6 Myths About Oil Speculators

Oil speculators

If they want to speculate, then they should take the full risk by investing 100% of the value of their position and take possession of the oil. This will show they are committed.

My bet is they will not speculate anymore if margins were eliminated.

Bob

Bob Diamond of MI @ Jul 09, 2009 12:30:38 PM

speculators

i actually did not really know what the heck speculation technically was.i knew it was a stock market type of dealing,but thats it.and the having to invest 50% at least in your oil deal makes sense if it works in regular stock purchases,ect.reminds me of buying stocks on credit previous to the crash of 29.i live in california and see the results of a bunch of people writing what i call "cheater" loans on real estate.if they would have been held to the standard fha rules as i understand it,[with 5 or 3 % down mandatory,ect]none of this stuff would have happened.housing would have stayed stable and affordable for regular working folks.i know i'm comparing two different things,but to me it sounds kind of like the same problem with the pricing of oil too.

scott wyman of CA @ Jun 10, 2009 23:38:03 PM

Capatilism: just another "ism"

Mr. Newman,

Obviously speculators follow market fundamentals and obviously they serve a purpose in the market for other investors, otherwise their existence would be illogical. That is not the argument against them.

Unregulated speculation in any form drives up prices and always leads to economic turmoil. Land speculation in the 1800's for instance often led to a bubble in homestead prices and a collapse of the local economies when farmers could not pay their debts. That's why its regulated today.

Oil futures are not currently properly regulated. People that want regulation are not "witch hunters." A bubble in fact quite possible as well. If oil prices were to rise to 100 a barrel again before the world economy recovers, it will likely kill the recovery and oil prices will deflate. This fear is held by many respected economists. What is your definition of a bubble?

Julia of NC @ Jun 10, 2009 13:33:25 PM

Cogent thought, capable grammar

Is it just me or does any one else thinkt that most of the people commenting here must not be native speakers of english?

I cannot understand what the majority are trying to say. Between the incomplete thoughts and jumbled grammar I am at a loss. Why do you even bother.

W.T. P. Sanders of MA @ Jun 02, 2009 14:36:19 PM

The consequence of the greedy acts

Before 60 Minutes was aired, I saw the media on TV interview some experts, she or he quote, because of "Demand and Supply", I kept wondering at that time how could the whole country OK with that answer, no protest or anything? ( I saw some here and there but not a big group, this kind of insult the mentality of the citizen here, I never believed in that). At that time, I thought that the oil company bought everybody already.

60 Minutes has an heroic action to air this fact on TV against those parties that will benefit if oil price is up such as those companies (before melt down) who attempted to make profit from oil speculating or hedging in a big pool and some greedy investors.

Regardless of what you did in the oil market, please leave the rice commodity alone, I believe the same evil thing drives the price up twice as much, and it hasn't come down back to the way it was ever since which makes it very difficult for lower income people all over the world.

Pamela of LA of CA @ Apr 18, 2009 11:13:20 AM

Oil futures prices

Yes, please comment now that oil is 100 dollars less than last year. Explain that one, ha ha.

Joe Olstad @ Apr 09, 2009 15:58:36 PM

oil prices

When in the hell is congress going to get off their behinds and regulate oil with the amount cash required to purchase these contracts as when I buy stocks?That would certainly curb the amount of speculation but as usual big oil lobbies control the Congress just as in other industries. We need to fire the whole damn congress and start over. This is just one example how corrupt our government is and unless it changes we are headed for a major depression in the very near future.

rgc of GA @ Mar 12, 2009 16:07:02 PM

60 min TV

Several weeks ago 60 had a segment on this topic and Michael Maters an expert in this field was one intervewee and he says the stats now show that demands was down and supplies up when oil hit 148 a bl. so what was causing this. Well, when there was only 30 billion in oil speculation until hedge fund mgrs saw an unregulated cash cow and started putting their pension plans etc into oil speculation future that shot up to about 400 billion explains it wasn't Supply & Demand that caused this bubble up. So some of you need to take heads out of the sand. GREED Baby GREED drove the price up as GREED knows no boundries.

Nww oil is 34.00 a barrel & gasoline here is $1.69 which is 8 dollars less a barrel then when we were paying a $1.39 a gal. Explain that supply and demand.

Phil Grove of OK @ Feb 21, 2009 01:04:37 AM