I am deeply concerned at what I believe to be a price bubble. It looks to me as though the physical market - ie the crude oil in the supply chain - has been inflated in some way (using forward physical contracts, actual purchases and storage in tank and on vessels) probably by a few of the major players acting in concert.

Something like this has been on the cards for years, as I said

Here

almost three years ago.

The risk is getting even more concentrated in single points of failure aka clearing houses than it was then.

The sublimely greedy ICEFutures - which is essentially the opaque market within which this Bubble has been inflated - is about to take on its own clearing, and this is at last raising a few hackles

Market questions clearing transfer

When this goes ahead on 1st July, not only will ICEFutures then cream off more profit a la Deutsche Borse but energy risk will no longer be "pooled" with other London commodity and financial futures risks as it is now.

The whole thing is an accident waiting to happen - I am irresistibly reminded of the Tin Crisis of 1985 - and IMHO if anyone cared to look they would find the relationship between Goldman Sachs and BP at the bottom of this bubble.

I am not saying that prices could or should return to previous levels, but I do believe that there is a speculative bubble sitting within the ICEFutures "Dark Star" and its membership.

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky