Study blames speculation for oil's rise

LadyT

LadyT

JPP Modarater
Contributor
http://money.cnn.com/2008/09/10/news/economy/oil.ap/index.htm?cnn=yes

Michael Masters of Masters Capital Management, which did the study, said the flow of money - not major changes in supply and demand - caused the volatile movement of oil prices. The report was released Wednesday by Senate and House sponsors of bills to put additional curbs on oil market speculation


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I've said said this before. Even if we do start to drill more in the US, we're still not insulated from Market swings, which clearly have a substantial effect on oil prices.
 
But wait unrestrained capitalism is supposed to take care of us?

Oh yeah, thats right , The market takes care of itself not us.
 
Desh said:
But wait unrestrained capitalism is supposed to take care of us?

Oh yeah, thats right , The market takes care of itself not us.
Click to expand...

Seriously. The same way it takes care of lead paint in childrens toys.
 
of course it's due to speculation. Fascists denying this the whole time just look retarded. ALL our prices are determined by the market, which is full of speculators who determine every price of everything. With commodities that is.
 
Rebublicans trying to win the presidency ?

If you will recall I said specualtion was the main cause of the rise and predicted the price would drop some for the election.

I just keep getting proven correct.
eat dirt gerbils.
 
LadyT said:
http://money.cnn.com/2008/09/10/news/economy/oil.ap/index.htm?cnn=yes

Michael Masters of Masters Capital Management, which did the study, said the flow of money - not major changes in supply and demand - caused the volatile movement of oil prices. The report was released Wednesday by Senate and House sponsors of bills to put additional curbs on oil market speculation


__________________________________________

I've said said this before. Even if we do start to drill more in the US, we're still not insulated from Market swings, which clearly have a substantial effect on oil prices.
Click to expand...

That is true. You will always have speculation. It is an inherent part of the market. You have it on stocks, bonds and commodities. It will always be there.

What additional drilling will do is turn speculation bearish vs. bullish. (As any potential increase in supply or decrease in demand will do) Look at what has occurred in the past couple of months. From $148 brl down to the current $102. Demand has decreased as people have tightened their belts. But did it decrease by over 30%???

No, it didn't. The decrease was led by four factors....

1) an increase in the dollars valuation
2) a decrease in worldwide demand
3) an increase in potential supply (via talks of increasing drilling)
4) an increase in potentail usage/development of alt energy sources which would reduce demand

Any one of the four can change the way speculators move... right now... ALL four are bearish for the price of oil... which is why we have seen such a drastic fall in prices.
 
Desh said:
But wait unrestrained capitalism is supposed to take care of us?

Oh yeah, thats right , The market takes care of itself not us.
Click to expand...

Tell us Desh... What is it that has caused oil prices to go from $148 to $102?????

There have been no new regulations.
 
What increased the decrease in oil demand in the USA was the high price pure and simple. No great green movement or anything like that. High prices and less money in most consumers pockets to spend.
 
Desh said:
And the fact that Americans are figuring out why its going up.
Click to expand...

It was going up because....

1) The dollar declined in value
2) The worldwide demand was increasing too fast and outstripping supply
3) The US continually refusing to drill its own resources
4) The US (and much of the rest of the world) not doing enough in alt energy

When all four are bullish for the price of oil... you bet people will expect future prices to continue up and thus invest to hedge their investments against rising oil.

But what happens when they all turn bearish on oil prices???
 
Superfreak said:
Tell us Desh... What is it that has caused oil prices to go from $148 to $102?????

There have been no new regulations.
Click to expand...

"Since then, investors have withdrawn $39 billion from those same markets as prices have retreated."
 
The fact is our oil market is beholden to large instutional market speculators. Obviously supply/demand and currencies have a role in that. The point is that regardless of supply of demand speculation was the main driver of the more than 50% increase in oil prices. drilling off our shores will not insulate us from such volatility.
 
Topspin said:
simpletons look for studies to give them talking points.
Talk about a drop in the bucket
Click to expand...

No its more like simpletons dont listen to people who have more knowledge of a sector than themselfs and call everyone stupid to make themselves feel smart.
 
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