hey you morons that claimed specs had no impact, if you can read at all, read this. shmucks. Speculation Can Destabilize Oil Prices, CFTC Is Told Last update: 8/26/2011 3:14:08 PM By Ronald D. Orol WASHINGTON (Dow Jones) -- Financial activity in the futures market can significantly destabilize oil prices, a Belgium-based academic told the U.S. futures regulator on Friday as part of a debate the agency held as it weighs new rules. "In 2007 and 2008, destabilizing financial activity caused oil prices to respectively over- and undershoot their fundamental values by significant amounts," Ine Van Robays, an academic at the Department of Financial Economics at Ghent University in Belgium, told the Commodity Futures Trading Commission at a conference about commodity markets. However, she added, financial activity in the futures market only typically produces a short-term impact. "This implies that financial trading matters, although its effect on spot oil prices is only short-lived," Van Robays said. She spoke at a CFTC conference on commodity markets that took place as the agency is considering stricter position limits for energy, agriculture or metals derivatives, seeking to curb speculation and potential manipulation by hedge funds and other investors. The CFTC may vote in September on the controversial position limits proposal, which was introduced in January. It also comes as Sen. Bernard Sanders earlier this week called on the CFTC to schedule an emergency meeting to adopt the position limits proposal, citing evidence that speculation has driven oil and gas prices higher. Her comments were backed up by David Frenk, research director for progressive watchdog group Better Markets. "Financial flows can and do dominate commodity price formation, not all the time, but enough of the time to make a real difference," he said. Frenk said that financial speculation is excessive and is causing higher, more volatile prices than would otherwise be the case. "Given the enormous importance of commodities to the lives and livelihoods of people across the earth, facts should be more important in the debate and purely financial price increases of commodities should be stopped," he said. However, University of California economics professor James Hamilton told the CFTC that the big picture driving the price of oil has been stagnating global production of crude in the face of big increases in world incomes and a spike in demand for oil products in emerging markets -- not financial speculation. "Sure it is fine to talk about [financial] speculation, but we should all be able to agree on the big picture that the real story driving the price of oil has been stagnating world supply in the face of a big increase in world incomes," Hamilton said. Hamilton downplayed the impact of financial speculation by hedge funds and other traders on oil prices, insisting that market fundamentals are the key factor to consider when thinking broadly about the price of oil. To back his conclusion, Hamilton pointed out that global production of crude oil, in millions of barrels of oil a day, in the past decade has stagnated, particularly between 2005 and 2009. He also cited International Monetary Fund data that showed global real gross domestic product increased 17.2% between 2005 and 2009, driven largely by growth in emerging economies. "The big story is that global production of oil has stagnated and it is a very important event that everybody ought to be aware of and think about how this jives with tremendous demand for oil products in the emerging markets and fundamentals," he added. -Ronald D. Orol; 415-439-6400; AskNewswires@dowjones.com (END) Dow Jones Newswires
Just curious why anyone would spend so much time on the internet saying "I told you so" lol If your always right and wealthy because of it, go buy a Ferrari and show off to some chicks. Not on ET , that's really lame. Your big ego is served better in the real world not on the internet. It's not because of this post, it's because of all your posts collectively have the "I'm always right" theme.
maybe because Im right 95% of the time, but get shit from the miscreants here 100% of the time. if I dont document it, the innocent won't know.
I took a crap at 8:15 am. The innocent don't know. I shall start documenting it so they know I'm not full of shit. Just playing with ya, Make a journal. That would be better documentation.
"a Belgium-based academic told the U.S. futures regulator on Friday as part of a debate the agency held as it weighs new rules." Yeah, okay - case closed. You are right; Specs must be manipulating oil. Did you actually get through high school, or flunk out of your 9th grade english class for critical reading comprehension failure?
see what i mean usually from one of these serial new nick types. same morons over time, they just like to make up new names.
So, Abraham Lincoln, since this is your thread and your bold proclamation in the form of a market call, please refer us to the exact date and time where you "shorted" crude oil.
your powers of observation need work. good thing you don't actually trade. where do I say anything about a call?
The lowest form of life? Those who refer to themselves in the third person...especially in a complimentary manner.
Look everyone, hey, over here, look at me, come see how smart I am - I found an ECONOMIST who agrees with me.