World Series of Crude Oil
Source: Seeking Alpha, Bob van der Valk (10/27/09)
"Winner decides winter gasoline prices"
The big hedge-fund managers and other large speculators make up the Wall Street Titans and are betting the outcome will be a crude oil price increase of $85 a barrel by year's end. They already increased their net-long position in New York crude-oil futures last week, according to CFTC.
Net long positions are bets that prices will rise and outnumber short positions by 74,383 contracts on the NYMEX—an 8% increase over the week before.
That confirms the Goldman Sachs game plan; and it is working. Their analysts are circulating any story boosting the use of crude oil in economies doing better than ours, such as India and China.
The Nigerian rebels blew up some oil installations in the Delta region of that country in the last two weeks. Those are the heavy hitters for the Titans, and when they are up to bat the opposition seemed to shrink away from making defensive moves.
Of course, the really heavy hitters are Goldman Sachs and Morgan Stanley, with their advisors telling big money investors to use crude oil as a hedge against inflation. Meanwhile the oil companies are trying to keep their refineries running and hopefully make a profit.
On the other side are the Texas Oil Barons and they are hoping that the Titans will not succeed again this time. They are convinced that the Titans picked the wrong time of the year to start talking up the price of crude oil.
U.S. crude oil inventories, already as historic high level, will increase even more because oil companies are shutting down or cutting back production at their refineries.
My call is that the oil companies will need to pitch a perfect game to win one for the Gipper.