Article: Phil Davis sounds off on "Goldman’s Global Oil Scam Passes the 50 Madoff Mark!"

Phil Davis has sounded off about crude oil pricing in this article: Goldman’s Global Oil Scam Passes the 50 Madoff Mark! | Phil’s Stock World, at http://www.philstockworld.com/2009/11/11/goldmans-global-oil-scam-passes-the-50-madoff-mark/. I know I've been posting charts here showing oil stalled at or from $80 but with a higher Fibonacci retrace at $92 if needed. Yet there's a bigger question of whether oil is in a bull market or bear-market rally. There are reasons to think it can be a bull market - concerning, I know. Now, I don't normally look too far into fundamentals because that can be a very subjective exercise. But this article by Phil has that "wow!" factor my readers will appreciate. So here's a quote - then click the link to read the whole thing at Phil's site:

A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades. "Round-trip" trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.

"Traders of the the ICE core membership (GS, MS, BP, DB, RDS.A, GLE & TOT) wouldn't really have to put much money at risk by their standards in order to move or support the global market price via the BFOE market. Indeed the evolution of the Brent market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and "squeezing" those who had sold oil they did not have. The fewer cargoes produced, the easier the underlying market is to manipulate." - Chris Cook, Former Director of the International Petroleum Exchange, which was bought by ICE.

Well folks - it gets even more eye-opening than that. I sure can't speak to the accuracy of any of it, but assuming it's true, it's quite noteworthy.

What it means for the price of oil is another matter! We'll keep charting it - at this point it looks at risk of another test lower, which obviously will be negated if it makes a new rally high suggesting it wants to try for up to $85 or $92.