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[patanx]

If the recent plunge in gas prices is the result of a conspiracy by President George W. Bush to help the Republicans retain control of Congress, as 42 percent of Americans believe, according to one Gallup poll, a lot of Wall Streeters wish they'd been in on the plot.

So what really drove prices down - if not an Oliver Stone-worthy scenario involving the Commander-in-Chief, the House of Saud and Secretary of the Treasury Hank Paulson cajoling his cronies at Goldman Sachs to sink the crude market?

By late summer, hedge funds and other investors had poured billions into long positions in oil, gasoline, natural gas and the rest of what traders call the "energy complex," all betting on a replay of the severe 2005 hurricane season that sent prices soaring in the wake of Katrina and Rita. But one day after oil reached a monthly high of $76.98 a barrel on Aug. 7, government meteorologists downgraded their hurricane forecast and cautioned that a repeat of 2005 was "unlikely."
That announcement, combined with the end of the summer driving season and a recalibration of the Goldman Sachs commodity index that reduced the weighting of gasoline, prompted speculators to head for the exits even faster than they'd piled in.
The switch in Goldman's basket of commodities had been previously announced by the firm, but that didn't stop the conspiracy theorists. "Hmm, what a coincidence, luring Goldman's top dog to take a HUGE pay cut by becoming Treasury's top dog, and then Goldman Sachs makes this unexpected decision, serving to dramatically drive down gas prices," said the Grey Matter, a liberal blog. But the grassy-knoll crowd didn't bother to crunch the numbers.
According to Joel Fingerman of Chicago-based OilAnalytics.net, between the peak of $77 a barrel in August and the October low of just under $58, traders dumped nearly 40 million barrels (a 20 percent drop) from their long positions. The volatile gasoline market showed an even sharper decline - with traders cutting long positions from 32 million barrels in midsummer to just 1.7 million in October.
"Whatever you want to call it - speculators, fast money, hot money - a big part of the drop in crude that we've seen this year is because of selling by hedge funds," says Merrill Lynch technical analyst Mary Ann Bartels.

That avalanche of cash also explains what's got the paranoid types talking - not merely the timing of the plunge in prices but its rapid speed. "Speculators create more velocity around existing trends," says Bartels. "Things are happening a lot more quickly in these markets than they used to."

[sunabeach]

George Dubya played with the intelligence on WMD so the dems can play with facts regarding a vast right wing conspiracy on oils drop before elections.

Alls fair in love and war (and politics too).

Only a fool believes what either party says. I believe the markets, most of the time anyway.

[currencia]

Hmmm, there is hundreds and thousands of years of fact established history that says markets have often been controlled and manipulated by governments and individuals.

You would rather believe that the sharp recent drop in crude and gasoline is caused by "hedge fund selling" according to the expert technical analysis of Carnac the geniouses at Merrill Lynch ( who by the way were getting their customers to go long oil and gasoline at every opportunity of the dumb customer listening to their hyperbole).

Only a fool believes what political parties say, but you believe in the integrity of what markets say and do? Jeezes, give yourself a reality check.

[sunabeach]

I said "most of the time anyway"

and you said

"Hmmm, there is hundreds and thousands of years of fact established history that says markets have often been controlled and manipulated by governments and individuals.

I don't know where you get your facts from but is there really much difference from my saying "most of the time" and you saying "have often been" although we have oppossing viewpoints.

As to the facts, unless you would like to provide them showing the Oil majors, the Saudi's, the Bush White House or whomever it is that got crude oil down for the election, controlled whether we had any Category 4 or 5 or even Cat 1 Hurricane in the Gulf, made sure there were no oil workers kidnapped in Nigeria, no Russian oil executives jailed in past year, Mild winter in US last year and about normal one so far this year, etc etc.

The Republican party have for a long time attacked the Democrats as in favor of big government but now the size of goverment has ballooned under Bush. The Democrats have for long time accused the Republicans of all kinds of conspiracies. They are both useless. Not a fact just my viewpoint.

As to the price of anything, there always has been and always will be some manipulation at different moments in time. The market eventually corrects those excesses artificial or not. If you don't believe that then I don't know why you would even bother trading.

I don't know whether you trade Crude or not, maybe you are just commenting on this subject? But from my own experience and what I have read many an author say, Don't look for excuses from the market and other participants as to why I lost on a trade. The market makers did. They took out my stop. News broke that the insiders used against me. The big boys did this or that.

I said enough or too much depending on one's .... viewpoint.