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Other-LiveI investigate oil companies that manipulate gasoline and oil prices. I track oil tankers at sea, deal with whistle blowers, research Standard Oil, and have gone undercover at industry conferences. AMA!

Jan 2nd 2018 by st999 • 15 Questions • 1286 Points

My short bio: My name is Cody Rosenfield, I have been investigating oil market manipulation since early 2015. Oil companies use price manipulation to target specific regions and make arguments against environmental protections. For example, oil companies routinely manipulate California oil prices – then claim that it is California’s clean energy rules that force the prices to be so high. My work is to reveal the manipulation and curtail this false argument.

In 2017 I left the organization I spent three years at in order to try and look at other markets besides California. I’ve spent the last 9 months looking at the United States oil markets, and seeing if I could start an organization to focus solely on oil price manipulation issues. The data is incredibly expensive (just buying crude oil prices for specific a specific type of crude oil over time costs nearly $3,000).

I haven’t been able to secure funding, but I’m starting a new job in a week that I'm very excited about that has to do with oil/energy issues. Oil market manipulation is my passion, and I will continue this research and contact with reporters/others interested in the movement.

My work was initially focused in California, which is the 3rd largest gasoline market in the world after the United States as a whole, and China.

I was introduced to the work when ExxonMobil’s refinery in Torrance, California suffered a massive explosion in February of 2015. The refinery stayed offline for a year and a half – causing a huge price crisis in California. Californians were paying $1.50 more per gallon of gasoline than the national average. Californians paid roughly $10 billion more in gasoline prices due to the shortage perpetrated by ExxonMobil and their allies.

ExxonMobil sold the refinery in mid-2016, and the new owner’s CEO stated publicly that he believed ExxonMobil purposely kept he refinery offline.

I was shocked at how little research was going into the issue, and how no law enforcement agency was taking responsibility for trying these cases. There are specific laws/rules by the Federal Trade Commission regarding oil price manipulation, but the FTC has NEVER utilized the rules to try a company. Americans have spent nearly $6 trillion on gasoline since 2000, and there are essentially no regulators paying attention.

I was urged to do this AMA by r/MechanicalKeyboard, after I posted the keyboard that I use to track ships at sea carrying oil. See that post here: https://www.reddit.com/r/MechanicalKeyboards/comments/7nnizc/i_use_this_to_track_oil_tankers_at_sea_watching/

My Proof: https://twitter.com/CodyRosenfield/status/948325300638597120

NEW PROOF https://imgur.com/1Pipfbq

HOW TO GET INVOLVED A lot of people are asking if they can help out/volunteer in some way. If you're interested, send me a pm, and what you're interested in doing and I will try and respond to everyone.

UPDATE Thanks everybody for your interest. I will be answering further questions first thing tomorrow morning.

Q:

Hi there!

Have you primarily done this research in your free time?

What do you plan to do with the information you've discovered?

What's the most surprising, positive information you've learned?

1. By: twozen
Thread | Permalink
A:

1) No I have done this as my job since 2015. 2) When I find information I usually write a report/memo and circulate it to reporters, oil experts, and then try and push regulators/politicians to act by making the information public.


Q:

Do you work for the government, media or some other kind of group?

edit: I just saw your video link, that you work for consumerwatchdog.org. This is really cool work! I love financial or corporate detective work.

2. By: dsbtc
Thread | Permalink
A:

I worked for Consumer Watchdog, but left in 2017 to pursue my own research. This is my passion and I'm lucky to do something I love.


Q:

Were there more government agencies doing this kind of research in the past? Is this a case of regulatory capture, or is it just something that the government has never prioritized? Have you noticed any changes to the EPA or FTC attention to these issues since the Trump Administration took power?

A:

There was more interest by prior administrations, but not much. Obama started a "Gas price fixing task force" when prices reached near $5, but the task force was never heard from again after the initial press conference.

One thing to remember is that oil is almost always not competitive. Every market in the world has someone with some control - whether it is OPEC, a Nationalized oil company, or a private company with too much market power. Many who understand oil seem to have 'accepted' that it's easy to manipulate regional prices.


Q:

I agree thank you. Now I have u/st999 to back me up next Christmas.

A:

Great does that mean I'm invited?


Q:

Is this just more undercover work?

Don't worry I'll keep quiet

A:

Haha no............


Q:

Is Standard Oil still a thing?

A:

Actually yes - Chevron still owns one "Standard oil" station in each place they operate. It's surreal seeing the station, see the photo at this blog (not my blog): https://thesledgehammer.wordpress.com/2009/02/18/a-not-so-standard-chevron-station/

They do this to retain the trademark. Chevron is the remnant of Standard Oil that was based in California.


Q:

Very Interesting

A:

When Standard Oil was split up, Exxon was Standard Oil of New Jersey, and Mobil was Standard of New York.

Of course now the companies have 'remerged'


Q:

Have you ever done any research in Kentucky? If so what did you discover?

A:

I haven't specifically researched Kentucky - but have noticed their prices are usually on the lower end of the spectrum. Gulf coast has solid competition and thus low prices. The closer you get to the MidWest, the more funky things get. The US West Coast is bar far the most impacted market.


Q:

Hi - extremely interesting AmA. I am curious if you could elaborate on what you mean by “The closer you get to the MidWest, the more funky things get”. I live in Minnesota and am wondering how price fixing in the oil industry impacts the upper midwest.

A:

I should have been more specific. One of the places with very strange pricing patterns is Chicago - emanating from there, there is clearly a market competition problem.

I should give an overview on the US markets:

US West Coast is extremely volatile & has too few companies, leading to very high prices.

US Gulf Coast Many companies, and a lot of extra gasoline/oil lying around. Prices are low here.

US MidWest Market power problems similar to US West Coast, but only in major cities, especially Chicago. The most reports I receive outside of California of suspicious prices are from Chicago.

Atlantic Coast Similar to the US West Coast, but to a lesser degree. Companies use the same arguments about environmental regulations causing higher prices as they do in California. The further North along the Atlantic Coast, usually the worse prices get.

There is an unverified, yet eternally interesting correlation between state political lean and gasoline prices.


Q:

Got to ask because of your unique and informed perspective, where can we expect the price of oil to go in the near future?

A:

I try not to speculate on oil prices. I'd say most economists don't realize that oil is in more financial danger than they admit - which is one reason why companies manipulate prices. If law enforcement were to crack down, the industry would be hard pressed not to reshape significantly.


Q:

How are gas prices not affected at all by the plummeting price of oil?

A:

They are usually - but I find not enough. The saying goes "rise like a rocket, fall like a feather", which refers to how gasoline markets jump at any sign of trouble, but are very resistant to pressures that would lower the price of gasoline.

You've hit on a crucial part of my analysis.


Q:

Did you track the tankers from China and/or Russia delivering oil to North Korea?

A:

No - I focus on private companies trying to manipulate prices. The China/NK oil shipment analysis is probably done by governments that are trying to maintain an effective embargo. Basically any ship that arrives in NK is suspicious - and they can pretty easily see where it came from, and where it picked up the oil.


Q:

In your opinion,does the fact that states receive tax revenue based on oil price make them stay hands-off? Why bite the hand that feeds them, after all.

A:

I think it has more to do with the political power of the oil industry- either you don't want to make big oil angry, or you're already against them for climate change and don't need to attack them anymore.

There's a secondary issue within the environmental movement - many think high oil prices are good because it will force people toward clean energy. I think that is a harmful way of thinking that essentially only hurts poor people who won't be able to switch to an electric cars.

In conservative states, absolutely tax revenue and blind faith in the oil industry is a reason there is little oversight.


Q:

Have you considered branching out to look at price manipulation and fixing in other commodities markets? In the 90's, ADM was fined millions of dollars for price fixing in the Corn Syrup and Lysine markets. The insider who blew the whistle on that price fixing alleged that such fixing was endemic across the entire agricultural commodities field but the larger allegations were never investigated.

How common to you think price fixing is within the oil industry?

A:

I have thought about it - as far as why I focus on oil, it's bar far the most important commodity. The Lysine price-fixing situation is a good example: a huge story and prices were probably inflated about $250 million. Americans consumed 391 million gallons per day. An increase in gasoline prices by 5 cents across the nation amounts to $20 million per day, or $7 billion per year. I would say price fixing is extremely common, and is done as routine business.


Q:

Hi Cody, fist off, I'd like to thank you for exposing those shitty companies. Do you believe that government officials in the middle east are acting unethically in regards to exporting oil?

A:

Also, it's a good example of regulators not stopping mergers - Enron was a merger of the two of the largest natural gas pipeline companies already in existence.

Fun fact: when they merged, they settled on the name Enteron, not realizing until after an embarrassing announcement that Enteron was a medical word for the digestive tract reaching from the mouth to the anus – made especially embarrassing since it was a natural gas pipeline company. They changed the name to Enron. (learned this in Kurt Eichenwald's book Conspiracy of Fools: A True Story)