Oil Bubble?

Discussion in 'Economy' started by midcan5, Jun 2, 2008.

  1. midcan5
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    midcan5 liberal / progressive

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    What's Really Driving the High Price of Oil? By Ralph Nader

    "Oil was at $50 a barrel in January 2007, then $75 a barrel in August 2007. Now at $130 or so a barrel, it is clear that oil pricing is speculative activity, having very little to do with physical supply and demand. An essential product—petroleum—is set by speculators operating on rumor, greed, and fear of wild predictions.

    Over the time since early 2007, U.S. demand for petroleum has fallen by 1 percent and world demand has risen by 1.3 percent. Supplies of crude are so plentiful, according to the Wall Street Journal, “traders of physical crude oil say their market is suffering from too much supply, not too little.”

    Iran, for instance, is storing 25 million barrels of heavy, sour crude oil because, in the words of Hossein Kazempour Ardebili, Iran’s oil governor, "there are simply no buyers because the market has more than enough oil.""

    Ralph Nader: What's Really Driving the High Price of Oil?
     
  2. Paulie
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    Paulie Platinum Member

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    To say that the high price of oil is being driven merely by speculation is pure folly.

    I've posted a few threads here recently that show with numbers, that the devaluation of the USD is what has caused most of the increase.

    You can't blame speculation, and not even consider the fundamentals that are DRIVING the speculation.

    I'd be speculating too, if I was a wealthy investment firm.

    I just don't see how it can be a bubble. How is the price of oil going to drop drastically anytime soon? We'd have to do several things politically before that would ever happen, and it sure doesn't seem like any of those things are in our foreseeable future.

    Trading Day : May 30, 2008
     
  3. Toro
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    Toro Diamond Member

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    If speculation is driving energy and commodity prices, why have the prices of commodities that cannot be traded risen more than the prices of commodities that are traded on exchanges?

    [​IMG]
     
  4. Paulie
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    Paulie Platinum Member

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    Uuuuhhh, ummmm, it's the oil companies then!

    It's anything but the Dollar!!
     
  5. Zoomie1980
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    Zoomie1980 Senior Member

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    Nonsense, in normal times less than 10% of the money in the oil market is speculative. Today over 50% is speculative. SPECULATIVE DEMAND has been driving this market for over three years now. And if there is one commodity I know, it is oil, it my family's business. It is the MAJOR cause of the run up, with the falling dollar second.

    The market hasn't obeyed supply/demand laws for several years now. Anyone who claims it's all about short supply is an IDIOT. There IS NO SUPPLY SHORTAGE and NEVER HAS BEEN. Not one delivery has been missed or delayed due to lack of supply. Demand peaked about three months ago and still trailed supply by about a million barrels a day. Demand now is DOWN almost a million a day since it's peak and speculators are FINALLY figuring it out.

    Oil had peaked and now we'll see if the speculators run away as fast as they came. I wouldn't be surprised to see oil crash to 70 or lower in the coming year before actually over shooting in the opposite direction before reaching real supply-demand equilibrium. And gold will follow oil. Grains are already headed down so long as overly bad weather doesn;t hit North America
     
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  6. BrianH
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    BrianH Senior Member

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    There's now significant investigation into the rise of oil prices. Congress as well as other officials speculate price manipulation. This will be very interesting. I personally don't believe that it's all Supply and Demand economics or an oil shortage that is raising prices. It's rising because the oil companies are manipulating prices because they know the AMerican public must pay for it. We have to get to work, kids have to go to school, etc....

    http://www.usmessageboard.com/economy/54458-oil-bubble.html
     
  7. dilloduck
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    dilloduck Diamond Member

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    I assume you have something to back up that speculation or is this the old "Bush Did it" theory.
     
  8. Toro
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    Toro Diamond Member

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    Speculation is playing at least some part in the rise, but by how much is not known. For example, 10% of all the gold purchased in the first quarter was done so by exchange traded funds, up from 0% a few years ago.

    http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=53375&sn=Detail

    CFTC is investigating oil trades.

    CFTC Investigating Crude Oil Market - TheStreet.com
     
    Last edited: Jun 3, 2008
  9. BrianH
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    BrianH Senior Member

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    Did you once read "bush did it" in my post??? I did not even mention Bush. The article may have but if I had wanted to cite Bush for the problems, I would have. My blame is on the oil companies and price manipulation. Read my post correctly and look at the link I posted as well before you accuse me of a Bush hater. (I voted for him)
     
  10. Paulie
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    Paulie Platinum Member

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    Do you even know what you base that on, or is that just a feeling you've got?

    Oil companies profit less than most other sectors in the market.

    People needed to go to work 10 years ago, and kids needed to go to school. That hasn't changed, so why all the sudden NOW when oil is so high do you suspect it must be the oil companies, when they could have been doing this for decades, according to your theory?

    And Zoomie, you mention your family being in the oil business every time you post about oil, but yet you always get shown up on your theory.

    You think speculation is the key cause, then provide some data. So far, the only thing you ever provide is your opinion and some numbers. After that, explain WHY the speculation exists to begin with, and why in these geopolitical times investors SHOULDN'T be speculating in oil.

    Let's see your fundamentals.
     

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