More notice for U.S. government's political intervention in markets


9:47p ET Tuesday, October 3, 2006

Dear Friend of GATA and Gold:

More financial market participants are sensing or even recognizing the increasing intervention in the markets by the U.S. government and its agents. Today's most telling observations on this score may have come from Jeffrey Saut, chief investment strategist for Raymond James Associates in St. Petersburg, Florida, as he was interviewed by (who else?) Jim O'Connell on the "Market Wrap" program on ROB-TV in Canada.

Saut called attention to the recent great diminishment of the gasoline component of the Goldman Sachs Commodity Index and the massive selling this caused in gasoline futures. Saut speculated that this had something to do with the looming congressional elections in the United States and the majority party's desire to get gasoline prices down before voters go to the polls.

Saut also pointed out the development described in the news story appended here, this week's decision by the U.S. Energy Department to delay purchases for the national strategic oil reserve and to delay until next year the collection of 1.7 million barrels still owed to it by oil companies.

That is, again it seems that the government is eager to bail out commodity shorts and punish commodity longs.

For one week you will be able to find ROB-TV's interview with Saut at the network's archive here:

The interview is in the Tuesday column at 4:15 p.m.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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U.S. Energy Dept. to Hold Off
SPR Oil Purchases Until 2007

By Ian Talley
Dow Jones Newswires
Tuesday, October 3, 2006

WASHINGTON -- The U.S. Department of Energy will delay purchasing oil to fill the nation's strategic petroleum reserve until at least after the winter heating season, a spokesman said Monday.

Earlier this year President George W. Bush ordered the department to halt filling the reserve ahead of the summer driving season, when gas prices edged up to nominal highs.

Last year the government sold crude from the reserve -- a 727-million-barrel federal oil depository designed to cushion the country against supply disruptions and subsequent petroleum price rises -- to meet emergency demand in the wake of a nasty hurricane season.

In June, the reserve held almost 688 million barrels of oil.

Department spokesman Craig Stevens said the department had agreed to hold off collecting 1.7 million barrels still owed to it from oil companies until the second quarter of 2007. Furthermore, given that the department is "satisfied with the current level in the SPR" and it was wary of affecting the market ahead of the high-demand winter heating season, "we have no plans currently to use the $600 million (from last year's oil sale) to fill the reserve," he said.

He said once the department did decide to start buying crude for the reserve, it would be done over a period of months in order to minimize the impact on the market.

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