Who else agrees that oil should not be speculated on?

Question

Based on what I have been reading, it seems that this group of speculators come up with ideas that have an impact on crude oil prices. Every time they speculate the worst case scenario, the price goes up. If a speculator breaks a nail, the price goes up. Does anyone have any ideas how to get the trade commission to put an end to that? Does anyone know if crude oil has an actual value or is it strictly based on trading?

Answer 1

I  tend to agree with your point that speculation has a substantial impact, (and blaming the recent price boost on OPEC or World Bank is like claiming you have bigfoot DNA).

In '73 there was an actual oil embargo, manifested in higher prices and long gas lines.

No gas lines this year, just speculators guessing gas would be around $4  by the 4TH.

I saw a program last year, where a financial speculator claimed, he, and many of his colleagues saw the World Trade Center as "a tragedy, yet,  a real money maker for them."

As noted by news reports, if you stopped oil market speculation (somehow)  in the U.S. it would still continue around the world.

And unlike diamonds, that have an artificial value controlled by De Beers, easily obtainable oil is running out, and future sources will become increasingly more expensive. Possibly, the  price-gouging speculators are flexing a muscle they didn't know they had.

And look, in the 80's,  CDs cost music companies allot less to produce than cassettes, but we paid more for them at the store. Why ? Because, first we didn't know, then, we obviously didn't care.

(should we have boycotted all CDs until prices were fair?)

The up-side is, maybe, maybe, in this election year, our government, the most powerful in the world, will finally come up with an effective energy policy. Or not.

But, it has definitely waken up the populace, and given us a preview of the future.

Answer 2

OPEC runs the game, and nothing in this world has a monetary value that isn't based on trading.

I think any consumer would like to see prices lower, however, some form of corporate speculation drives the prices of every aspect of the marketplace, its simply eagle-eyed economics being used to increase profits and protect against a potential crunch in their market.

Answer 3

I agree, there should be some kind of legislation to stop this.  Speculators have driven up the cost of crude oil prices and we are paying for it.

Answer 4

I disagree. Speculators cannot control supply nor demand.

They only place paper wagers on what the supply and demand will do to the price. They happen to be pretty good at it, and perhaps they can have a self fullfilling prophecy of sorts in the short term (and on paper), but ultimately, supply and demand set the actual trading price, not the speculators.

Answer 5

thats just a smoke screen for the World Bank

Answer 6

When reached $100.00 for a barrel of oil individuals purchased the oil to only sell the price of oil went up. That is how we got ourselves into this energy crisis.

Answer 7

Speculation actually prevents wild price swings by putting the risk of international events and supply issues into play.  Other commodities have been taken off the market with the exact same result every time, that result being far worse price swings.

The problem is OPEC countries have reduced production, while non-OPEC countries some how have managed to increase production and proven reserves.  US must require half of all vehicles to be flex fuel and then the market will work its magic, so to speak.

Answer 8

i bet you it should be

Answer 9

I agree with you! It was not legal to speculate in oil futures a few short years ago, because of the fears that a select few could drive up the cost of the product, if they desired to do so, and control the price of oil on the market. The increase cannot be blamed on supply and demand, due to these stubborn facts- The cost of oil has shot up from $20 a barrel 5 years ago to $140 a barrel- this is an increase of 600 percent.Due to the increase in the economy of India and China the worlds economy  grew about 7% Notice the gap here? The trade commission will do nothing until they are replaced by a new administration. They are all political appointees.

Answer 10

All commodities are speculated on. This is how things are brought to market. Under Socialism there is no speculating or investing. Gas and oil are impossible to get at any price. Which system would you prefer?

Are you old enough to remember the long lines at the pumps, the rationing, and the gas stations having no gas, caused by Jimmy Carter messing around with the free market in oil? I remember. If Obama is elected you will get your chance to live through that terrible situation and you will wish the high prices were our only problem. Expensive gas is way better than no gas.