Oil has become a stock

Discussion in 'Economics' started by SCI new york, Jul 10, 2009.

  1. What happened to the good old days when Oil prices revolved around supply and demand figures and relations to economic resources? Now all you see it oil manipulation and excessive volume trading to drive the price of oil higher or lower. Resource numbers are irrelevant, now its just about price fluctuation and daily volatility. Firms trade oil contracts as if it's an ETF taking the price well above and well below what a nominal status price would/should be. A few years ago when oil traded higher, it was seen as a negative and the market would trade lower. Now when oil trades lower, its seen as a terrible event and preoccupies the marekt and drives it lower as if lower oil prices meant the fall of man or something. This market has become a hoax filled with bullshit. it really is a shame that better regulations aren't put in place because for the last few years there definitely hasn't been a "fair and orderly market"

    oil is shit.
  2. Oil is the probably the fastest way to transfer money in this desperate economy.

  3. SO TRADE SOME! The CL markets are highly liquid, electronic, open 23 hours per day, etc.

    Great place to speculate!

    If you don't like high oil prices, tell the war-hawk nuts in Israel & USA not to bomb Iran; also talk to Bernanke about not inflating OUR currency.

    Oil prices won't go to $20 or $120 for NO reason.

    There's always a justification. Speculators are just messengers.

    Stop whining & join the party. Maybe you'll win; maybe you'll lose.

    But don't be a stupid socialist
  4. im not a socialist and far from stupid so save your withering attitude if you're not going to contribute anything worth while.
    I'm simply stating that the game has changed. I used to trade OIH because there was a good basis for it depending on standing crude prices, supply and demand, and economic events. Nowadays any jerkoff with a hedge fund running a quant program can force the prices significantly higher or lower with no basis. too much manipulation going on and they can get away with it because its commodity trading as opposed to equities.
  5. Where have you been?

    The OIH only has 18 companies in it and is very easy to trade because it is incredibly liquid. RIG makes up 17% and SLB makes up nearly 12% of the index, as does DO at almost 9%. So in effect, 36% of the index is weighted towards 3 stocks.

    It trades with a very high correlation to the Dollar, just as crude does.

    No surprise there.

    As for equities trading as "commodities", that has been going on for nearly a DECADE. The Dot.com era was a great example of that.
  6. Napoleon said that when China rises, it will shake the world. Consider oil prices to be a seismograph.
  7. You're right, the game has changed. Market competitiveness has grown, and the days of easy money are long gone. Things will only get tougher from here on out.