The simple answer is, "Yes," at least down to supply/demand levels of about $75/barrel, give or take $5.
The "How" is to reverse a major policy change made by the CFTC in 1991. At that time, the powers that be decided to allow banks the status of "hedger" in the crude oil market. A "hedger" is, at least in the usual sense, one who produces or uses crude. Using crude here would mean a refinery.
The banks persuaded someone in the G.H.W. Bush administration that since their clients might want to use the Over The Counter market, unregulated and opaque creature that it is, to buy or sell crude, that the banks should be allowed to finance those transactions, which they could do only if they, the banks, could hold positions in the transparent, regulated futures markets in excess of the normal 2,000 contract limit. And now they can.
As my earlier post shows, nearly half of all long positions are held by large hedge funds. Nearly three-fourths of those positions are held using the large bank's ability to circumvent contract limits in the futures market.
I trust it is now obvious how the white house can bring down crude prices: instruct the CFTC that it WILL, on pain of instant dismissal, reverse the foolish position that it took, or was coerced into taking (I have no idea what brought about the change) in 1991. Banks should be given five (5) days to unwind their positions down to the limit of 2,000 contracts that non-hedgers have. Should they not be in compliance, fines would commence a $1 million for the first day of non-compliance, and double each day thereafter, including week-ends. Less than one month of non-compliance would be needed to give the bank to the government.
Crude prices would drop sharply, quickly and without the politics of removing unneeded tax subsidies given to big oil.
The "How" is to reverse a major policy change made by the CFTC in 1991. At that time, the powers that be decided to allow banks the status of "hedger" in the crude oil market. A "hedger" is, at least in the usual sense, one who produces or uses crude. Using crude here would mean a refinery.
The banks persuaded someone in the G.H.W. Bush administration that since their clients might want to use the Over The Counter market, unregulated and opaque creature that it is, to buy or sell crude, that the banks should be allowed to finance those transactions, which they could do only if they, the banks, could hold positions in the transparent, regulated futures markets in excess of the normal 2,000 contract limit. And now they can.
As my earlier post shows, nearly half of all long positions are held by large hedge funds. Nearly three-fourths of those positions are held using the large bank's ability to circumvent contract limits in the futures market.
I trust it is now obvious how the white house can bring down crude prices: instruct the CFTC that it WILL, on pain of instant dismissal, reverse the foolish position that it took, or was coerced into taking (I have no idea what brought about the change) in 1991. Banks should be given five (5) days to unwind their positions down to the limit of 2,000 contracts that non-hedgers have. Should they not be in compliance, fines would commence a $1 million for the first day of non-compliance, and double each day thereafter, including week-ends. Less than one month of non-compliance would be needed to give the bank to the government.
Crude prices would drop sharply, quickly and without the politics of removing unneeded tax subsidies given to big oil.
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