The speculation on oil prices is beating up supply-demand issues

Oil price boom is getting dangerous. Now the economies and consumers are seriously at risk. It is not only developing countries, but major economies are hit by this monstrous trend. In this article, I will place certain data from other sources and a testimony to scrutinize the issue.
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Will the supply increase solve our problem? According to Micheal Masters : “No”. He claims : “If OPEC supplies the markets with more oil, it will have little affect on Index Speculator demand for oil futures. If Americans reduce their demand through conservation measures like carpooling and using public transportation, it will have little affect on Institutional Investor demand for commodities futures.”

If the speculative side of the story is true, then most of the energy crisis discussions we are carrying out right now is partially relevant. I personally believe the peak production in oil and other energy resources are at least a decade away from us. However, the peak oil part of the story has also an effect on this.

If you are watching NYMEX futures closely like I do, you should have noticed the change in the futures price of crude oil for 19th May and 20th of May, just like Jeff Vail (http://www.jeffvail.net/). Generally the price of futures trading was lower than its present price. But for these two days, the prices looked like increasing in every futures contract.

This has started the discussion of whether the markets have been tipped about a peak oil production. If the production is peaked, then the futures prices should be increasing. And that is exactly what has happened. Currently the ambiguity looks like settled down. But the prices after 2013 are still higher that current prices.

Turkish Weekly