There is a vast difference between what Enron did in California, and managing to have a big impact on a global commodity that trades on an enormous scale.

I mean no disrespect here. I follow your contributions avidly. But I disagree. California is something like the 10th largest economy in the world. The scale of market manipulation there was profound... and it went on for a long while. During which... it was denied by very experienced finance professionals.

In the recent Amaranth case, Bloomberg reported that Hunter (the trader) had purchased, in some cases, 20% of the market's available positions. Nymex NG, though not global, is not a small market either. My point is that the technology, the leverages and the access to many, many billions of $$$ does exist. My disagreement has nothing to do with gasoline going up or down, it has to do with your assertion that oil is too big a commodity to manipulate. Nate Hagens reminds us twice a week that's it's the marginal barrel that prices the market.

It would be interesting to know how Goldman-Sachs traded the market in the run-up to reducing that allocation <g>.

The mistake your making is that if any manipulation is taking place its in the context of the oil market and its financial not internal to the oil industry.
Your correct in that rising gasoline inventories are critical for translation into a drop in price at the pump.
And I suspect if anyone is attempting to manipulate the market they would not do it without rising inventories.
But on the same hand gasoline stocks have not exactly been low for several months and the effect of pump price was small till....
The price of crude dropped.

Your dealing with the current situation not what initiated it. I assert rising inventories
have been happening for a while without a dramatic drop in prices.

It seems to be crude is starting to rise now so we will get a chance to see how much inventories and crude prices interact to set the price.

But they keep trying to rise every morning till about noon
and someone pulls the price down all afternoon.
I guess the guy does not get up early. Just check prices after 2 pm or so after he gets back from lunch.

But there is no question that oil companies, speaking with a broad brush, prefer the current party in power in the U.S. to someone like Chavez - and the reasons have little to do with morality, and an awful lot to do with profit, and who gets to do what with it.

There is no question in my mind that this preference will be expressed in as many ways as possible. This is simple human nature, and not a conspiracy theory.

If a hurricane had hit a major swath of refining or production regions, a fall in prices this large (or at all) would not have occurred.

But here is a counterexample - why is Saudi Arabia still seeming to pump full out even as prices 'collapse?' (Collapse is so relative these days.) Could it be that the Saudis have a preference in the American elections? After all, Saudi Arabia could easily have oil at a price of $70 a barrel plus, just by announcing a production cut - or even by saying they anticipate cutting production on Oct. 21. But even pumping full out, the price seems stubbornly persistent above $60 a barrel.

We can play this out in any number of ways, but in my case at least, it is all just a game.

Nonetheless, a lower price before the elections would seem to be in the long term interest of oil company profits, and remarkably, prices are lower. Peak oil, in part, is the point where reality takes over from playing games - as witness how oil just doesn't seem to want to go below $60 a barrel, regardless of OPEC's commitment to full production. Of course, maybe a country like Iran is cutting production in an attempt to get Bush booted - this game is very fluid, which is why manipulation is such a silly term. There are too many players with too many goals for any of them control the outcome for any lasting time. But long enough for some of the world's largest and most powerful corporations to politically ensure their continued profits in the world's largest single oil market? I don't need to believe in any fantasies to think that greed is the dominant player in the marketplace, just as power is in politics. And when the two areas share a common interest - holding on to what they have - it is hard to imagine them doing nothing while potentially losing what they possess.

Your comment below makes a lot of sense to me.

If one has a pretty basic understanding of economics, they should understand that prices can't fall for long when market fundamentals don't warrant it. If Bush called up all of the oil companies in the country and got them to start dropping price, then we would simply draw down inventories, and potentially run out of product as demand picked up.

Politicians can try to do what they feel is best to ensure their reign of power continues. But their motives don't necessarily match those of an oil Co CEO. If oil companies were foolish enough to abide by the requests of the government politicos, I can't see them hanging on to these politico-prescribed manipulations when it starts to damage their bottom line.

My point is, if Bush-Dick are in cahoots with Big Oil on manipulating prices, there's no guarantee that these manipulative actions will be supported by the market through November. I don't think Big Oil would take that risk, so it's unlikely they'd even entertain the idea, in my opinion.

Tom Anderson-Brown

As a general matter, there is one very substantial factor that diminishes the significance of the scientific mindset as a basis for intellectual superiority, and that is the tendency of the scientific mindset to induce an unwitting allegiance to circular reasoning as the basis of one's fundamental convictions.  In other words, people of a scientific bent often fail to recognize that empirical data which they believe successfully PROVES something does not in fact do so.  This phenomenon arises due to the fact that their pre-conceived, a priori assumptions FATALLY BIASES their interpretation of empirical data to reproduce (in logically circular fashion) those same a priori assumptions as the only seemingly logical outcome that the data will yield.

I am very familiar with this type of pervasive circularity as an integral aspect of the positions of those who deny the historicity of miracles, predictive prophecies, etc., in the canonical Scriptures of the Old and New Testaments.  What invariably underlies the veneer of erudition and intellectual sophistication of their scholarly presentations is a fallacious core of logical circularities that recycle their (unproven and unprovable) anti-supernaturalistic assumptions as allegedly iron-cast conclusions of detailed Scriptural analysis.

For example, let's say gas is $3 per gallon for Average Joe - but drops back to $2.75 soon after those (hypothetical) phone calls are made.  That $3 per gallon really put him in a pinch, so is a decline to $2.75 really significant enough to make it so that he now magically no longer perceives being overextended financially.  Is it really enough to make a difference in demand and inventories ?  Say the ole full size pickup costs 75 bucks for a fill-up - now drop the price by a quarter - he's still looking at about $70 to fill up - does that decrease really drive demand upward so forcefully ?  He might really want to buy all the happy talk and cheerleading from the media about gas prices and how much they're down - but at the end of the month he's now paying $700 in gas versus $750 - which is STILL twice what he can really afford...  Joe must be pretty delusional if, after getting walloped by the previous months credit card bills, a subsequent $0.25 drop per gallon makes the pain go away enough so that demand is instantly re-instated.  Is that really how it happens - is there that quick of a correlation between price drop and increased demand ?   I apologize for my lack of economic knowledge on even the basics...

 It has to make you wonder at least a bit though that with the inside information the administration must have about other economic factors - job loss, the wobbly housing market, war-making etc. - isn't it conceivable that they know there wouldn't be a turnaround in demand and even if there is wouldn't there at least be a sufficient lag time to get them thru election season.  I defer to RR based on his knowledge of these issues but I wouldn't put it past the administration - I think they could definitely find some way to manipulate things and then bank on demand not recovering due to other factors to hide what they were up to.   I'm just sayin'...

Criticism of a notion of an universal scientific method - the method - is quite common and often accepted, i'm surprised that you bring such steam into this. It strikes me that there could be a misunderstanding present. My previous post was not exactly a brilliance in clarity, pardon that. I'll be fair and will not adress mathematics and "the method" here, but there are plenty of reading on the topic available.

Being falsifiable is a validation of many theories arrived at by using the scientific method. That is, it is a valid theory, not necessarily a proven fact. However it is not the, in and itself,  the scientific method.

My position is that what most people think of as the scientific method is more like a guidance or a set of rules that the scientist may or may not follow. Despite what your possibly biased mind might think, there's no need to lecture me on "the scientific method". Authority is a central element in science. People don't waste time on reading about new revolutionary theories from an unknown scientist. Therefore i will not expect you to listen to me, an anonymous poster at TOD.

Perhaps you are all ears to Werner Heisenberg, one of the pioneers in quantum theory? By the way, it seems like your scientific method starts with observations.

"It is quite wrong to try founding a theory on observable magnitudes alone. In reality the very opposite happens. It is the theory which decides what we can observe."

Paul Feyerabend's most famous book is named "against method". His position is that methodological rules generally do not contribute to scientific success, and he provides counterexamples like the Copernican revolution, where he show that all common prescriptive rules of science are violated, and still everyone agrees that the copernician view is progressive. He ironically made the rule for science; anything goes. Feyerabend was also critical of falsificationism, arguing that using a naive falsificationist rule wouldn't be good fore science. He provide examples from quantum mechanics:

"Renormalization' in quantum mechanics provides an example of his intentionally provocative style: "This procedure consists in crossing out the results of certain calculations and replacing them by a description of what is actually observed. Thus one admits, implicitly, that the theory is in trouble while formulating it in a manner suggesting that a new principle has been discovered" (AM p. 61). Such jokes are not intended as a criticism of the practice of scientists. Feyerabend is not advocating that scientists do not make use of renormalization or other ad hoc methods. Instead, he is arguing that such methods are essential to the progress of science for several reasons."

Well, that all depends on your definition of a fact. Thousands of scientists would disagree with you. There are literally millions of scientific facts. And I have met hundreds of people who refuse to absorb a fact. You must have lived a very sheltered life not to have met such a person.

Interpretations are often mistaken for facts. Facts are almost independent of who's observing, that's why they are called facts. And i do not understand why you connect denial of facts specifically to religion.

You believe in evolution but think the current paradigm is an intellectual joke? Spoken like a true creationist! Yes evolutionary theory is stunningly simple but nevertheless a lot of people simply cannot grasp its very simple principles.

Short comment. It often strikes me that studying physics, which really is the simple science, answers are pretty complicated and hard to master - and the participants easily admit contradictions and uncertainties within the science. In biology, the complex science, the atmosphere is different; simple answers and a know-it-all attitude.

But simply because a 15 year old genius cannot understand it does in no way invalidate natural selection or even the current paradigm. That is about the most absurd thing I have heard in years.

I agree, but it does interfere the hypotheses that criticism happen because lack of knowledge. You state yourself that current evolution theory is simple, so how come it's reasonable to believe that a genius don't understand it?

Summary:
There are lots of scientists and philosophers doing good criticisms to "the method". Pretty often they point out divergences between practice and theory, fueling the debate and worrying philosophers that there is no general description of science, an answer that some dislike and others enjoy. In the meantime the sheeps wander around thinking that those scientifical guys are really objective.

My position is that i'll let "the method" satisfy itself if i find it useful in my work.

I though do stand that some things can only be talked about, never meaning to have the other convinced by the one to a differing viewpoint.  It's the nature of mankind to form stone walls that close off the mind to changes, for the good or for the bad.  I would not want to remove this feature of the genetics of mankind.  I would seek to know that it is there and find ways to dicuss it over a hot cup of tea and a leg of cow, pork or frog, or for those that can't stand to see an animal hurt a leg of brocoli or lettuce.

My e.mail is ceojr1963@yahoo.com.  

But they were.  And that was two years ago, before Iraq descended into total anarchy, before much of the torture "debate", before Josh Bolton...

The list goes on.  And on.

I think at this point you can objectively say that this president is a horrible one - and while the Republican Party itself may or may not be more corrupt than the Congress of 100 years ago (which, to be fair, was way out there), I think it's fair to say there's a pretty big goddamn difference at this point and time.

Loading non-political agencies, important non-political agencies, with people who worked campaign rallies, then firing any career professional who dares not to reach their conclusions is bad government.  Having good friends who own the press run your year-round PR campaigns(because you can't think of any other way to lead) is bad government.  Blatantly violating a document you swore to uphold is bad government.  Being unable to admit you're wrong, or take action to correct yourself, is bad government.

Objectively bad.  Combined together, historically bad.

The thing that amazes me is the volatility in the pricing over the past 10 days.

Last week, Thursday morning at a string of 5 stations the price was $2.07 to $2.14.  In the afternoon every station was up to $2.35.  By Friday afternoon most had dropped back to $2.25.

Up through Tuesday morning prices had dropped down to $2.14 at all 5 stations.  On Tuesday afternoon all 5 stations were back up to $2.29.  This morning these 5 stations were in a range of $2.12 to $2.26.

I have trouble understanding how 5 stations can one day range their price by $0.15, then all jack to the same price that afternoon.  These 5 stations consist of 2 Holidays, a SuperAmerica, a Mobile, and a Conoco, and they are spread along a 10 mile stretch of highway.

It confuses me how from day to day they can vary the price by more then 10% between stations, all raise and lower prices by 10% or more, and within a 3 hour span go from a $0.15 spread in prices to all 5 stations being the same.

The amount of volatility is mind boggling.

It doesn't make a lot of sense to have the bulk of your supply with long term contracts tied to spot price, defeats purpose. But then again... My guess is you'll never get a clear picture because the oil companies will say contracts are proprietary.

The one piece of data is profits, which show the oil companies aren't spending 60-70 a barrel to buy oil.