I can’t figure out anymore why futures keep going up. Futures go up because of tensions with Iran, futures go up when we discover Iran is bluffing in the stupidest way. I don’t think there is rhyme or reason to it anymore.
Perhaps inflation is thought to be even more important than the Iranian situation?
If nobody attacks Iran's nuclear program, Iran will get nukes and use them - and oil will be going up like a rocket the entire time. Along the way, Arab oil money will buy the entire modern west and we will all have the choice of working for them forever, or trashing capitalism to take it back.
Okay, let's say I own some oil. I can sell it or hold it.
If I sell it now, I get cash. If I hold it, I get cash at the future price of oil when I sell it (and there's lots of new customers demanding oil) so I hold it. Supply and demand sends the price up.
Now, do I think I can do better with cash and the interest it gains and hold, or do I think oil will rise in price more and sell?
That's the simplistic view.
If there was commitment and the will to drill offshore Florida and California, develop Utah and North Dakota, ANWR and others, maybe just the threat would lessen my desire to hold onto the oil, and the price would drop IMMEDIATELY, because the futures price would drop!
The rats tell us we can't drill out of this problem. Well, we don't have to.
The downside is that the desire and will aren't there. Congress and this president have sold us down the river, much to the oil companies joy. Sorry, there just isn't room to blame the rats for this, because the pubs had both sides of congress and the white house for years and accomplished nada in terms of our energy self-sufficiency.
The rats have suckled up to the environs, who are funded by the members of the boards of the oil companies.
And... we work all week to pay them for this. Enjoy, here it comes...
Start shorting it, then, man! There's piles of money to be made!!!
(if you're right)