I disagree to some point there - over 70 percent of oil futures contracts in 2008 were held by speculators - defined as being neither a producer or end consumer (such as a refinery).
And with investment banks such as Goldman not being subject to position limits, price pressure was built over several months by investors scrambling to get in on the returns - and then Goldman got the suckers lined up and profited by shorting the downside as well.
And I sense that happening again, we are hearing the same kind of claims that we heard in 2008 about spiralling Asian demand that really was never there - even as US gasoline usage is tanking.
But this can only happen if supply is tight and the perception is in place that nothing is being done to drive future increases in supply. Obama satisifies that requirement to a 'T'.
I can’t fault you there. I can only point out that there IS a downside and GS played both sides of the street. Hard to blame them really, sheep get sheared. That’s the way it’s always been.
But you also note that Obeyme is the trick to make it work - his policies help create the tight supply or at least the perception thereof that drive the sheep to shears. Take that away (God please) and it will be interesting to see how far down the market goes.