Why is speculation a factor of rising oil prices?

Question

Why is speculation a factor of rising oil prices?

Answer 1

because if they think the price will go up...they bye more c**p. which causes what they are trying to avoid!

Answer 2

u don't watch the new, pump your gas....?  cnn.com, foxnew.com, and world new, local news

Answer 3

Oil like many other commodities are traded on the open market...

so what happens is investors will buy up say 2,000 barrels of oil hoping the price of those barrels will go up...

now the most famous case happened last year...one man wanted to be the first to set the 100 a barrel record...at the time oil was trading  just over $90 a barrel... so he placed his buy order above current market value at $100...didn't take long for speculators to jump on it....

so that's kind of what you see happening now...people buying oil at say $130 and placing a sell on it when it reaches $140+ oddly enough the major culprit in this are hedge fund managers and the folks who manage retirement funds...there under a lot of pressure to show monthly gains in those investments and with everything else falling oil is one of the few things that raise...

in other words the people that manage your own retirement fund are the reason your paying so much for gas right now....

Answer 4

I am playing very big on oil trading, from Morgan Stanly,  Goldman & Sachs on the Wall Street .

I bought millions and millions of barrels of oil when they cost $60--$100 a barrel. I expect to make a kill when I sell. But right now it’s only $145 a barrel. So here is my difficulty:

I already requested my agents spin the media, like: “Oil future looks high, expecting to be in the range of $200 a barrel soon. ”   But it does not work price up as fast as I expected.

I have also demanded my agent playing “China demand high” blaming game.

I am glad to see that Congress is ignoring 19 top trade group’s letter demanding an end to rampant oil speculation

Also I  am happy to see that the Media did not report it as I  desired.

But how do I corner the oil future price up very fast ?  fast enough in time so not to get caught ?

Answer 5

Because the speculators only have to put up 5% cash to "bet" on the price going up or down.  If they were required by law to put up more, instead of just "paper" they would have to risk a lot more and subsequently wouldn't be so cavalier about betting on prices going up because if they did and they were wrong, they would lose all their cash.

Answer 6

Speculation is the same as gambling. The price that speculators pay is what they think it "will be".