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Even Warren Buffet says you are wrong. "In my lifetime, up until the last year or two, there's been a huge amount of excess supply available," he said. "We don't have excess capacity in the world anymore, and that's why you're seeing these oil prices."
You see the part you fail to recognize in your make believe scenario is
If I buy 100 contracts for oil, not only did I buy that from someone else, = $0 increase (i.e. I got contracts, you gave them up), but I also have to sell these contracts before taking delivery of the oil, meaning I have to then sell, and someone else buys, which again = $0 increase..
The NET number of contract which were adjusted is
+100 contracts when I bought
-100 contracts when I sold
= .. Yes, you can do the math.. ZERO CONTRACTS
There is no net effect on the market depending on if I'm holding the contract, or you..
Even Warren Buffet says you are wrong. "In my lifetime, up until the last year or two, there's been a huge amount of excess supply available," he said. "We don't have excess capacity in the world anymore, and that's why you're seeing these oil prices."
You see the part you fail to recognize in your make believe scenario is
If I buy 100 contracts for oil, not only did I buy that from someone else, = $0 increase (i.e. I got contracts, you gave them up), but I also have to sell these contracts before taking delivery of the oil, meaning I have to then sell, and someone else buys, which again = $0 increase..
The NET number of contract which were adjusted is
+100 contracts when I bought
-100 contracts when I sold
= .. Yes, you can do the math.. ZERO CONTRACTS
There is no net effect on the market depending on if I'm holding the contract, or you..
You have anything a little more current. Your source post is three years old.
So you basically have nothing meaningful to add to the thread. O.K.
hotaur2, you seem to be missing one very important piece of information.
Speculation always involves two items of value. One is expected to be more valuable relative to the other at some point in the future. If we purchased oil with bananas and Honduras got hit with a deadly banana parasite that endangers the current crop, the price of oil would plummet. Do you understand why?
That's right!
The anticipated increase in the price of bananas will cause people to dump oil in favor of bananas. After the banana shortage is corrected, they'll find something else that promises to be in short supply and high demand in the future.
Today the world has an abundance of US dollars and the Fed continues to flood the already saturated market with more dollars. Moreover, since business is uncertain about future taxes and regulations (a lame duck Obama would be very bad for business), they are sitting on their dollars. Well, that is unless inflation forces them to dump their dollars.
Yes, today the dollar is a very dangerous place to store wealth. Oil, on the other hand, is a very secure place to invest since there is little chance the world's largest consumer of petroleum will make necessary changes to decrease their dependency or restore the value of the dollar.
We could rapidly reduce the price of oil by reducing our oil consumption, increasing our own oil supplies, increasing GDP to sop up the extra money, raise interest rates (increase the future value of money) or simply print less worthless paper currency. In all likelihood, we'll do none of the above until Obama is gone.
Money.com: On Friday, oil prices fell 2.6% to settle at $97.18 a barrel, the lowest level since mid-March.
It appears it all was a bubble and bubbles break.
I can be assured as one thing, if the price of oil falls to $40/bbl., the people who blamed Obama for the rise won't give him credit for the decline. (I don't think he was responsible for the rise nor deserves credit for the decline.)
I can be assured as one thing, if the price of oil falls to $40/bbl., the people who blamed Obama for the rise won't give him credit for the decline. (I don't think he was responsible for the rise nor deserves credit for the decline.)
Wait that can't be. According to some of the other posters this was all about supply and demand. So I guess we use far less today or maybe they just pumped a lot more today.
No, this was pure speculation, which turned into a sell off.
Just who are the speculators & why are the politicians in washington so damn corrupt esp nancy (BOTOX) pelosi ?
Thanks for bringing a dead thread back to life.
Posting tip: if you are going to call people corrupt, please explain how instead of making open-ended blanket statements. Otherwise, nobody knows what the F you're talking about.
I dont trust most politicians & oil is always going to be high. I paid $3.66 a gal today.
How much should you pay?
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