Reply #41: What does the price of oil have to do with oil tankers?

[protocol rv]

Very little. Speculators, one may say, provide market liquidity and insurance. As I mentioned before, they do cause a slight feedback loop effect, but anybody who thinks they drive the price up, is free to bet on a lower price, and drive the price down. And this is exactly what happened in 2008. Those who bet for the price drop made a very handsome profit.

The swing in 2008 was caused by a very unique set of circumstances, an oil shortage followed by over supply as the US economy crashed due to poor regulatory practices.

If you want to point fingers at price swings, point it at the Americans who drive those very large vehicles, all by themselves. USA should have more rational energy policy, including a nice fuel tax, about $2 per gallon, to make the American public save fuel. But we know it's difficult to expect a rational economic policy from the US government, don't we? They spend too much, tax too much in the wrong places, and they have created a byzantine system.