Saudis & Oil Speculators

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We need tools to knock the knees out from under speculators when things get ridiculous. Be nice to have preset "circuit breakers" like a 55 mph speed limit or even extra gas tax that would cut consumption beyond whatever margin the traders are counting on, if a price per barrel increase goes over a certain % over X months. That preset, already-law circuit breaker would overshadow said speculators and might convince them to find other pickings.

Begging the saudis is kind of low for a first world nation, but we weren't and aren't rife with options.
 
Originally Posted By: eljefino
We need tools to knock the knees out from under speculators when things get ridiculous. Be nice to have preset "circuit breakers" like a 55 mph speed limit or even extra gas tax that would cut consumption beyond whatever margin the traders are counting on, if a price per barrel increase goes over a certain % over X months. That preset, already-law circuit breaker would overshadow said speculators and might convince them to find other pickings.

Begging the saudis is kind of low for a first world nation, but we weren't and aren't rife with options.


Bingo!!
 
There was a time when there were no speculators bidding on oil futures.I think it all started in 79.Why it was even allowed back then I will never know.
 
I think if we required that you actually had to have the facilitities to accept physical delivery of oil before you could buy futures, a lot of this [censored] would disappear.
 
Originally Posted By: NHGUY
There was a time when there were no speculators bidding on oil futures.I think it all started in 79.Why it was even allowed back then I will never know.


Some speculation in markets is good. History has shown us that, especially historically in agriculture markets, as a certain amount of speculation helps with price stability (both ways).

However, what's happened in the oil market over the past decade is nothing but theft IMO.

http://news.firedoglake.com/2011/05/25/cftc-charges-oil-traders-in-2008-speculation-scheme/

Gasoline demand in the United States is at a 10 year low, we're exporting record amounts of refined gasoline, and the price of gas has never been this high at this point in a year.

It's partly supply and demand, partly the result of the devalued dollar, but to deny that part of the problem is financial corruption is just lunacy.
 
For the record, I invested in an energy ETF a few weeks ago with the thought that all this talk about Iran will make crude oil futures start climbing again.

Might as well get in on the action if you can.
 
Originally Posted By: Y_K
I am not buying into this sad Saudi tale


The Saudi tale just helps fuel the speculators that's all. It's a small part of the mix blown out of proportion. If we see $5 a gallon gas expect the auto industry to take a dump again. It might be time to buy that new car you've been dreaming about, the dealers will be begging for sales like they were a few years ago. JMO
 
I like the idea that if they pump it up here then they sell it here.

This whole price thing is occurring when supplies are HIGH and demand is LOW. Completely bass-ackwards.

It is not the fault of oil speculators... it is the fault of oil exportation! There should be a strategic tariff on exported oil and oil products.
 
Look at global demand, gentlemen. Even motor oil base stock manufacturers can not keep up.. Global demand is UP.
As for limiting trading opportunities, it will backfire disproportionally. The less liquid the market, the easier to manipulate it.
 
I checked the large speculators positions (free COT data) and they did spike recently indeed. However, they are still not as high as a year ago when Libian war started. So, the oil could go a bit higher before falling down. If Iran war materializes, all bets are off.
 
Correction: The gasoline futures speculation by large speculators (ie banks, pension funds, mutual funds and hedge funds) is indeed much higher that it ever was before. Small speculators are also heavily in. This is good news because prices tend to go lower after all speculants are in. Unfortunately, there could be a couple of months lag time.
 
Its great to hear what Lindsey Williams thinks. Now, if Homer Simpson and Kermit-the-frog would offer their equally knowledgeable opinions we would have a balanced view.
 
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