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Is the FED buying oil??

southfork

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#1
No reason what so ever for oil to be rebounding from the 40s like it is, other than the fed is buying to prevent collateral debt swaps from kicking in and companies going belly up from 40s oil when they need 60s to just survive, any thoughts?
 

EO 11110

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#2
the fed or one of its many agents

nyc.dc didn't set up a cartel for nothing

true scarcity doesnt need a cartel

bucking the cartel is what got saddam killed imo
 

SilverBuyer

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#3
Why wouldn't it rebound some from such a large drop? Only natural to get at least a small rebound after such a fast and massive decline.

If the fed has to buy just to keep the price over $50, how the heck did the price stay over $80 so long?
 

southfork

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#4
Why wouldn't it rebound some from such a large drop? Only natural to get at least a small rebound after such a fast and massive decline.

If the fed has to buy just to keep the price over $50, how the heck did the price stay over $80 so long?
The supply glut caused by increased drilling and lower economic activity took time to build, the collapse from 100 to 49 took around 5/6 months, the price has rebounded 20%+ with continuing build in inventory and production.
 

nickndfl

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#5
I was thinking the same thing. They are stabilizing the market. Also watch the yen. Notice how it hasn't moved much since last year when it fell about 15% in the last quarter.

The Japanese Prime Minister is going to DC to visit Obama on April 28th to finalize a trade deal that has been in the making for at least 10 years. The USA can supply Japan with oil and gas and rice as long as we agree to cut tariffs on Japanese auto parts. Markets aren't just random.
 

Argentsum

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#6
I hope the Fed is a buyer. We should have a twenty year strategic reserve of oil. It's that important.


***

Okay, that got me thinking. EIA states the U.S. consumed 6.95 Billion barrels of oil in 2014.

Assuming a growth in rate of consumption of 3% yearly by 2035 the U.S. should be burning through
12.93 billion barrels of oil each year.

Somewhere around 8 CMOs should be good for a twenty year supply.

Basically take Lake Powell over in Arizona, dump all the water and fill it to "Full Pond" with Crude and we'd be good to go.
 
Last edited:

Ahillock

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#7
I hope the Fed is a buyer. We should have a twenty year strategic reserve of oil. It's that important.
Why do we need a twenty year strategic reserve of oil when we can just go in and bomb the countries that have oil and then take it?
 

Argentsum

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#8
Why do we need a twenty year strategic reserve of oil when we can just go in and bomb the countries that have oil and then take it?
Given the costs associated with a major war it actually might be cheaper to just buy and stockpile when the price is low.

Today a barrel of oil goes for $57. A single B-2 bomber represents over 35 million barrels of oil. More if you factor in maintenance, and personnel.

Study: Iraq, Afghan war costs to top $4 trillion. The U.S. wars in Afghanistan and Iraq will cost taxpayers $4 trillion to $6 trillion, taking into account the medical care of wounded veterans and expensive repairs to a force depleted by more than a decade of fighting, according to a new study by a Harvard researcher.Mar 28, 2013
 

Ahillock

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#10
Given the costs associated with a major war it actually might be cheaper to just buy and stockpile when the price is low.

Today a barrel of oil goes for $57. A single B-2 bomber represents over 35 million barrels of oil. More if you factor in maintenance, and personnel.

Study: Iraq, Afghan war costs to top $4 trillion. The U.S. wars in Afghanistan and Iraq will cost taxpayers $4 trillion to $6 trillion, taking into account the medical care of wounded veterans and expensive repairs to a force depleted by more than a decade of fighting, according to a new study by a Harvard researcher.Mar 28, 2013
$4 trillion? That's nothing when you have QE.
 

Argentsum

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#12
$4 trillion? That's nothing when you have QE.
Hmmm...we can certainly play global games given our reserve currency status but I think it would be useful to stockpile oil.

Oil, like gold is a strategic asset and having a stockpile improves our currency status.

I'm not even certain why we need bombers (or air craft carriers) as they are used to project force. If we are a peace loving nation
then armed forces should be centered around a paradigm of national DEFENSE.

Ensuring our national energy requirements through stockpiling would go a long way to alleviating the need to expend resources on
force projection.
 

EO 11110

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#13
i seem to recall them filling the salt domes during the parabolic run in 2007 -- further pushing prices up

they manipulate the sh-t out of oil supply and prices
 

BarnacleBob

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#14
It is NOT the oil itself per se, its the use of oil as collateral for credit & trade transactions that really matters. The rest is just noise to keep you off the trail!

Indeed it seems the financial actors are manipulating the market, as the sudden collapse of POO caused no pain in the markets, which it should have...same can said for the instantaeous parabolic rise in SWF....that in itself should have created tremendous losses for a number of producers & forex spec players... yet all is quiet on the western front....until its not!

Whats really happening in the oil markets is & will remain unknown...we will NEVER learn the facts, much less the truth...
 

Fjpod

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#17
Oil seems cheap right now. You can buy it for less than it would cost to mine it. .... Sound familiar?

I see nothing wrong with stocking up a national reserve. At these prices, I see nothing wrong with using up other people's oil while we keep ours in the ground.
 

southfork

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#21
Seems every time oil tries to go below 45 it gets bumped, no reason for recent upward bias, my thoughts are below this price lots of drillers go belly up, so much for the free markets.
 

HistoryStudent

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#22
Perhaps they are moving the petro-dollar via derivatives to make things go up and down.

Surely that's what is done in this day and age when one has the power to manipulate - for good or bad.
 

Usury

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#23
So assuming by FED you mean Federal Reserve Bank, how exactly would they "buy" oil? I really can't see them taking physical delivery, and is there any other way for them to really manipulate the pricing? I looked into a way to "buy" oil at the lows also and there's no way to do it!
 

southfork

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#24
So assuming by FED you mean Federal Reserve Bank, how exactly would they "buy" oil? I really can't see them taking physical delivery, and is there any other way for them to really manipulate the pricing? I looked into a way to "buy" oil at the lows also and there's no way to do it!

Buying the way paper gold and silver is sold, strictly a paper play to prop the prices
 

Usury

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#25
But if they buy a futures contract, then they either have to take delivery or default (which aren't options) or sell the contract--which seems like it would counteract the entire point. Again....am I missing something?
 

southfork

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#26
But if they buy a futures contract, then they either have to take delivery or default (which aren't options) or sell the contract--which seems like it would counteract the entire point. Again....am I missing something?
Most comex contracts for gold and silver are settled in cash, why not oil?
 

Nickelless

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#27
I know Obama and the Dems and big-government Repubicans and environmentalist wackos would never allow this, nor would the terrorism sponsors that currently comprise OPEC, but given the oil and gas reserves we have here, what would happen if the U.S. were to try to join OPEC or start its own such organization?
 

blueice

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#28
Fork, the FRB is not purchasing goo, but has acquired nearly
$1.8 trillion in mortgage back securities.
 

southfork

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#29
Truth be told ice we don't know what they are doing, what reasoning is there to trust the Fed or their bankers, they lent over 15t without anyones knowledge to world banks, should low prices continue it will trigger massive debt defaults and kick in Ts in CDS, I don't put anything past them. By the way there goes my 2.00 gas again.

http://www.zerohedge.com/news/2015-10-05/us-shale-oil-industry-will-simply-vanish

Fork, the FRB is not purchasing goo, but has acquired nearly
$1.8 trillion in mortgage back securities.
 

southfork

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#30
No doubt the fed came in at 26 oil, no reason for oil to go up 5 bucks on worst storage data to date.
 

nickndfl

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#31
The FED came in on by way of large banks. Our economy is more managed than what they say. Then there is the financial engineering with bond supply, interest rates and numbers reporting. Banks can go on indefinitely since the FED will provide an infinite supply of $ for an infinite amount of time.

There is some sort of unwinding or sector rotation going on now. Housing has stabilized and is actually inflating. It costs 20% more now to build a new house than it did 10 years ago and that's with the same Mexicans. Oil is being managed down to inflate purchasing power instead of the opposite as a pseudo tax. Food prices are up hookers are about the same and blow I don't know.
 

SilverBuyer

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#32
I seriously doubt the Fed has been buying oil. If they have they are doing a terrible job of propping up the price. Nothing goes in a straight line down forever, considering how many bad days in a row oil had, its no surprise if finally has a small bounce.

My oil chart only has oil getting down to about $28 a barrel at the low and is now up to $32
 

Ahillock

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#34
We know the Fed/Exchange Stabilization Fund, is buying US Treasuries, stocks...etc. So why wouldn't they be involved in every aspect of the market as they do everything they can to prop it up?