Why are oil prices plunges and what is next?

[Warner]

ROFL

There's a 2-3 month lag between actions that will drop the price of oil and the actual price drop. The oil companies did not think the stock market crash would happen before the election when they made their moves. It's POLITICS!

By the end of January, the price will be at $100/bbl again.

 

[Kid Pickle]

The speculators figure we are all going to be broke soon, so they cannot continue to write high priced contracts when people are going to be unable to buy the gas for their cars anyway. That is a bad sign that America is heading for serious trouble, especially now that the oil companies are losing their shirt over the whole deal.

Next, Russia invades south and takes as much oil as it can, which drives the price up - Russia wins! Or, maybe, Iran and Syria invade Israel and/or everything around them and then fight over the rest, which drives the price up - OPEC and Russia win!

Either way, the loser is US, spelled U.S., because we are gonna get taxed into oblivion and Our Shiny New Fearless Leader won't lift a finger to stop either of them.

America, the next France. Hoorah.

 

[Toro]

Now the speculators are driving the price down because of mass liquidations and de-leveraging.

 

[dilloduck]

Normally functioning markets are the ONLY way to set commodity prices. However, when markets become awash in SPECULATIVE cash, they cease to function as a valid price setting force. In 2004 the total amount of money in the oil market was 23 billion at any one trading day. At the height of the oil price explosion over 260 billion of speculative cash was in the market. It ceased to function as a rational market. When most all that 260 billion ran away, it expectedly CRASHED.

A Normal market will have about 10% of its investment classified as SPECULATIVE. 90% comes from people who actually deal in the physical commodity. At the height of the oil boom over 80% of the money in the market was SPECULATIVE!!!! A market simply ceases to function rationally in that fashion

gambling----we lost our asses to people who gamble--on oil, on mortgages, etc.

 

[JimH52]

The speculators figure we are all going to be broke soon, so they cannot continue to write high priced contracts when people are going to be unable to buy the gas for their cars anyway. That is a bad sign that America is heading for serious trouble, especially now that the oil companies are losing their shirt over the whole deal.

Next, Russia invades south and takes as much oil as it can, which drives the price up - Russia wins! Or, maybe, Iran and Syria invade Israel and/or everything around them and then fight over the rest, which drives the price up - OPEC and Russia win!

Either way, the loser is US, spelled U.S., because we are gonna get taxed into oblivion and Our Shiny New Fearless Leader won't lift a finger to stop either of them.

America, the next France. Hoorah.

Can you tell me where you are hiding the crystal ball so that we can all take a peak. The GOP lost. Get used to it...

 

[editec]

There's no shortage of oil and certaily even less of a shortage of energy sources other than oil.

There's a shortage of political will to fix the problem.

 

[Chris]

Buckminster Fuller said, "There is no energy crisis. There is only a crisis of ignorance."

 

[Zoomie1980]

gambling----we lost our asses to people who gamble--on oil, on mortgages, etc.

This is a clear lesson to the libertarians. Some regulation is always needed. But it should be limited to solely preventing speculative EXCESS. THat's easy to accomplish in commodity markets. Simply limit daily moves, and limit the speculative activity to 15% or less in any market. After a set amount of money is in a market, that's it, the market is closed to any NEW speculative money. Get in line if you want to "invest"

 

[editec]

It should be easy to prevent banks from going into the wild speculation business, too.

We had those laws in place and then we blew it in a frenzy of stupid deregulation based on nothing but a goofy ideology that all regulation was bad for business.

When will we ever learn not to throw the baby out with the bath?