“Spot and Futures Markets are another method to manipulation of oil prices”

By Alex Mai at 5 July, 2009, 12:29 am

“The oil spot market was created in 1969 by the Lazard/Rothschild-allied Philipp Brothers, then the world’s largest metals trader. Philipp Brothers, largely in the person of their top trader Marc Rich, began by selling small quantities of Iranian crude oil to independent refiners. The oil shocks of 1973 and 1979, which were orchestrated by the financier oligarchy under the cover of the OPEC oil embargo and the fall of the Shah in Iran, resulted in a shift in oil pricing away from long-term contracts toward the Rotterdam-based spot market. By “spot” is meant, that one buys the oil at a market only 24-48 hours before one takes physical (spot) delivery, as opposed to buying it 12 or more months in advance. In effect, the spot market inserted a financial middleman into the oilpatch income stream in much the same way that deregulation would later do for electricity.”

“Today, the oil price is largely set in the futures markets. The two principal locales which dominate oil futures trading are the London-based International Petroleum Exchange (IPE), established in 1980, and the New York Mercantile Exchange (NYMEX), which is more than a century old, but also first started trading oil futures in 1983. Traders call futures contracts “paper oil”: the contracts are a paper claim against oil, which is far in excess of the volume of oil produced and actually delivered at oil terminals on behalf of those contracts are another way the price of oil is being manipulated upwards.”

http://www.larouchepub.com/other/2004/3123oil_speculation.html