Just curious. Did you read oceanview's ideas? I found them very interesting!
just check out some of the quotes here:
http://ogj.pennnet.com/Articles/Article_Display.cfm?Section=ARTCL&ARTICLE_ID=221823&VERSION_NUM=2&p=82
notably:
"Banks having established investment banking divisions with US energy trading operations include ABN AMRO Bank NV, Bank of America Corp., Barclays Bank PLC, Citigroup, Merrill Lynch, Deutsche Bank Group Inc., and UBS.
“Banks have increased their efforts to profit from energy by trading for their own account,” Josephson said. “The banks’ current enthusiasm for energy contrasts with the mid-1990s when several scaled down their activities as investors moved into equities.”
A growing number of pension funds are turning to commodities to diversify away from equities and bonds, he said. Meanwhile, hedge funds “will continue to have a voracious appetite for energy trading.”
Peter C. Fusaro, chairman of Global Change Associates Inc., a New York energy and environmental risk management consultancy, noted that the entrance of energy hedge funds into energy commodities trading started primarily in the US. But Canada now has energy hedge funds, and energy hedge fund activity in oil trading is expected during 2005 in Europe and Asia. Hedge funds have considerable influence over markets, he said (OGFJ, 4Q 2004, p. 21).
Fusaro said that he had identified close to 300 energy funds by late last year, and he believes the “true number is much higher.”
Traditional energy companies are either exiting the trading arena or are becoming further marginalized by the activities of the hedge funds and investment banks, he added"
Oil is the new "tech stock" - But nobody put a gun to our heads to buy Cisco at 80. This time around, we all need to buy energy, and these players are getting a piece of the action everytime we fill up our cars. That's not to say hedging in this market is unacceptable - companies like airlines and others, who consume oil and are sensitive to price changes, will hedge in this market and that perfectly legitimate. But its gone way beyond that now.
Until we bust these players, and return the oil market to an equilibrium where the participants are buyers who actually want to consume oil, and sellers who actually have oil they want to bring to market, prices will rise. $100/bbl oil is possible if the trend is not broken, its just money chasing money right now.