Thank you SAJ for the rational and succinct explanation of this current oil “crisis”. One thing that I have learned in my middle-aged life is this: If you do not understand what is happening in our economy and our government - then try to follow the money. This will usually explain many things.
There is no doubt that as soon as these speculators like GS have extracted their pound of flesh, they will turn around and short oil and the price will drop as if by magic. They will push the price right up to the amount of extreme pain on the public. It’s pathetic that GS continues to publish their $200/barrel estimate all in order to keep the price going up.
I wonder if you have heard that the Saudi’s are sending quite a few billions of oil to us in June? Somewhere I saw a reference to that. Also that Iran is sitting on billions of barrels that they can’t sell due to lack of heavy sour crude refining capacity?
Thanks.
The notion, however, that anyone with a pile of capital can jump in and distort a mkt, or several mkts, for months and/or years simply because they have more capital than is usual for said mkts (and physical mkts are ALWAYS of a finite size, of course), with no fear of immediate retribution, is simply abhorrent to me.
Oh, many of them will indeed pay the piper, in future. Always happens; mkts simply do not rise this quickly and STAY at these levels. In the meantime, though, these 'traders' -- and what they really are is manipulators -- will wreak considerable pain on the citizenry and the economy.
The fact that goobermint hasn't reined them in already, by which means I outlined in the post to which you replied, is -- unfortunately -- very telling.
Call me an idealist, but, in the meantime, FReegards to you!