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Could these guys be responsible for the rise in cost of gas?
http://thinkprogress.org/report/koch-oil-speculation/How Koch Became An Oil Speculation Powerhouse
From Inventing Oil Derivatives To Deregulating The Market
n April, ThinkProgress caused a stir when we uncovered a series of Koch Industries corporate documents revealing the company’s role as an oil speculator. Like many oil companies, Koch uses legitimate hedging products to create price stability. However, the documents reveal that Koch is also participating in the unregulated derivatives markets as a financial player, buying and selling speculative products that are increasingly contributing to the skyrocketing price of oil. Excessive energy speculation today is at its highest levels ever, and even Goldman Sachs now admits that at least $27 of the price of crude oil is a result from reckless speculation rather than market fundamentals of supply and demand. Many experts interviewed by ThinkProgress argue that the figure is far higher, and out of control speculation has doubled the current price of crude oil.
The article is from last year.
6 replies
= new reply since forum marked as read
= new reply since forum marked as read
Geneva: the world oil trading capital
http://www.nowpublic.com/tech-biz/geneva-world-oil-trading-capital
Oil trading. No city in the world is home to as many traders as Geneva. They are secretive, immensely rich and well-connected. A glimpse into the nerve centre of a global business also shows why the oil bubble burst.
This is the story of a handful of men who moved to Lake Geneva in the 90s to make billions, achieved their goal in a decade and still walk about the city unrecognized. It is also the story of the city that helped them rake in the money, and became richer in the process. Torbjörn Törnqvist, Gennady Timchenko, Daniel Jaeggi, Marco Dunand or Daniel Fransen – their names are familiar only to insiders, and their companies are unknown to customers at the gas station. Totsa, Vitol, Gunvor, Litasco, Addax or Mercuria: those are Geneva’s independent oil-trading giants, who operate beyond the realm of the majors Exxon, Shell, BP and Total.
Take Törnqvist, for example. Wikipedia, the internet encyclopaedia, knows nothing about the Swede who learnt his craft with BP. Nor will Google tell you more. Törnqvist started his business more than ten years ago with mailbox companies in the British Virgin Isles, Cyprus and the Netherlands, founded together with his Russian partner Timchenko. In 2003, the companies started operations in Geneva, under the name Gunvor, at the address of a law firm. Today, Gunvor’s traders occupy five floors of an office building at N° 14, Quai du Général Guisan, a lakeside promenade. Women in jeans and neat shirts and men with red braces or accountant’s suits sit on white leather chairs in spacious offices. Ceiling lamps bathe the rooms in soft light. Two monitors on the white trading desks supply employees with current market prices. Floor to ceiling windows offer an uninhibited view of the lake, the Jet d’eau fountain and the Mont-Blanc range on the horizon.
Here, simple emails direct whole fleets of oil tankers across the seas. A typical deal may run like this: under the reference “Gunvor contract – approx 75,000 mt”, a trader communicates information about a 75,000 metric ton delivery that was discussed on the phone the day before. Gunvor, the seller, is delivering Russian fuel oil to a buyer in Singapore. Interposed is a broker in France who brought the parties together. A Persian oil tanker is to take the shipment on board in Estonia and unload it within 18 days in the Indonesian port of Karimun Island. There, an inspector from SGS, the Geneva inspection company, will measure the density, viscosity and water and sulphur contents of the goods. The price is set on the date of unloading based on the Asia-Pacific Arab Gulf Marketscan rates, plus a premium of ten dollars per metric ton. As usual, payment is due forthwith by telegraphic transfer to one of Gunvor’s accounts.
snip
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Also look into Glencore (Marc Rich) and Trafigura (spun off from Glencore in 1993).
Most of these 8 firms were knee-deep in the Iraq UN Oil-for-Food Programme Scandal. Vitol was the company to organise the first, controversial, sale of Libyan rebel oil to Tesoro in early April 2011.
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The Rich Boys: An ultra-secretive network rules independent oil trading. Its mentor: Marc Rich
http://www.businessweek.com/magazine/content/05_29/b3943080.htm
One brisk day last fall, globe-trotting oil executive Benjamin R. Pollner was leaving his luxury prewar apartment building on Manhattan's Park Avenue when detectives from Manhattan District Attorney Robert M. Morgenthau's office approached. They began asking him about his alleged involvement in the unfolding U.N. Oil-for-Food scandal. Pollner, a tall, lean sixtysomething who wears European-cut clothes and a world-weary visage, was taken aback, say investigators familiar with the incident.
He snapped that he was in a hurry to make an overseas flight and refused to answer questions. Before hopping into a car that whisked him off to John F. Kennedy International airport, Morgenthau's investigators say Pollner delivered a parting shot: "I did nothing in New York or the U.S. that would be considered illegal." To them, Pollner was admitting he had done something wrong -- just not in their jurisdiction. Pollner, who runs Taurus Petroleum mainly from offices in Geneva and London, hasn't set foot in the U.S. since, investigators believe. He didn't reply to several calls and e-mails.
On the morning of Apr. 14, David Bay Chalmers Jr., 51, who owns privately held oil-trading company Bayoil U.S.A. Inc., emerged handcuffed and bleary-eyed from his high-security mansion in Houston's ritzy River Oaks neighborhood. He had just been indicted by the U.S. Attorney for the Southern District of New York for conspiracy, wire fraud, and trading with a country that supports terrorism -- Iraq -- during the U.N. program. Chalmers has pleaded not guilty. Another trader, Patrick Maugein, nonexecutive chairman of London's SOCO International PLC oil-trading company, has been under scrutiny by the U.N. for his alleged role in a complex oil-smuggling scheme during Oil-for-Food, the U.N. program that allowed Iraq to sell oil for humanitarian purposes during a period of strict sanctions. Although many deals were legitimate, Saddam Hussein at times demanded illegal surcharges for the right to buy oil at below-market prices. Friends of Saddam's regime allegedly received sweetheart oil allocations, investigators say. Maugein denies violating sanctions or paying illegal surcharges.
LEARNING FROM EL MATADOR
What do the three men have in common, aside from their dubious deals with Iraq? They all belong to the ultrasecretive informal network of traders who dominate global independent oil trading. They don't necessarily act in concert with each other, but they often chase the same opportunities. They are the Rich Boys. All operate in the world of onetime fugitive billionaire Marc Rich, the most-wanted white-collar criminal in U.S. history until his controversial pardon on President Bill Clinton's last day in office in 2001.
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A Few Speculators Dominate Vast Market for Oil Trading
http://www.sanders.senate.gov/newsroom/news/?id=a6aa9b84-140e-4df6-8198-10fe460c7dfb
Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses. But when the Commodity Futures Trading Commission examined Vitol's books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol's portfolio -- at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.
The discovery revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators. Other CFTC data showed that a significant amount of trading activity was concentrated in the hands of just a few speculators. The CFTC, which learned about the nature of Vitol's activities only after making an unusual request for data from the firm, now reports that financial firms speculating for their clients or for themselves account for about 81 percent of the oil contracts on NYMEX, a far bigger share than had previously been stated by the agency. That figure may rise in coming weeks as the CFTC checks the status of other big traders.
Some lawmakers have blamed these firms for the volatility of oil prices, including the tremendous run-up that peaked earlier in the summer. "It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency's laughable assertion that excessive speculation has not contributed to rising energy prices," said Rep. John D. Dingell (D-Mich.). He added that it was "difficult to comprehend how the CFTC would allow a trader" to acquire such a large oil inventory "and not scrutinize this position any sooner." The CFTC, which refrains from naming specific traders in its reports, did not publicly identify Vitol. The agency's report showed only the size of the holdings of an unnamed trader. Vitol's identity as that trader was confirmed by two industry sources with direct knowledge of the matter.
CFTC documents show Vitol was one of the most active traders of oil on NYMEX as prices reached record levels. By June 6, for instance, Vitol had acquired a huge holding in oil contracts, betting prices would rise. The contracts were equal to 57.7 million barrels of oil -- about three times the amount the United States consumes daily. That day, the price of oil spiked $11 to settle at $138.54. Oil prices eventually peaked at $147.27 a barrel on July 11 before falling back to settle at $114.98 yesterday. The documents do not say how much Vitol put down to acquire this position, but under NYMEX rules, the down payment could have been as little as $1 billion, with the company borrowing the rest.
The biggest players on the commodity exchanges often operate as "swap dealers" who primarily invest on behalf of hedge funds, wealthy individuals and pension funds, allowing these investors to enjoy returns without having to buy an actual contract for oil or other goods. Some dealers also manage commodity trading for commercial firms. To build up the vast holdings this practice entails, some swap dealers have maneuvered behind the scenes, exploiting their political influence and gaps in oversight to gain exemptions from regulatory limits and permission to set up new, unregulated markets. Many big traders are active not only on NYMEX but also on private and overseas markets beyond the CFTC's purview. These openings have given the firms nearly unfettered access to the trading of vital goods, including oil, cotton and corn.
snip
------------------------
http://www.nowpublic.com/tech-biz/geneva-world-oil-trading-capital
Oil trading. No city in the world is home to as many traders as Geneva. They are secretive, immensely rich and well-connected. A glimpse into the nerve centre of a global business also shows why the oil bubble burst.
This is the story of a handful of men who moved to Lake Geneva in the 90s to make billions, achieved their goal in a decade and still walk about the city unrecognized. It is also the story of the city that helped them rake in the money, and became richer in the process. Torbjörn Törnqvist, Gennady Timchenko, Daniel Jaeggi, Marco Dunand or Daniel Fransen – their names are familiar only to insiders, and their companies are unknown to customers at the gas station. Totsa, Vitol, Gunvor, Litasco, Addax or Mercuria: those are Geneva’s independent oil-trading giants, who operate beyond the realm of the majors Exxon, Shell, BP and Total.
Take Törnqvist, for example. Wikipedia, the internet encyclopaedia, knows nothing about the Swede who learnt his craft with BP. Nor will Google tell you more. Törnqvist started his business more than ten years ago with mailbox companies in the British Virgin Isles, Cyprus and the Netherlands, founded together with his Russian partner Timchenko. In 2003, the companies started operations in Geneva, under the name Gunvor, at the address of a law firm. Today, Gunvor’s traders occupy five floors of an office building at N° 14, Quai du Général Guisan, a lakeside promenade. Women in jeans and neat shirts and men with red braces or accountant’s suits sit on white leather chairs in spacious offices. Ceiling lamps bathe the rooms in soft light. Two monitors on the white trading desks supply employees with current market prices. Floor to ceiling windows offer an uninhibited view of the lake, the Jet d’eau fountain and the Mont-Blanc range on the horizon.
Here, simple emails direct whole fleets of oil tankers across the seas. A typical deal may run like this: under the reference “Gunvor contract – approx 75,000 mt”, a trader communicates information about a 75,000 metric ton delivery that was discussed on the phone the day before. Gunvor, the seller, is delivering Russian fuel oil to a buyer in Singapore. Interposed is a broker in France who brought the parties together. A Persian oil tanker is to take the shipment on board in Estonia and unload it within 18 days in the Indonesian port of Karimun Island. There, an inspector from SGS, the Geneva inspection company, will measure the density, viscosity and water and sulphur contents of the goods. The price is set on the date of unloading based on the Asia-Pacific Arab Gulf Marketscan rates, plus a premium of ten dollars per metric ton. As usual, payment is due forthwith by telegraphic transfer to one of Gunvor’s accounts.
snip
--------------------------
Also look into Glencore (Marc Rich) and Trafigura (spun off from Glencore in 1993).
Most of these 8 firms were knee-deep in the Iraq UN Oil-for-Food Programme Scandal. Vitol was the company to organise the first, controversial, sale of Libyan rebel oil to Tesoro in early April 2011.
--------------------------
The Rich Boys: An ultra-secretive network rules independent oil trading. Its mentor: Marc Rich
http://www.businessweek.com/magazine/content/05_29/b3943080.htm
One brisk day last fall, globe-trotting oil executive Benjamin R. Pollner was leaving his luxury prewar apartment building on Manhattan's Park Avenue when detectives from Manhattan District Attorney Robert M. Morgenthau's office approached. They began asking him about his alleged involvement in the unfolding U.N. Oil-for-Food scandal. Pollner, a tall, lean sixtysomething who wears European-cut clothes and a world-weary visage, was taken aback, say investigators familiar with the incident.
He snapped that he was in a hurry to make an overseas flight and refused to answer questions. Before hopping into a car that whisked him off to John F. Kennedy International airport, Morgenthau's investigators say Pollner delivered a parting shot: "I did nothing in New York or the U.S. that would be considered illegal." To them, Pollner was admitting he had done something wrong -- just not in their jurisdiction. Pollner, who runs Taurus Petroleum mainly from offices in Geneva and London, hasn't set foot in the U.S. since, investigators believe. He didn't reply to several calls and e-mails.
On the morning of Apr. 14, David Bay Chalmers Jr., 51, who owns privately held oil-trading company Bayoil U.S.A. Inc., emerged handcuffed and bleary-eyed from his high-security mansion in Houston's ritzy River Oaks neighborhood. He had just been indicted by the U.S. Attorney for the Southern District of New York for conspiracy, wire fraud, and trading with a country that supports terrorism -- Iraq -- during the U.N. program. Chalmers has pleaded not guilty. Another trader, Patrick Maugein, nonexecutive chairman of London's SOCO International PLC oil-trading company, has been under scrutiny by the U.N. for his alleged role in a complex oil-smuggling scheme during Oil-for-Food, the U.N. program that allowed Iraq to sell oil for humanitarian purposes during a period of strict sanctions. Although many deals were legitimate, Saddam Hussein at times demanded illegal surcharges for the right to buy oil at below-market prices. Friends of Saddam's regime allegedly received sweetheart oil allocations, investigators say. Maugein denies violating sanctions or paying illegal surcharges.
LEARNING FROM EL MATADOR
What do the three men have in common, aside from their dubious deals with Iraq? They all belong to the ultrasecretive informal network of traders who dominate global independent oil trading. They don't necessarily act in concert with each other, but they often chase the same opportunities. They are the Rich Boys. All operate in the world of onetime fugitive billionaire Marc Rich, the most-wanted white-collar criminal in U.S. history until his controversial pardon on President Bill Clinton's last day in office in 2001.
snip
--------------------------------
A Few Speculators Dominate Vast Market for Oil Trading
http://www.sanders.senate.gov/newsroom/news/?id=a6aa9b84-140e-4df6-8198-10fe460c7dfb
Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses. But when the Commodity Futures Trading Commission examined Vitol's books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol's portfolio -- at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.
The discovery revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators. Other CFTC data showed that a significant amount of trading activity was concentrated in the hands of just a few speculators. The CFTC, which learned about the nature of Vitol's activities only after making an unusual request for data from the firm, now reports that financial firms speculating for their clients or for themselves account for about 81 percent of the oil contracts on NYMEX, a far bigger share than had previously been stated by the agency. That figure may rise in coming weeks as the CFTC checks the status of other big traders.
Some lawmakers have blamed these firms for the volatility of oil prices, including the tremendous run-up that peaked earlier in the summer. "It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency's laughable assertion that excessive speculation has not contributed to rising energy prices," said Rep. John D. Dingell (D-Mich.). He added that it was "difficult to comprehend how the CFTC would allow a trader" to acquire such a large oil inventory "and not scrutinize this position any sooner." The CFTC, which refrains from naming specific traders in its reports, did not publicly identify Vitol. The agency's report showed only the size of the holdings of an unnamed trader. Vitol's identity as that trader was confirmed by two industry sources with direct knowledge of the matter.
CFTC documents show Vitol was one of the most active traders of oil on NYMEX as prices reached record levels. By June 6, for instance, Vitol had acquired a huge holding in oil contracts, betting prices would rise. The contracts were equal to 57.7 million barrels of oil -- about three times the amount the United States consumes daily. That day, the price of oil spiked $11 to settle at $138.54. Oil prices eventually peaked at $147.27 a barrel on July 11 before falling back to settle at $114.98 yesterday. The documents do not say how much Vitol put down to acquire this position, but under NYMEX rules, the down payment could have been as little as $1 billion, with the company borrowing the rest.
The biggest players on the commodity exchanges often operate as "swap dealers" who primarily invest on behalf of hedge funds, wealthy individuals and pension funds, allowing these investors to enjoy returns without having to buy an actual contract for oil or other goods. Some dealers also manage commodity trading for commercial firms. To build up the vast holdings this practice entails, some swap dealers have maneuvered behind the scenes, exploiting their political influence and gaps in oversight to gain exemptions from regulatory limits and permission to set up new, unregulated markets. Many big traders are active not only on NYMEX but also on private and overseas markets beyond the CFTC's purview. These openings have given the firms nearly unfettered access to the trading of vital goods, including oil, cotton and corn.
snip
------------------------
