Goldman Sachs again in the middle
The oil price today, unlike twenty years ago, is determined behind closed doors
in the trading rooms of giant financial institutions like Goldman Sachs, Morgan
Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS. The key exchange in
the game is the London ICE Futures Exchange (formerly the International
Petroleum Exchange). ICE Futures is a wholly-owned subsidiary of the Atlanta
Georgia International Commodities Exchange. ICE in Atlanta was founded in part
by Goldman Sachs which also happens to run the world's most widely used
commodity price index, the GSCI, which is over-weighted to oil prices.
As I noted in my earlier article, ('Perhaps 60% of today's oil price is pure
speculation'), ICE was focus of a recent congressional investigation. It was
named both in the Senate's Permanent Subcommittee on Investigations' June 27,
2006, Staff Report and in the House Committee on Energy & Commerce's hearing in
December 2007 which looked into unregulated trading in energy futures. Both
studies concluded that energy prices' climb to $128 and perhaps beyond is
driven by billions of dollars' worth of oil and natural gas futures contracts
being placed on the ICE. Through a convenient regulation exception granted by
the Bush Administration in January 2006, the ICE Futures trading of US energy
futures is not regulated by the Commodities Futures Trading Commission, even
though the ICE Futures US oil contracts are traded in ICE affiliates in the
USA. And at Enron's request, the CFTC exempted the Over-the-Counter oil futures
trades in 2000.
More on the real reason behind oil prices:
By F. William Engdahl
Global Research, May 21, 2008
www.globalresearch.ca/index.php?context=va&aid=9042
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