Crude oil - we've all been scammed again

Oilintel, Houston, TX - When we wrote at midday (Friday) that we had no idea where this market was heading today, we never imagined this would happen. July crude oil and contracts soared to new record highs while July heating oil, while outpacing both crude and gasoline, did not set a new record.

Crude oil soared to a new high of $139.01, surpassing the old record of $135.09 while gasoline hit $3.5650, 4.50 cents above the old record.

As if in direct defiance to the CFTC, speculators reacted as if Katrina II hit the Gulf and wiped out all refineries, the Saudi oilfields were on fire and Iran closed the Strait of Hormuz. A sequence of events like these would be necessary to justify the unprecedented gains today in energy futures, not a 4 or 5 cent drop in the dollar, or a well-timed forecast from Morgan Stanley.

You see Morgan Stanley would say "we owe it to our clients to let them know what we believe will occur." But the reality is, they know full well it will be leaked, and acted upon. They know they will get all the help they require in achieving their prediction of $150 per barrel by July 4. We just didn't think it would happen in a day or two.

What happened today is another severe blow to the U.S. economy as Wall Street keeps plowing the money that the Federal reserve made available to them back into commodities to make up for the huge losses they sustained in the housing crisis.

These large commission houses are laughing all the way to the bank as consumers everywhere make decisions about driving to work or eating that day. It's become a blatant and immoral scam that has to end. It's almost as if they know the end is near, so they will ride it as hard as they can until the CFTC pulls the plug.

Naturally, some analysts point to statements by an Israeli official today indicating that an attack on Iranian nuclear facilities might be unavoidable.

Of these factors, not one reduces the amount of oil available today, tomorrow or next week. It's time for the U.S. Congress and officials in London to change limits on speculative positions, strip away commercial status of all investment banks, and change the rules that stipulate commercial status only for companies that can document 90% of their business is energy-related, from a physical market standpoint.