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Everyone gets in an uproar about oil speculators pushing prices up. No one gets upset when they push them down. In the end I think speculators have very small long term effects on average price of oil. Short term it gets pushed around up and down and it balances out in the end.
"The recent fall in the price of oil has been partly caused by speculation in the oil market, Abdalla Salem El-Badri, Secretary-General of the Organization of the Petroleum-Exporting Countries (Opec), told CNBC Tuesday.
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"Speculation has just taken a huge chunk off the price," El-Badri said, after US crude futures fell to near a three-week low Tuesday morning.
"There are a lot of factors in the price we're seeing but one of them is speculation."
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Small retail traders are not the issue. OIL should be limited to bonafide Hedgers over a certain amount and I think the big issue is several firms have 'waivers' to trade unlimited amounts of ES, CL etc..
We fix that along with our political system and we have a winner.
Problem is bluemele once they start regulating it I am convinced they will ruin it for the small traders. The big guys will always find a way around any regulation and the small guys get left holding the bag. That being said I wish politicians would just leave it alone.
I also believe the large players are subject to overall supply and demand. They make the ups and downs larger. But the ups offset the down and the downs offset the ups. So in the end I don't believe it effects the end user over time that much. At times we pay more than we should and at times we pay less than we should.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
I agree on the longer term that yes, the big guys move markets further and deeper. However it is a matter of 'perception' in my opinion.
If speculators show a certain basis of trading contracts and that spikes during times of increased pricing people draw conclusions that it is the speculators. I for one do believe that GS and other firms are a large part of the issue.
Also, 'changing' the rules isn't the case. Bonafide Hedging is a requirement for all FUTURES markets and those 15 or so firms were all granted 'waivers' back in the day through corrupt politics.....
Basically these firms had made there way into the SEC/CFTC and have changed the rules with few noticing.
So... When the news media comes out from a reporter who doesn't know shite about shite and they write that speculators contracts have gone up to x% of the overall market then yes, it does have an effect.
Just my 2 cents... The issue though is that the large speculators will probably be left in the game with the small ones' taken out.
this is not for arguing, only the view from the other side:
if speculators wouldn't have pushed the price up, there would be no need to push it back down. either way, lovely play field for some "speculators".
you say: "At times we pay more than we should and at times we pay less than we should". what would you say was the last time we payed less than we should? or with other words, how do you determine what a fair price is? is today's price (~87) too low?
I would like to see 300.00 and keep it there for at least 3 years.
Yes, it would be the next great depression, etc.. Yes, it would wreak havoc, yes it is lunacy.
I see no other way to ween the babies off the oil.
I think we all agree that having oil in our lives is both good and bad. Having it as a primary source of transportation and commerce is well.... Challenging...
Couple years ago oil went under $40. So for a time we enjoyed low gas prices that speculators played a partial role in making happen if you believe speculators influence the market in a large way. I am not saying that is a fair price or $140 is a fair price. We all know the producer nations manipulate price of oil by restricting supply and opening up supply. It was obvious though based on the mean so to speak $140 was to high as was under $40 to low a few years back. What price should actually be depends who you ask. They have a much bigger effect on price than speculators. I do not believe speculators set the trend at least in long term they speculate based on market factors. Take them out and my bet is you would still have big swings. Take them out and the big producer nations might even have more control to manipulate the market.
I am not saying speculation has no influence on the market. I am saying they tend to ride trends setup up by the market itself and often push them to extreme both ways. The push to extremes means there are times we all pay lower and there are times we all pay higher.
My other point is if regulators move in the big guys who possibly do things in a questionable way will find a way around it. While the small guys will get saddled with regulations that may keep them out of the game.
Just all my incoherent opinion.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
again not trying to argue. but looking at the chart and remembering the huge financial crisis and the global meltdown we had at that time, I would say $40 was not necessarily cheap.
but again, that move from $50 to $150 and back down to $40 is very questionable imho.
Sure thing appreciate your comments. I think it was moved by speculators over shooting reality but it found its mean.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
