[Outcast_Searcher]

The "it's all evil speculators" is generally the premise from the political left, which don't believe in free markets.

There is an entire book on this premise from a supposed professional oil trader called "Oil's Endless Bid". In the preface, it became very clear that this guy is a whiny leftist who totally dismisses that concepts like Chindia demand have ANY impact on the price of oil. He thinks ALL the rise in prices from the good old days when oil was stable at around $20.00 a barrel is from "evil" investors using things like oil ETF's.

That's absolutely ludicrous. The guy is an idiot. And yet, the left will love him because he pushes their premise -- just as much as the GOP loves anyone who says we MUST spend endless money on defense AND not raise taxes AND that the GOP is the party of fiscal responsibility. (Speaking of idiocy and a ludicrous position).

OTOH, I have no problem with the concept that in the SHORT run, oil prices likely get distorted somewhat by large investment houses making large bets (perhaps frontrunning wealthy clients).

So what? ALL markets can be chaotic in the short term. ALL prices may be "wrong" in the short term due to influence by large players.

Over time though, it will all average out. Whining about it and calling people evil won't change the basic global dynamics. In time, changing technology, supply and demand, and the global economy's health will be the big factors determining the price of oil. (Speculators of all stripes will ALWAYS be making bets, based on their perception of what those factors will look like at VARIOUS POINTS IN THE FUTURE).

Good luck predicting THOSE global factors accurately over time - epsecially the short term -- after all, they're at the root of what most of the arguments (er discussions) on this site are all about.

[Quinny]

The left love him?? Don't be such a cock!

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', 'Y')ou like to politicize every conversation here at PO.com. it is tiring, non-productive, and constructive people ignore you. This time you have gone off the deep end.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', '
')HELP! MY MIND IS CRACKING. YAARRRGGGGH!

[John_A]

$this->bbcode_second_pass_quote('pstarr', '
')It should be very clear that there are clueless idiots, left and right. In fact the vast majority of Americans are clueless idiots regarding energy and its role in politics and world affairs. Most people believe economic growth is possible in a declining energy environment. Most people don't understand planetary limits.

[kildred590]

$this->bbcode_second_pass_quote('', 'N')ope. No illusion at all. A futures contract is only delivered physically once. Where a new contract is issued, old ones expire and are delivered. You could *possibly* argue, that at the beginning of time, there was a one time increased demand when the first futures contracts in the history of the world were issued and bid; but since then. Nahh.

[peripato]

You surely know we are in the shit whenever some wing-nut who has the public ear, starts talking about speculators as the cause of all our woes. So, for the simpletons, asshats, urgers and other assorted trolls who trot out this crap every other week;

There’s no doubt that speculators can make huge profits during a crisis, but speculation is a symptom of that crisis, not the cause. The crisis in this case being that the oil supply has not f*%ken grown since 2005, but population and demand for it, even in the midst of the worst economic downturn for generations, has.

Also, it is never explained by those who blame speculators for higher prices in oil, or some other commodity, why speculation, when these markets are tanking, isn't an issue, yet is suddenly again, whenever it's the equity markets' turn to take a swan dive into an empty pond. Neither do they seem to understand, explain or realise that speculation is perfectly normal and provides the liquidity that allows hedgers (the overwhelming majority) to enter and exit contracts whenever they choose, with a minimum of slippage.

Truth is that traders do not give a rat's arse which way the market in a given instrument is trending, as long as they can hop on that trend and profit from it. A crisis is as good an opportunity to do that as any. Got it?

[Pops]

$this->bbcode_second_pass_quote('peripato', 'T')here’s no doubt that speculators can make huge profits during a crisis, but speculation is a symptom of that crisis, not the cause.

[basil_hayden]

You make speculation sound like Teh Evul yet I'm sure your retirement investment plan* is based upon that very speculation. How do you think ends are still meeting in a situation where resource availability is declining?
Simple: you'll pay more for less, until there isn't any or you'll do without.

It's like the chart Pops posted elsewhere regarding the amount and type of government services that people use and are simultaneously against. How disconnected can the public possibly be?

*Disclosure: Not in the stupid monkey game where they take your money and make a bunch for themselves then give a little to you as a stipend when you're long of tooth.

[peeker01]

Well, I feel like we are making some progress. All three of you admit that obscene profits
are being generated by oil futures traders. To do so, price movement has to occur, either up or
down. That's where the problem is.

When Goldman makes the public pronouncement that oil will be 200 by next summer, price seems
to go in their direction. When they say it has overheated and they call a top, like magic,
prices descend. The entire price excursion in 2008, from 50, to 147 and back to 50, happened
while demand was substantially the same. Sure demand was increasing, an yes, OPEC was
doing as instructed, making supply slightly more than demand. But not to this extent. Consumers
pay the price on the way up, unsophisticated investors pay on the way down.

I take no solace in the fact that my 401K benefits from Goldman's manipulation of oil markets,
anymore than I appreciate their manipulation of the mortgage markets. Enron was doing the exact
same thing with the electricity market in California when it hit 1000/MW. We all know what
happened to Enron.

[peeker01]

Here is an article about Goldman's manipulation of the most recent bubble.

http://www.heatingoil.com/blog/goldman- ... fall-0412/

[AgentR11]

I really like that picture, but it looks like the plane of the naval officer's back is behind the gunwale of the boat. But it is kinda neat in that you can put yourself in the place of any of the occupants, and the scene makes sense, full of people being who they be. And you can look at the image both as a cynic looking down on perhaps the wealthy woman, or the oarsmen, or the oblivious rabble at the bow; or you can take a benign view with the serenity of the wealthy woman, the honorable labor of the oarsmen, the attentive concern of the officer, and the joy of the party up front.

People can be together in the same boat, and still not be mindless clones of one another, nor enemy either.

++

[kublikhan]

$this->bbcode_second_pass_quote('peeker01', 'W')hen Goldman makes the public pronouncement that oil will be 200 by next summer, price seems
to go in their direction. When they say it has overheated and they call a top, like magic,
prices descend. The entire price excursion in 2008, from 50, to 147 and back to 50, happened
while demand was substantially the same

[Pops]

$this->bbcode_second_pass_quote('peeker01', 'T')hat's where the problem is.