The secret group setting the price of oil: Us.

By Leah McGrath Goodman, contributor
March 9, 2011, 11:56 am

It was dawn when I received my first of many after-hours phone calls from Mark Bradley Fisher, otherwise known as the Fish. A self-made millionaire with a Napoleonic sense of his own destiny, Fisher prided himself on his work ethic, his intellectual prowess, and his ability to rise early in the morning and toil late into the night. As a result, he had a habit of calling me almost exclusively at inconvenient times.

It was February 2005, the year Wall Street began to realize something was wrong with the oil market. Fisher, however, was not particularly disturbed. After all, he was one of the wealthiest and most powerful energy traders in the world.

Fumbling in the darkness, I nearly fell out of bed trying to find my cell phone. As I flipped it open, Fisher sounded none too pleased at the five-ring wait.

"What are you doing?" he barked in his trader's rasp, the line crackling softly in the background.

http://features.blogs.fortune.cnn.com/2011/03/09/excerpt-from-the-asylum-the-renegades-who-hijacked-the-worlds-oil-market/

GOD.

honestly asking, no sarcasm intended. really.

Before Reagan and Wall Street fucked everything up, the price of oil was basically set by a few wise men in Texas.

I am not making this up.

Walter Sterling, George Brown, Sam Rayburn and a host of successors would actually meet at the old Rice Hotel in Houston and basically set the price of oil for the coming months. As the world moved into the 60s, this worked just fine, for all intents and purposes.

Then the Nixon people decided that the US should hoard domestic production (Strategic Reserves) and buy overseas (Saudi) oil.

Scoot forward to '74 and Carter's fucked-up deal when the Saudis controlled Supply.

Then along came the Free Market crooks under Raygun and away we went.

I know about the Rice Hotel part because my grandfather was one of those guys.

Ironically, the suite where they would meet was Room 850, where JFK spent his last night on earth. I am convinced that some of those guys had a hand in his murder.

I spent $80 to fill my car yesterday.

Sonoman

"I am convinced that some of those guys had a hand in his murder." Their tentacles are still felt today.

ie it should be traded. Then you say that a price-fixing cartel in Texas 'worked just fine' to set the world oil price.

Which is it you're advocating?

But it was too danged early in the morning.

Their pricing was basically based on projected supply, demand, and known reserves.

I am totally opposed to Wall Street setting prices.

Sonoman

The heads of Exxon, BP, Shell etc.; reps from the govts of Saudi Arabia, Iran, Russia, and other major producers; reps from the govts of China, the USA, the EU and other major consumers? These are the people you'd need to judge supply, demand and reserves.

If you could get them to tell each other the truth, could you really expect them to agree on prices? It seems to me that a market is far more likely to balance supply and demand successfully. I suspect a market would form outside your council-controlled system anyway, since it wouldn't have the force of law behind it, being international. It'd be very difficult to stop people trading oil if they wanted to.

"............
O'Reilly: . . . But you still haven't explained, and I don't know if you can, Mr.—with all due respect, Mr. D'Agostino—who puts the $120 on—a human being has to do that. And somebody has to make a decision.

D'Agostino: It would be great if there was just one person who was doing that, because then we could go talk to him.

O'Reilly: But there has to be. Because just to get the word out, somebody has to say the word. so if you don't know, you don't know, because I certainly don't.

The viewers of the O'Reilly Factor also could not believe D'Agostino was telling the truth. After the program aired, they responded with dozens of furious e-mails.

And one death threat.

Contrary to popular opinion, oil prices were not being controlled by Arabs or leftist dictators. They were being controlled by the same bootstrapping traders who had embarked on an extraordinary experiment from the depths of a redbrick mansion in downtown Manhattan exactly thirty years earlier.

Individuals who, like the anonymous Wall Street professionals about to unleash a crippling financial crisis on the world, took the subway and ferry to work, earned unheard-of riches, gave to charity, and thought nothing of bringing the global economy to its knees."