Evil Oil Speculators

Trading Frenzy Adding to Rise in Price of Oil

Q

http://www.nytimes.com/2006/04/29/business/29traders.html?_r=2&pagewanted=2

"The oil market has been driven by speculators, by hedge funds, by pension funds and by commodity indexes, but the fact of the matter is that it's mostly been driven by the fundamentals," said Craig Pennington, the director of the global energy group at Schroders in London. "Prices are supported by the fact that there is no spare capacity."

... ... ...

In the end, supply and demand call the tune.

"The idea that speculators can systematically push the price up or down is wrong," said Robert J. Weiner, a professor of international business at George Washington University and a fellow at Resources for the Future, a nonpartisan think tank. "But they can make it more volatile. They can't raise water levels but they can create waves."

UQ
 
Quote from oldtime:

If I knew back then what I know today...
More...

If anyone knew in the past what they know in the present, then everyone could make billions at anything.

Quote from oldtime:

there's a very good story about an NYSE specialist in one of those old stock trading books.

He just showed up at his post for a normal days work and there were all these sell orders. It was his job to buy to maintain an orderly market so he opened 10 points below the previous days close because that was all he could afford.

Well, apparently it was just a freak deal and the stock closed 1 1/4 higher. He made a lot of of money that day but they fined him 160K (which was a lot of money back then.)

His response was, "Yeah, but what would you do to me if it went lower?"
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Exactly, they wouldn't have batted an eye...
 
Quote from rknas:

Well it's the same with any instrument. Who uses directly what they trade?
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True but if you are looking at a true hedger who actually owns the instrument or in this case commodity; for example farmers, airlines, etc., than these traders do directly use the commodity they trade.
 
Quote from riskbiscuit:

True but if you are looking at a true hedger who actually owns the instrument or in this case commodity; for example farmers, airlines, etc., than these traders do directly use the commodity they trade.
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yeah, but who is going to buy from or sell to them?

We already went through this in the 1600's in England. Wheat would go sky high in January. Nobody could afford bread. Everybody planted wheat, and then in July, there was so much of it the millers wouldn't even pay you enough to cover the cost of what it cost to plant and harvest it.

The speculators stepped in and accepted the risk and made a living by screwing both the farmer and the miller. Nice work if you can get it.

otherwise, there was a very good CNBC 60 Minutes called "Foriegn Intrigue". I'm sure they will re broadcast it. Check it out. They make a very good case for the 2008 spike due to GS and Morgan Stanley. Also will make you think twice about peak oil. Leslie Stahl interviews the Saudi Oil Minister. I like to keep an open mind.

BTW who that owns AAPL or SPY really wants to quit their job and run the company? Most just hope to buy low and sell high.

I think what is really lost in all of this is, that for every buyer there is a seller. How can I bid the price up unless someone is willing to take the other side?
 
Speculators are the worst kind of species.

They are the purest evil and the backbone of capitalism, also the reason why one day the whole system will blow up.

And i am one of them.

We give a fuck about everything else, but making money.

Fucking politics want more taxes from us, fuck them, we just make more money or move to another country.

Money rules the world, not politicans.

:cool: :cool: :cool:

BTW, oil is going down to at least 108,00 in the next 2 months, the Brent oil i mean. The Brent is my friend.
 
The Role of Speculation in Oil Markets:
What Have We Learned So Far?

http://www-personal.umich.edu/~lkilian/milan030612.pdf

"

March 18, 2012

Abstract: A popular view is that the surge in the price of oil during 2003-08 cannot be explained by economic fundamentals, but was caused by the increased financialization of oil futures markets, which in turn allowed speculation to become a major determinant of the spot price of oil. This interpretation has been driving policy efforts to regulate oil futures markets. This survey reviews the evidence supporting this view. We identify six strands in the literature corresponding to different empirical methodologies and discuss to what extent each approach sheds light on the role of speculation. We find that the existing evidence is not supportive of an important role of speculation in driving the spot price of oil after 2003. Instead, there is strong evidence that the co-movement between spot and futures prices reflects common economic fundamentals rather than the financialization of oil futures markets.

"
 
All they would have to do is raise margin requirements tremendously and poof there goes the many small "speculators" along with volume and commissions the brokers/exchanges have enjoyed the past few years.

Unless the gov't forces this to happen in an unconstitutional manner it probably won't happen.

But then again look at silver margins. High as hell yet the price is still very high compared to the past 10 years. It's a function of easy money policy by central planners. It's also a very thin market meaning higher volatility because the margins are so high and not enough people taking the other side. Media pointing fingers at wrong people as usual.

Nobody was bitching about speculators when their 401ks shot through the roof in the 90s equities run up.

Just my two cents.
 
No Government can complain about high oil prices when they tax it so much.

Tax I think is around 60%-70% per litre over most of Europe.
 
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