The June Crude Oil Contract traded @ 122.70 a barrel so far today. When I was a kid in '73 they had a shortage of fuel complete with no gas today signs and a thing called odd and even days for the purchase of gas to keep folks at bay,,there was a demand and short supply....prices went up. Today their are no lines at the gas station,You can walk down the isle at the store and the shelfs are all full... yet almost every commodity has gone through the roof. Has speculation run amuck ? Has access to the markets become too common place for people that have found a way to 'possibly' make a quick buck doing nothing substantial.... building nothing...just sitting on their ass's donating to the self fulfilled prophecy that are the technical indicators, OR , Is this the group of traders loosing just enough money to feed the appetite for profits that the professional traders are making,, running prices through the roof,, and unfortunately as a side effect of their "work" the rest of the world has to pay through the ass to support their "Business Plan" Back in 2000 while at a Home Depot I heard two guys talking about their Amazon Stock....'Money for nothing" as one put it.. by New Year 2001 the market had dumped nearly 2800 points..."Speculation run-eth over" It was birth of the dot com bubble. More recently,, if you could spell your name someone would sell you a house complete with a floating interest rate and a balloon payment in 5 years. During this time 'Speculation run-eth over' again. and now what a mess... Commodities are currently boiling over at a cost that could very well be the straw that will break the consumers back, Everything is goin nuts,yet there are no immediate VISIBLE shortages of ANYTHING. I love trading just like anyone else, hell,,I'm up $500 on two mini contracts of Gold today ...but maybe thats just the reason this is all to easy for Joe Blow trader to sit in his robe at the computer and dabble in markets... Maybe (and I hate to use the "R" word) there should more regulation on speculators....maybe we should have to obtain a CTA license... ,or pass a Series 3 Exam to participate in the markets to prove we have knowledge of what the hell we are doing, It could level the playing field ,,granted ,money may not be made as easily for traders but the markets would have a more true balance with less chance of the current BUBBLE BLOWING that has become the inherent side effect of every trader in the world running to the same well for water so to speak. Could be this is to harsh....but I can feel it in my gut this 'runaway' of things like Crude Oil and any other 'Trending Market' is going to come home to roost at the cost of world economy and it ain't gonna be pretty. They say it's a falling Dollar issue...well the dollar is just about where is was 2 months ago,,it has been 2 Dollars lower,but in the same amount of time Oil has gone up $22.00......go figure ? Maybe they just need to jack margins up 5 times their current price to shake out this easy speculator money and level out the markets. I like making a buck just like the next guy...but deep down something feels like bullshit, and someday I think the current system of the way we're doing things is really going to cause us grief...what do you think? p.s. when I started this thread the Oil high was at 121.35,,then 122.25 and now its at 122.70 ......ah...no big deal....right?
That is exactly what is happening. The price isn't going up because the actual demand for oil is going up vs the actual supply of oil. It's that due to speculation the demand for the CONTRACTS is going up vs the supply of those contracts.