaning up the financial mess are suggesting that Semgroup's collapse was more than just bad judgment and worse timing. There is evidence of a malevolent hand at work: oil price manipulation by traders orchestrating a short squeeze to push up the price of West Texas Intermediate crude to the point that it would generate fatal losses in Semgroup's accounts.


Meanwhile the futures markets had gotten wacky. On June 5, with no news catalysts, oil futures spiked $5 a barrel, the biggest one-day jump since the outbreak of the first Gulf war. The next day, on no news, the price jumped another $10 to $138. Traders say that in the days leading up to the $147 peak on July 12 there was the smell of blood in the water. "We just kept bidding the market higher," one trader says.

The level of "alleged" corruption by these "too big to fail" banks and Goldman Sachs (which seems to be a government sponsored enterprise) is staggering.  Even peak-oilers have to admit the price rise was not solely due to supply/demand issues. 

Story found and discussed here:
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On 9:20 AM , Kory said...

If these chumps claim they are too big to fail, then they are too big to exist, period.

All the more reason to decentralize our energy towards something we are all capable of producing.

On 3:15 PM , NYCO said...

And perhaps we should treat possible (auxiliary) future power sources a little better: