"We now return you to your regularly scheduled programming..."
Posted on 04/20/2006 1:17:48 PM PDT by NYer
Well glad to see folks are catching on.. been trying to tell people for at least 6 months that energy futures traders are raping em... but the "market is god" types just kept shouting me down.
Of course, but that the author stated that less use by refineries is causing prices to rise, among other things. That doesn't make sense.
Yea, its supply and demand... supply is so high we can't even store it, and demand is dropping and the price keeps going up... yea, that's classic supply and demand... NOT.
Its called futures trading profiteering, pure and simple. Only difference between whats going on now in the oil futures market and what was going on with tech stocks in 99 is that Oil is an inelastic product.
These folks who think markets are not manipulated or incapable of being influenced or manipulated by forces beyond "supply and demand" and are free from corruption are just abject fools.
The simple approach would be to raise margin requirements thereby increasing the cost and risk of commodities and futures speculation.
When was the last time a company netted 34,000,000,000 ?
Answer: Never.
BTTT
It's not so much the hedge funds. A speculator who buys futures because he thinks prices are going to rise is not doing anything wrong... if he turns out to have been wrong, and prices did not go up, then he is going to lose money.
The problem is that the run up in commodity prices caused by real demand has resulted in Wall Street introducing all sorts of commodity index products that people are pouring money into. These funds have to buy futures, because that is there mandate... it is in essence a bubble just like the internet in 1999.
Sure, unfortunately they are oil investors, or shills.
Because they are not keeping up the same income levels. Charge more to make up for what you are not getting. Remember a few years ago when the gasoline usage dropped over several months because of high prices -- less fuel usage threatens their profit projections, regardless of fuel availability.
There is an even simpler approach: start shorting crude oil futures.
This price is, from a supply/demand curve, completely nuts--as are beliefs that we're going to go to war with Iran any time in the next 3-5 years.
So, in short, it is a speculative bubble, and one that is overdue to be popped.
Remember that in shorting oil, Soros' pain is your gain!
"We now return you to your regularly scheduled programming..."
Total B$, or were you not around when the OPEC Cartel was established?
These embargo's used to be considered acts of war. But the mandated control
of production let US refineries raise their prices. They loved it.
pssst...Have you not heard on this board that capitalists are incapable of greed..no collusion..all legal like.
Collusion? There's no collusion! You don't sound very happy that gas is $3+ per gallon! I'm sorry, that means you are a commie. I mean, come one, you can choose not to buy gas. Unless you want to have a job or buy anything that was treansported.
But it is a totally free market. The industry shills here repeat it like a mantra, so it must be true.
Yeah, we should just give up. Shouting will never cure a terminal case of economic ignorance.
I've tried it on Democrats and it doesn't work on them either.
Of course it doesn't. The energy sector is nuts most of the time, and it is getting nuttier now.
I would love to see where the spec money is coming from.
Mysterio was being sarcastic.
That theory is spot on when prices are rising. But I, and I'd bet one or two other people, notice that the theory breaks
down somewhat, when replacement costs go down...
Guess those pricing people don't understand the art of pricing. Then again, maybe they do.
"...Why would an oversupply result in crude prices going up?..."
Price gouging by those involved.
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