Agreed. A big part was devaluation and turmoil. Another part was leverage.
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CFTC Report Blames Speculators For Oil Price Swings: Duh
- Thread starter ByLoSellHi
- Start date
Agreed. A big part was devaluation and turmoil. Another part was leverage.
Quote from achilles28:
It was long-dated speculative funds, tho. Not day-traders.
Day-trader impact on open interest (EOD @ Cash) is net neutral.
Mostly hedge funds, commercials, investment banks that bought and held long.
Especially Goldman Sachs through their tracker produtcs solutions worldwide. See here for example :
http://www.goldman-sachs.de/default/default/default/
Its not easy to manipulate the equilibrium price of liquid markets, look how the fed's efforts to drive treasuries higher endup, as soon as the printing press stops the market does whatever it wants
$147 oil happened not because of 'speculators' affecting real players it happened because EVERYONE became an speculator, tankers weren't offloading to sell at higher prices, buyers would jump at rumors of nigeria disruption etc, people's psychology changed for a while, that included most players not just ETFs, it was a mini bubble. If you think the CFTC can stop bubbles you are kidding yourself
$147 oil happened not because of 'speculators' affecting real players it happened because EVERYONE became an speculator, tankers weren't offloading to sell at higher prices, buyers would jump at rumors of nigeria disruption etc, people's psychology changed for a while, that included most players not just ETFs, it was a mini bubble. If you think the CFTC can stop bubbles you are kidding yourself
It occurs to me that these index funds would have pushed up other commodities too!
http://hsgac.senate.gov/public/inde...aring_id=26f85374-c43a-4e2a-ac16-b64a40ca263a
http://hsgac.senate.gov/public/inde...aring_id=26f85374-c43a-4e2a-ac16-b64a40ca263a
When you build an economy so dependent on an externally sourced commodity - and then run a fiscal policy written on the wrong side of the Looking Glass - you have to expect bad things to happen from time to time. I don't think there is anything WRT trading regulations that can be done about it.
Apart from that, for what it does, oil is nearly free, even at $150/bbl. Nothing in the past 100 years has changed our lives more than harvesting this near-miraculous energy store.
Apart from that, for what it does, oil is nearly free, even at $150/bbl. Nothing in the past 100 years has changed our lives more than harvesting this near-miraculous energy store.
The crude spike has to be caused by speculators, right? Why else could it go so high? And Goldman Sachs must be involved, because they always are.
http://www.eia.doe.gov/oil_gas/petroleum/info_glance/petroleum.html
Scroll to the bottom and follow the "World Oil Balance" link under International Data. On the spreadsheet note that Total Oil Demand was higher than Total Oil Supply for the first two quarters of 2008, as it had been for 2006 and 2007.
The crude oil market was trying to find a "market clearing" price, crude has only dropped so much because demand dried up thanks to the global financial crisis.
If everyone in the world preferred high priced oil (like they do stocks) you people would be blaming speculators for the precipitous drop in crude prices. A market does what you want, you think good, a market moves the opposite way you blame Goldman and the evil speculators.
The fact is that the world cannot bring any more crude to market quickly, all the crude that is easy to find has been found. If the economy turns around, crude is going to easily top the recent highs, no matter what trading limits you put on specs or Goldman.
5yr
http://www.eia.doe.gov/oil_gas/petroleum/info_glance/petroleum.html
Scroll to the bottom and follow the "World Oil Balance" link under International Data. On the spreadsheet note that Total Oil Demand was higher than Total Oil Supply for the first two quarters of 2008, as it had been for 2006 and 2007.
The crude oil market was trying to find a "market clearing" price, crude has only dropped so much because demand dried up thanks to the global financial crisis.
If everyone in the world preferred high priced oil (like they do stocks) you people would be blaming speculators for the precipitous drop in crude prices. A market does what you want, you think good, a market moves the opposite way you blame Goldman and the evil speculators.
The fact is that the world cannot bring any more crude to market quickly, all the crude that is easy to find has been found. If the economy turns around, crude is going to easily top the recent highs, no matter what trading limits you put on specs or Goldman.
5yr
Gotta' love all these overly complex responses justifying high crude oil prices.
Common sense rules.
Manipulators were tying up physical oil, without having to take delivery, through the use of options and other devices, using leverage, ensuring such oil would not be delivered.
That's all anyone with a shred of rationality needs to know in order to conclude these parties, and not supply & demand, drove crude oil prices higher.
Quit trying to deceive.
Common sense rules.
Manipulators were tying up physical oil, without having to take delivery, through the use of options and other devices, using leverage, ensuring such oil would not be delivered.
That's all anyone with a shred of rationality needs to know in order to conclude these parties, and not supply & demand, drove crude oil prices higher.
Quit trying to deceive.
Quote from Daal:
Its not easy to manipulate the equilibrium price of liquid markets, look how the fed's efforts to drive treasuries higher endup, as soon as the printing press stops the market does whatever it wants
$147 oil happened not because of 'speculators' affecting real players it happened because EVERYONE became an speculator, tankers weren't offloading to sell at higher prices, buyers would jump at rumors of nigeria disruption etc, people's psychology changed for a while, that included most players not just ETFs, it was a mini bubble. If you think the CFTC can stop bubbles you are kidding yourself
That's my point. American consumer real estate is a 10 Trillion dollar industry. Yet, we just had a bubble in one of the largest markets in the world. The problem is leverage inherent in a banking system that creates mountains of it in a pen stroke. This campaign to scapegoat "reckless speculators" is more a political one, than anything else. Curbing speculation without changing the fundamental nature in the way money is made, does nothing to prevent the creation of future bubbles --- except ensure fewer players at the table when it does. This is a Banker-funded witch-hunt to demonize retailers and small-time "speculators" to consolidate access and liquidity for the next bubble they blow. They want it all. And they don't want any outsiders helping themselves to "their" lunch.
I'm all for honest banking. A complete destruction of the fractional reserve system. But as long as we've got it, equal access for everyone. Both large and small. The system is already designed to give a massive edge to large banks and Wallstreet. Now, they want to limit what little access and tools we've got to make a buck at what they see as "their game".
Fuck them. They don't own the markets. This is like the FED Transparency Bill. They think they own the Country. Well, in some respects, they do. Not legitimately, anyway....
Quote from ByLoSellHi:
Gotta' love all these overly complex responses justifying high crude oil prices.
Common sense rules.
Manipulators were tying up physical oil, without having to take delivery, through the use of options and other devices, using leverage, ensuring such oil would not be delivered.
That's all anyone with a shred of rationality needs to know in order to conclude these parties, and not supply & demand, drove crude oil prices higher.
Quit trying to deceive.
Overly complex reasons like demand outpacing supply?
Or overly complex reasons like some sort of conspiracy lead by traders, investment banks, pension funds and the general public (by the way of ETFs) in which they all bought futures contracts at "bubble prices" and then bought up all the available crude (even though middle eastern countries control the supply) in a huge market corner?
5yr
Quote from 5yrtrader:
Overly complex reasons like demand outpacing supply?
Or overly complex reasons like some sort of conspiracy lead by traders, investment banks, pension funds and the general public (by the way of ETFs) in which they all bought futures contracts at "bubble prices" and then bought up all the available crude (even though middle eastern countries control the supply) in a huge market corner?
5yr
The world was awash in oil as oil kept climbing higher and higher.
They were literally running out of places to store it when it was near its $148 peak.
Demand was up during the boom years, but nowhere near enough to justify oil prices of more than $65 a barrel or so, tops.