Goldman has been playing this game and now JP Morgan is jumping in the mix. According to Bloomberg JP Morgan has leased a tanker to store heating oil off shore. Goldman has been doing this with regular oil for months.
So, as I have said numerous times, we are drowning in oil. Inventories are sky high. Yet, oil prices keep going up (until today). This is because of 1) market manipulation - if held offshore they don't go in the official inventory numbers and it makes current supply scarce and 2) China stockpiling probably because they would rather pay for an overpriced asset like oil than pay for an overpriced long term US bond.
Either way, this drives up input prices for companies and hurts the consumers where more of our dollars go to pay for fuel at the pump. JP Morgan of course has TARP money, tax payer money, to play this game. If the bet goes bad, I guess they are to big to fail and you and I will bail them out. Got to love the world we live in.
JPMorgan Chase & Co., the second- largest U.S. bank by deposits, hired a newly built supertanker to store heating oil off Malta, shipbrokers reported, in the company’s first such booking in at least five years.
“It’s opportunity-driven,” Sverre Bjorn Svenning, an analyst at Fearnley Consultants AS in Oslo, said by phone. “I doubt it’s going to be a permanent or new sort of trade.”