Speculation plays an important role in pricing Oil and commodities. Why are speculators getting so greedy?

Question

Speculation prices OIL, based on future demand, let's say Summer is coming up. They speculate 3 million cars will be on the road traveling, so let's price all futures as X dollars, it sends barrel prices (OIL) increasing. Reduce demand for oil now, they won't speculate as much. In the process OIL companies are making over $10 Mil. in profits alone per quarter, these figures are on the low side. Why should we pay for someone's profit and dividend shares? Why is the common man making the rich richer?

Answer 1

Jack -- you obviously do not have 2 nickles to rub together.   They call it greed.   But, is greed a bad thing???  Or a good thing???   All I know is that greed is a GOOD thing.  That is how Ford--GM--Sears--Target--WalMart have built such an empire --greed for more money... The common man has always built the castle for the king and made the morarchy richer.  

Jack-- buy some stock and get some of the dividend from the oil companies... Jack you have to get in the rich line to prosper.    The poor will always be poor.   Bad choices on your part will lead you into rehab--jail -- baby daddy...   So. grow up and get smarter -- hopefully after you read these comments...  College is a traditional way of breaking out of poor...

Answer 2

You do realize that a speculator has to resell that oil contract they purchased for more than they bought it to profit?  And if nobody is willing to pay the higher price, the market will bring down the price, thus causing a speculator to go into the red?

Speculators provide liquidity to markets. Without them, price swings would be enormous. I doubt you'd enjoy paying $3/gal one day and $3.50 the next....

Don't blame speculators for high fuel prices, because nothing is more of a market moving force than people deciding to fill up their SUV or take the bus to work.  Supply and Demand will ALWAYS trump speculatulation.