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speculation has been a significant part of prices since the rise of the hedge funds. that said, its more of a stars lining up just right type of thing.. we've got unrest or potential unrest in oil producing countries(in africa and the middle east), we've got russia(whos a major producer outside of opec) looking less friendly for foreign business every day, venezuela is nationalizing businesses owned by foreign companies(including oil) and improperly managing them as well as demanding more money out of new and existing deals, the us dollar is suffering, inflation is going up, rates are very low, etc etc.
its a bubble and it will pop when things get better
Investors speculating on commodities because they have nowhere else to put their money?
or
speculation that exporters to the 1st world (us, europe, japan etc) have grown tired of watching their precious commodities leave in exchange for IOU's?
or
speculation that the dollar (and other 1st world currencies) will be dumped as the world's reserve currency?
anyone who thinks that oil will go down while helicopter ben is at the helm of the printing press needs to have their head examined. worthwhile noting that we have only had sub-prime round 1 and investment bank bailout round 1.
our trade deficits in the west need to be addressed as the number one priority!!!!
I'm not sure what to think about oil. What is happening in the oil markets doesn't seem to match a typical "bubble" as there is no increase in credit etc that is causing it. There are no new methods to leverage yourself to buy oil or other things that are typical of ponzi schemes.
If this is a bubble than that means there is plenty of supply, but what is happening to this extra supply each month? Speculators don't want the actual oil so if there was an over supply one would imagine that the spot price for oil would be much lower than the price seen in the futures markets. But that isn't happen, the spot price is around $130/barrel. So who is eating up the extra oil and where are they putting it? One could argue that the oil export nations are keeping it right in the ground, but that wouldn't be a bubble in the traditional sense at least. Also as far as I know they haven't dropped production in the last year, at least not enough to explain such large increases in the price for oil.
Speculators and commodities trading in oil is a huge huge part of the jump in gas prices. You won't get much response on this however, its much easier and more popular to blame "oil executives" or Cheney or something on high oil prices. People don't understand the cause and effect. People don't understand the industry and theories behind this so it doesn't get much publicity.
The oil industry is cyclical, regardless of supply and demand. It's rising unchecked now, but even speculators finally have to call their hand sooner or later. It crashed in the 90's, and it will crash again. Oil prices will reach a cealing soon, and then their are going to be alot of unhappy oil investors. Like the housing industry and IT industry before it.
yall are idiots if you think this is a bubble. speculaters wouldn't have any reason to speculate if our government and "federal" reserve weren't shooting it's own citizens in the feet. The NWO/banking elite are a powerful group of men. They created our reliance on oil, put out this "peak" oil theory, carried it out beautifully, and are choking us into complete totalitarian rule. World governments are merely a pawns for the people with the real power.
There is speculation in all commodities; it is just a bit frothier in oil and related products lately. It may be that 20% of the premium right now is speculation, and certainly 20 - 30% of the price rise we are seeing is the fall in the dollar... but that leaves 50% that is simply supply and demand. There have been no new supplies coming on-line and the demand has greatly increased. I don’t expect to ever see oil below $90 again.
There is speculation in all commodities; it is just a bit frothier in oil and related products lately. It may be that 20% of the premium right now is speculation, and certainly 20 - 30% of the price rise we are seeing is the fall in the dollar... but that leaves 50% that is simply supply and demand. There have been no new supplies coming on-line and the demand has greatly increased. I don’t expect to ever see oil below $90 again.
the view and cdelena, you both nailed it pretty much. Nothing else to be said.
There is speculation in all commodities; it is just a bit frothier in oil and related products lately. It may be that 20% of the premium right now is speculation, and certainly 20 - 30% of the price rise we are seeing is the fall in the dollar... but that leaves 50% that is simply supply and demand. There have been no new supplies coming on-line and the demand has greatly increased. I don’t expect to ever see oil below $90 again.
bear in mind that only a short while ago all you saw were bicycles and tuc-tucs and overseas travel there was a pipe dream. in addition their diets are also changing away from rice/veg towards meat which is more energy intensive
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