Take the speculators out of the oil market and oil will drop 50%!!!

Discussion in 'Economics' started by S2007S, Apr 8, 2011.

  1. S2007S


    This article is from yesterday, but I have been this for years, its time to stop speculating on oil, the reason we have oil at $100+ is because of speculation, it has absolutely nothing to do with supply and demand. Regulators don't give a fuck about whats going on, they continue to let the market do what ever it wants to do, speculation is easily adding $50+ to the price of oil!!!! You want oil to collapse, take the speculation out of the market!!

    Algorithms, Not Demand, Driving Oil Prices Sky High?
    Published: Thursday, 7 Apr 2011 | 5:32 PM ET
    Text Size
    By: Lee Brodie

    If crude oil's [CLCV1 111.88 1.58 (+1.43%) ] relentless march higher leaves you shaking your head, you’re not alone.

    Analyst David Greenberg of Greenberg Capital thinks the moves are about more than supply and demand. Much more.

    In a live interview on CNBC’s Fast Money he says “oil is $20-$25 too high. The $80 range is fair.”

    111.86 1.56 (+1.41%%)
    New York Mercantile Exchange

    Although oil probably deserves some premium because of Mideast unrest he says the fact of the matter is, markets have not experienced significant supply disruptions. And he adds that even during the Gulf War “we didn’t see a spike like this.”

    If supply and demand aren’t moving the oil markets, then what is?

    According to Greenberg, “The speculators have taken control of the market and it’s now out of control.”

    It’s a complicated issue but essentially he thinks that electronic trading has infused the oil market with more money than it can handle. “So it’s very easy for any fund that needs a position to go one way or another, to slam it with algorithms. That’s what’s moving the markets,” he says.

    That’s a bold and somewhat controversial call; and one that’s likely to draw a lot more attention especially after crude oil closed above $110 on Thursday, a level widely considered problematic for the stock market.

    And so there's no confusion, Greenberg does not think speculators alone are driving oil. "Of course there are fundamentals at play," he says. "The problem is that it's not just fundamentals at play."

    "And when you have fundamentals on the same side as the specs, when that happens it makes it even easier for them to move the market."

    Greenberg also tells us that he went to Washington years ago and warned lawmakers of these kinds of issues but to date regulators have failed to provide the degree of oversight necessary to prevent it from happening.

    What do you think? We want to know!

    Do you think electronic trading is largely behind oil's march higher?
    Yes, it's price manipulation.

    No, like it or not, fundamentals for crude are very bullish.

    Total Votes: 2627
    Not a Scientific Survey
    Results may not total 100% due to rounding
  2. Take speculators out of housing, and equity. Why is it bad when oil rises but not bad when housing and equity prices rise due to speculation? People do not follow a line of logic but react emotionally as to how it affects them, grow up., take the bus, carpool or stay in.
  3. Ive always said...

    Governments should ease pressure on food and energy prices by encouraging precious metal investing.

    Although I must admit I'm not entirely unbiased here.

    Also, I was thinking....

    Out of these last 10 years only 3 months didnt pay off being long oil....

    That's what you call a bull market.

    Buy and hold!
  4. LOL Blame speculators. You are a joke.

    How does a company hedge their price risk with nobody out there to take the other side of the trade?

    Food prices have also been rising. Why don't we eliminate "speculators" from this market as well? That will solve all of our high food price problems, right?

    How do you define a speculator? Who will regulate the market to investigate who is a speculator and who is not? Who will see to it that these evil speculators are punished if they do participate in the market? Who will pay the enormous cost for this added regulation?
  5. OPEC has absolutely nothing to do with oil prices, right?

    Speculators wouldn't make as much money driving the market down as up right?
  6. People have been conditioned in the western world to frown upon rising food prices and energy prices yet crave after higher housing prices or stock prices.

    I prefer the Jim Rogers point of view:

    Sometimes the paper pushers rule, sometimes those who really make someting rule.
  7. Bob111


    buy and hold and then all of sudden gvt steps in and cut speculation overnight. then what? with all due respect imo buying at these levels is a risky game. US gvt could be very unpredictable right now and into election. who knows,what they might come up with to get the votes..
  8. Thats like saying microsoft is worth 200 billion because of speculators. Never mind that they make billions in profits every year, are on almost every pc and sell shitloads of software, nope, that probably doesn't have anything to do with it.

    This guy thinks that market structure only applies when he "thinks" its priced right, otherwise, there is something wrong. The guy is a complete and total moron it appears.

  9. Oil will probably drop going into the next presidential election year.

    Great buying opportunity. :)
  10. fanews


    market collusion or price fixing is illegal in the housing or real estate market is illegal too.

    real estate is local and equities is very thin and doesn't effect the general economy as much as commodities do.

    speculation or market manipulation in commodities is much much more serious to the economy.

    #10     Apr 8, 2011