Question:

Are speculators actually buying future Oil for a client?

by  |  earlier

0 LIKES UnLike

I always saw futures speculation as a risky bet like day trading. However, the more I think about it, I am now thinking that speculators can also pre-purchase a product like Oil before it is produced for a client to use or resale in the future. Is this true? If so this could artificially induce a Peak Oil scenario years ahead of time. That means the competition for demand that would happen years from now can actually happen now in advance. Yes?

 Tags:

   Report

1 ANSWERS


  1. In a way, yes.  Although future contracts are rarely for more than a year.  Our current high oil prices are not because supply is running out, its more that demand is increasing more quickly than expected.

Question Stats

Latest activity: earlier.
This question has 1 answers.

BECOME A GUIDE

Share your knowledge and help people by answering questions.