An email leaked from a Chevron employee to the media reveals how one of the world's biggest oil companies makes $2 million per day betting on futures:
The midday email, inadvertently sent Friday to media organizations, contained spreadsheets, tables and charts that gave a breakdown of Chevron's profits, losses and exposures trading crude and refined products such as gasoline.
They offered an unusually detailed look at how one of the world's largest energy producers was able to leverage its size and geographic reach to profit to the tune of $360 million this year to date through trading activities...
Fuel trading accounted for the bulk of the profit recorded through July 14 of this year. That segment posted a trading profit of $263.9 million so far this year, with diesel fuel and other distillates products contributing $71.6 million. The company's European products trading business wasn't far behind, with $68.3 million in profit.
Chevron (like BP, Total, and Shell) is colluding with financial terrorists to drive up the price of oil. The Wall Street “Crude Oil Casino” is costing consumers and retailers hundreds of billions per year:
According to the Commodity Futures Trading Commission, the regulator which oversees speculation in the oil and food markets, the number of of speculative bets on oil is currently at an all-time high, above even the extreme levels associated with the 2008 run-up in oil prices, when oil hit its highest price ever.
All of that speculation has driven up the price of oil, according to many economists and an analyst at Goldman Sachs. Sean Cota of the Petroleum Marketers Association said at today's press conference that a "bubble is underway" in the oil markets and that excessive speculation costs consumers and retailers $400 billion a year.
The scam is evident by the fact that the New York Mercantile Exchange (NYMEX) trades far more paper oil contracts than physical crude, notes Phil Davis:
The great thing about the NYMEX is that the traders don't have to take delivery on their contracts, they can simply pay to roll them over to the next settlement price, even if no one is actually buying the barrels. That's how we have developed a massive glut of 677 million barrels worth of contracts in the front four months on the NYMEX and, come rollover day – that will be the amount of barrels "on order" for the front 3 months, unless a lot barrels get dumped at market prices fast.
Keep in mind that the entire United States uses 'just' 18M barrels of oil a day, so 677M barrels is a 37-day supply of oil. But, we also make 9M barrels of our own oil and import 'just' 9M barrels per day, and 5M barrels of that is from Canada and Mexico who, last I heard, aren't even having revolutions. So, ignoring North Sea oil Brazil and Venezuela and lumping Africa in with OPEC, we are importing 3Mbd from unreliable sources and there is a 225-day supply under contract for delivery at the current price or cheaper plus we have a Strategic Petroleum Reserve that holds another 727 Million barrels (full) plus 370M barrels of commercial storage in the US (also full) which is another 365.6 days of marginal oil already here in storage in addition to the 225 days under contract for delivery.
...There is nothing that the conga-line of tankers between here and OPEC would like to do more than unload an extra 277 million barrels of crude at $112.79 per barrel (Friday's close on open contracts and price) but, unfortunately, as I mentioned last week, Cushing, Oklahoma (Where oil is stored) is already packed to the gills with oil and can only handle 45M barrels if it started out empty so it is, very simply, physically impossible for those barrels to be delivered. This did not, however, stop 287M barrels worth of May contracts from trading on Friday and GAINING $2.49 on the day.
A recent UMass study revealed that at least 30% of the price of gasoline is due to financial speculation: