How could a speculator corner the global oil market?

Question

It's amazing to me that people understand so little about how futures markets work but have such an easy time blaming traders for high energy costs. Most people don't even realize that most traders sell product exactly as often as they buy and that they can sell a product they don't physically own. The overwhelming number of futures traders do not take delivery of the products they trade so the net effect should be zero because for every buyer there is a seller. Decisons are based on supply on demand in a global market. It would be almost impossible to corner crude markets because of the number of global players involved and because of regulative scrutiny. What is the logic in the belief that a futures trader can have such a drastic effect on the supply/demand for oil and how do you think someone could "corner" the energy markets in such an enormous and highly regulated market?

Answer 1

No one individual or corporation has enough money to "corner" the market in oil.  Even as a group, governments would find it very difficult to corner the oil market.

People blame traders and/or speculators because that's want the press has been feeding them and the sad part is, the government knows even less and is buying into this hype.

Our government tried to blame the oil companies, but after our liberal congress interviewed them, they realized that they had no idea how the economy works.  So the next in the food chain are the traders and/or speculators, so Congress is blaming them but at least the traders/speculators are ignoring them, why waste their time trying to explain how the  markets work to a group of people who, not only don't understand, nor do they care.

Now we have a major party who wants to tax the big oil, take their money and give to whomever will vote for them.  Let's "force" the oils to develop alternative fuels, rather than let them bring more oil to the market place and refine more gasoline.

Coporations have made our country as great as it is, the free market has helped the world grow and made many countries able to compete in the world market.  The last thing we need is the government dictating policies they don't understand.

Governments destroy economies easier than they do promoting them.

Answer 2

It's a class motivated action and it makes all the sense in the world to the top 1% in world asset class. Their modus operandi is to destroy democracy and the middle class at all costs, even if that includes a steady diet of yellow journalism to put even more pressure on the middle and upper-middle classes.

One mega-royal ruling party for all, backed by a worldwide terror-police state keeping the masses working and poor, that's the mantra. Eventually all the dissenters will be eliminated or jailed. The middle class, born out of the reign of Britain's Queen Victoria as God's chosen class, bears the brunt of social programs for the poor. But with them eliminated, the anti-Christ and his agenda becomes clear.  

Your safety in private security becomes threatened by the police.

Your safety in the police becomes threatened by the military.

Your safety in the military? It is what it is.

The United States may be the most free of all the nations and certainly, that is why many seek it's destruction, but it is far from a utopia.

Answer 3

some pension funds have gotten into actually accepting physical delivery, and then writing contracts on that commodity.

this is what happened to silver a couple years ago - there was virtually no silver available for physical delivery, and when one firm started demanding delivery, they pushed the price up rapidly as traders had to scrounge together as much silver as they could to deliver on the contracts.  and when there's only one person firm that actually has any physical silver, they can charge a heck of a lot for it.