This article is from yesterday, but I have been this for years, its time to stop speculating on oil, the reason we have oil at $100+ is because of speculation, it has absolutely nothing to do with supply and demand. Regulators don't give a fuck about whats going on, they continue to let the market do what ever it wants to do, speculation is easily adding $50+ to the price of oil!!!! You want oil to collapse, take the speculation out of the market!!
Algorithms, Not Demand, Driving Oil Prices Sky High?
Published: Thursday, 7 Apr 2011 | 5:32 PM ET
Text Size
By: Lee Brodie
Producer
If crude oil's [CLCV1 111.88 1.58 (+1.43%) ] relentless march higher leaves you shaking your head, youâre not alone.
Analyst David Greenberg of Greenberg Capital thinks the moves are about more than supply and demand. Much more.
In a live interview on CNBCâs Fast Money he says âoil is $20-$25 too high. The $80 range is fair.â
LIGHT CRUDE MAY1
(CLCV1)
111.86 1.56 (+1.41%%)
New York Mercantile Exchange
Although oil probably deserves some premium because of Mideast unrest he says the fact of the matter is, markets have not experienced significant supply disruptions. And he adds that even during the Gulf War âwe didnât see a spike like this.â
If supply and demand arenât moving the oil markets, then what is?
According to Greenberg, âThe speculators have taken control of the market and itâs now out of control.â
Itâs a complicated issue but essentially he thinks that electronic trading has infused the oil market with more money than it can handle. âSo itâs very easy for any fund that needs a position to go one way or another, to slam it with algorithms. Thatâs whatâs moving the markets,â he says.
Thatâs a bold and somewhat controversial call; and one thatâs likely to draw a lot more attention especially after crude oil closed above $110 on Thursday, a level widely considered problematic for the stock market.
And so there's no confusion, Greenberg does not think speculators alone are driving oil. "Of course there are fundamentals at play," he says. "The problem is that it's not just fundamentals at play."
"And when you have fundamentals on the same side as the specs, when that happens it makes it even easier for them to move the market."
Greenberg also tells us that he went to Washington years ago and warned lawmakers of these kinds of issues but to date regulators have failed to provide the degree of oversight necessary to prevent it from happening.
What do you think? We want to know!
Do you think electronic trading is largely behind oil's march higher?
Yes, it's price manipulation.
88%
No, like it or not, fundamentals for crude are very bullish.
12%
Total Votes: 2627
Not a Scientific Survey
Results may not total 100% due to rounding
Algorithms, Not Demand, Driving Oil Prices Sky High?
Published: Thursday, 7 Apr 2011 | 5:32 PM ET
Text Size
By: Lee Brodie
Producer
If crude oil's [CLCV1 111.88 1.58 (+1.43%) ] relentless march higher leaves you shaking your head, youâre not alone.
Analyst David Greenberg of Greenberg Capital thinks the moves are about more than supply and demand. Much more.
In a live interview on CNBCâs Fast Money he says âoil is $20-$25 too high. The $80 range is fair.â
LIGHT CRUDE MAY1
(CLCV1)
111.86 1.56 (+1.41%%)
New York Mercantile Exchange
Although oil probably deserves some premium because of Mideast unrest he says the fact of the matter is, markets have not experienced significant supply disruptions. And he adds that even during the Gulf War âwe didnât see a spike like this.â
If supply and demand arenât moving the oil markets, then what is?
According to Greenberg, âThe speculators have taken control of the market and itâs now out of control.â
Itâs a complicated issue but essentially he thinks that electronic trading has infused the oil market with more money than it can handle. âSo itâs very easy for any fund that needs a position to go one way or another, to slam it with algorithms. Thatâs whatâs moving the markets,â he says.
Thatâs a bold and somewhat controversial call; and one thatâs likely to draw a lot more attention especially after crude oil closed above $110 on Thursday, a level widely considered problematic for the stock market.
And so there's no confusion, Greenberg does not think speculators alone are driving oil. "Of course there are fundamentals at play," he says. "The problem is that it's not just fundamentals at play."
"And when you have fundamentals on the same side as the specs, when that happens it makes it even easier for them to move the market."
Greenberg also tells us that he went to Washington years ago and warned lawmakers of these kinds of issues but to date regulators have failed to provide the degree of oversight necessary to prevent it from happening.
What do you think? We want to know!
Do you think electronic trading is largely behind oil's march higher?
Yes, it's price manipulation.
88%
No, like it or not, fundamentals for crude are very bullish.
12%
Total Votes: 2627
Not a Scientific Survey
Results may not total 100% due to rounding
