"While researching my third article for BusinessWeek online about the world’s oil situation in 2008, I asked for the most current report from Oil Movements. Because the oil industry is not transparent, Oil Movements tracks every tanker at sea, from both OPEC and non-OPEC oil countries, along with their cargoes’ final destinations. Anne O’Shea responded immediately to my request with their report dated May 8, 2008."
Mr. Wallace says that all classes of oil shipments, except one, have gone up since a year ago, including Middle East oil in transit and Non-OPEC oil in Transit."
Which class has gone down? The 4-Week Changes in Westbound Oil at Sea.
Mr. Wallace points out that "shipments of oil headed west have shown serious declines during the month of April, down 800,000 barrels per day in the week before the publication of the report." He goes on to give us the first line from under the Westbound Oil shipments chart: "In the west, a big share of any [oil] stock building done this year has happened offshore, out of sight."
Clearly impressed himself, he goes on,
"Oil Movements, the unimpeachable source for finding the real world situation on oil transits, is saying that oil is being hidden offshore, not declared in inventories? Yes, that is exactly what they are saying.
"That same week our refineries cut their production runs back to 85 percent, down from 89 percent a year ago, to trim more gasoline out of our stock reserves, to increase their profits per gallon."
What is going on? Hiding oil to drive up the price? To get tax breaks despite mammoth profits? To get Congress to open up ANWAR and the off-shore drilling?
Who ever heard of such a thing?
Well ... we have.
Mr. Wallace sure does: "Enron ... manipulat[ed] the California energy market, even forcing rolling blackouts across the northern part of their state apparently just for effect – to support their claim that there just wasn’t enough electricity to go around. Again, we now know that claim was untrue. It was Enron shutting down certain power generation plants, while placing bets on their unregulated energy futures market. The net cost to California consumers was almost $8 billion."
What did we do about it?
There were Congressional hearings in 2001, during which included "blasting certain Wall Street executives for using the media to sell the public on stocks in order to bid up the price – so their firm could divest of its shares without taking a beating. Meanwhile, other trusted advisors pushed stocks that were fundamentally worthless, because their affiliated banks had large loan agreements with those companies."
We know that is called cheating. Also, stealing.
We know that was stealing from us.
We know that kind of manipulation of fuel/energy only happened once in this country.
We do? What about Amaranth Advisors, a hedge fund?
We don't know about that.
Wallace - fast becoming my favorite guy, does. He said Amaranth Advisors were "literally ... cornering the market on natural gas futures, to make it appear that there was a shortage of natural gas, when the Commodities Futures Trading Commission told Amaranth to liquidate its position on the NYMEX because its bidding had already moved natural gas prices far beyond the reasonable limits of supply and demand."
Because once Amaranth had to stop doing what it was doing with natural gas futures contracts, they went out and found a new cookie jar. It got out of NYMEX and government regulations by placing its "bets" in ICE - ICE, short for Intercontinental Exchange –and what Wallace calls the "dark futures lookalike market." Using ICE, Amaranth drove the nature gas futures up to $850 per MBtu.
I don't know what a MBtu is, but "[a]s the Senate investigation into the manipulation of the energy markets showed, "Amaranth – the day before they failed, natural gas was about $8.50; the day after it failed, it went to $4.46 MBtu." That's dropping by half. Amaranth had done things that doubled prices.
"That’s right, one major hedge fund managed to double the price of natural gas simply by loading up on futures contracts; when the government told them their bets were unwarranted, they simply moved their monies to a futures exchange that was unregulated."
Well, all you people who followed Reagan like ducklings and voted for "de-regulation," thanks a lot.
We know - now - it's called "disaster for consumers."
Mr. Wallace, a great guy if ever there was one, says: "Sadly, like oil today, when this was happening we were being told that natural gas supplies were tight worldwide. That statement simply wasn’t true." [My emphasis.]
We know we have seen "untrue" before.
We know we have an oilman in the White House who has proved to have very few limits on what he will say.
We know he has oil friends.
We know they are probably worried about having to leave the great oil party he has thrown while in office.
We know they are raking it right now, and using the "crisis" to take everything they can get their hands on in this country, except the wallpaper.
We know if they aren't stopped, our society and our economy will be crashing to pieces behind them as they walk away with the booty.
We know oil is hidden offshore and refineries have cut back production.
We know this is driving gas up, terrifying the country, destabilizing economy, setting up a crisis so the oil companies can push for tax breaks and drilling anywhere they fantasize, and for dirty energy industries to descend like reawakened Visigoths.
Do we know whether the White House is involved? If so, is this the 36th article?
I don't know what you know, but I know Ed Wallace is my hero..