B.S. there are thousands bidding for that barrel of oil because there is a huge demand for it. Tell me, where are all of the full storage tanks? Speculators are a good thing to have. The futures allow managers to plan for their coming budgets. Do you think the speculators just realized a few years ago that they could manipulate the price of oil? Get real.
I’m not arguing that all oil speculation is bad. I’m arguing that the rapid influx of long-term ‘investment’ speculators such as hedge funds into a market that is already extremely tight serves no purpose except to drive up the price of oil.
Because anytime there is a rapid influx of new buyers bidding for the same amount of goods... the price spikes.
And yes, eventually, the price will plummet if oil speculators sell en masse. The problem is that the institutional investment funds are not looking to eventually do so. They are viewing oil as the next gold, to keep as a long-term investment... and are, right now, trying to snap-up as much oil as possible, regardless.