Germany Proposes Ban on Oil Speculation

[Blake Noble]

Germany in call for ban on oil speculation

Link: http://www.telegraph.co.uk/money/main.jhtm...26/cnoil126.xml

German leaders are to propose a worldwide ban on oil trading by speculators, blaming the latest spike in crude prices on manipulation by hedge funds.

It is the most drastic proposal to date amid escalating calls from Europe, the US and Asia for controls on market forces, underscoring the profound shift in the political climate since the credit crunch began. India has already suspended futures trading of five commodities.

Uwe Beckmeyer, transport chief for Germany's Social Democrats, said his party would call for joint measures by the G8 powers to prohibit leveraged trading on energy contracts. "It's an extreme step but it has to be done," he told the Berlin media.

Mr Beckmeyer said the last 25pc rise in the price of oil to $135 a barrel had nothing to do with underlying supply and demand. “It’s pure speculation,” he said.

George Soros: rocketing oil price is a bubble

Oil has doubled in price over the past year and the concerns are echoed on Washington’s Capitol Hill where irate Democrats want rules compelling traders to take delivery of crude oil, a move which would paralyse the market.

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There is now broad support in Germany for a clampdown on “locust” funds. President Horst Köhler said modern capitalism had turned into a “monster”, bringing the entire financial system to the brink of collapse this spring.

The Social Democrats form part of Chancellor Angela Merkel’s ruling coalition. Her own Christian Democrat Party shares concerns that funds are causing a fresh bubble in commodities, risking further havoc for the real economy and society.

In the long run, any scheme to ban futures trading would be extremely hard to enforce as the markets would tend to move offshore. Hedge funds are probably not the culprit in any case.

Speculators are split, with some betting that oil will fall. The mass of money coming into the commodity indexes is mostly from pension funds and long-term investors.

Oil markets are likely to shrug off the moves as political posturing, instead focusing on Norway’s suspension of crude output at three platforms, cutting supply by 138,000 barrels a day.

The news comes as Lloyd’s Marine Intelligence reported OPEC oil shipments fell by 1m barrels per day in the four weeks to May 4, confirming suspicions that the market has been chronically short of supply.

[Blake Noble]

Finally, someone steps up to the plate! This just makes me that much more proud knowing where my heritage lies.

Now, where are the U.S. lawmakers proposing a similar ban?

[Brougham-Holiday]

The US needs to get this same legislation now! Fuel prices are out of control!

[FAPTurbo]

Um... just what the world needs... more government intervention in the markets.

[Oracle of Delphi]

Um... just what the world needs... more government intervention in the markets.

Well you've seen where a Free Market Economy has gotten us. North American jobs being outsourced overseas. North American car makers on the ropes, world record oil profits, etc. I say it's about time government stepped in to even up the playing field.

Edited May 29, 2008 by Pontiac Custom-S

[CSpec]

Has anyone actually followed the news that precedes oil price jumps? Speculation is part of it to be sure, but institutional investors never actually take delivery of any physical oil.

[RJB]

The U.S. goverment needs to justify their existence is how I look at it. What have done lately for the average consumer in terms of helping out?! They've only killed the market even more by devaluing the dollar with their 'quick fix' interest rate cuts.

[vonVeezelsnider]

I heard a proposal like this on Bill O'Reilly's radio program a while back, he called oil speculators 'terrorists'.

[loki]

Well you've seen where a Free Market Economy has gotten us. North American jobs being outsourced overseas. North American car makers on the ropes, world record oil profits, etc. I say it's about time government stepped in to even up the playing field.

free market....? all the taxes, regulations...that's not a free market.

[Drew Dowdell]

I heard a proposal like this on Bill O'Reilly's radio program a while back, he called oil speculators 'terrorists'.

He'd call his own mother a terrorist if she bought a taco from a mexican.

[Drew Dowdell]

Do something to fix the value of the dollar. That's how this will get fixed.

If the dollar was on par with the Euro, oil would be $80 a barrel right now.

[FUTURE_OF_GM]

Well you've seen where a Free Market Economy has gotten us. North American jobs being outsourced overseas. North American car makers on the ropes, world record oil profits, etc. I say it's about time government stepped in to even up the playing field.

I agree.

Capitalism/Free Market is an excellent idea in theory but in reality it is devastating when it gets out of control.

[FUTURE_OF_GM]

Do something to fix the value of the dollar. That's how this will get fixed.

If the dollar was on par with the Euro, oil would be $80 a barrel right now.

I also agree with this though...

Ah, shades of gray....

[Lamar]

Um... just what the world needs... more government intervention in the markets.

You must ride a bike or something.

[ZL-1]

I heard a proposal like this on Bill O'Reilly's radio program a while back, he called oil speculators 'terrorists'.

Bill O'Reilly is an amusing fellow.

Speculators provide liquidity in markets. If there were no speculators, people/companies using the futures markets for hedging would have a lot more trouble finding a counterparty to their hedging positions.

Edited May 29, 2008 by ZL-1

[FAPTurbo]

You must ride a bike or something.

[Intrepidation]

As long as we are dependant on oil the chaos will never end.

[Sixty8panther]

As long as we are dependant on oil the chaos will never end.

Certainly true but the ever-logical Germans are 100% right!

This latest bull$#it IS all about hedge fund manipulation &

other political/economic forces.

I agree!

[Drew Dowdell]

Interesting, the feds announce they are opening an investigation into speculative oil trading in both domestic and foreign <London> markets to look for price manipulation and oil suddenly drops $4 a barrel.

Funny how that works.

[Sixty8panther]

I was just discussing that with Julie over lunch.

Shenanigans!

[Camino LS6]

As long as we are dependant on oil the chaos will never end.

The most important post in this thread.

It's time to end oil's control over our economy, by bringing forward competition for it in the marketplace as fast as humanly possible.

[daves87rs]

Well you've seen where a Free Market Economy has gotten us. North American jobs being outsourced overseas. North American car makers on the ropes, world record oil profits, etc. I say it's about time government stepped in to even up the playing field.

Agreed.

[daves87rs]

The most important post in this thread.

It's time to end oil's control over our economy, by bringing forward competition for it in the marketplace as fast as humanly possible.

Agreed.

Offer as much as possible....