Study links oil prices to investor speculation

[NoGOPZone]

Source: Associated Press via Yahoo! News

Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday.

The report by Masters Capital Management said investors poured $60 billion into oil futures markets during the first five months of the year as oil prices soared from $95 a barrel in January to $145 a barrel by July.

Since then, these investors have withdrawn $39 billion from those markets as prices have retreated dramatically, the report said. Oil traded at about $102 a barrel Wednesday on the New York Mercantile Exchange.

"We have clear evidence the fund flow pushed prices up and the fund flow pushed prices down," said Michael Masters of Masters Capital Management, calling the amount of money moving into oil futures markets by large institutional investors in the early part of the year "way off the scale."


Read more: http://news.yahoo.com/s/ap/20080910/ap_on_go_co/oil_speculation

[redqueen]

1. Well isn't that interesting...

[liberal N proud]

2. NO FUCKING SHIT!

It took a study to figure this out?

[nvme]

3. I hope Barack runs with this one

I saw that on msnbc. Its what the dems knew to be the truth. Supply and demand did not play in this past years markets. Pure manipulation on the hedge funds parts. Enron loophole strikes again.

[truthisfreedom]

19. I hope he runs with it and calls it what it is... a TAX on the AMERICAN PEOPLE benefiting the ULTRA-

RICH!

[Raster]

4. And there were those on this board that vehemently insisted speculation had nothing to do with the

f'ing surreal oil and gasoline prices. What we are witnessing is PRICE GOUGING and WAR PROFITEERING on a massive scale.

Don't look now, but the Texas Petroleum Mafia and their Wall Street accomplices STRIKE AGAIN!

Wake Up, America!:kick:We CAN Do Better!

[chill_wind]

5. You beat me to it. (the vehement DU deniars).

[Trillo]

8. If this "price gouging" and "war profiteering" were considered as TAXES

(ignoring momentarily that any profits from such are "privatized"), then what is our true tax rate?

[chill_wind]

6. K & R

[intheflow]

7. Ya think?

:eyes: 5th rec.

[chill_wind]

9. I hope Obama gets ALL OVER this headline in the next couple days!

[LonelyLRLiberal]

10. There were Congressional hearings on this a couple of months ago.

They had financial experts and oil and gas experts testifying that oil prices would drop drastically immediately if Congress made speculation of this sort illegal.

[APPLE_PIE]

11. It's not always what you think.

In a fair market there is a buyer/seller pair for every trade. The seller accepts what he/she considers a fair price for his/her goods and the buyer pays what he/she considers a fair price for those goods. Buying and selling doesn't move the price up or down. What people are willing to pay for when buying or accept when selling is what moves the price up or down.

In Roman times they used to roll the astroligi ( or hand carved dice ). Being hand carved they were imperfect and consequently when rolled one side would come up more often than the other. One betting system to exploit this called for one to bet on what came up last as what would come up next. Because the dice were biased this was a winning strategy.

Any system where human beings are involved has this same bias and can be exploited. It is exemplified by the old mot "Going with a winner".
Stock chartists look for new highs as entry points and look for new lows as short selling points.

Price inefficiencies have to be exploited. That's what fair markets do.

Where the problem lies is not with the Speculators but those involved in actual price fixing. It is easy to visualize where two or more parties agree to buy and sell to each other at higher and higher prices until they can't raise the price any more. Normally then by agreement, THEY EXIT, at this time, prices start falling, and it's everybody for their selves as prices crash.

But don't be alarmed, they do the same thing with Sports Cards/ Art works/ collectibles of all sorts.

Forget the speculators and screw the price fixers.

[mbperrin]

16. In this case, it's exactly what we think.

No products are bought and sold - just gambling by schemers who get out at the top and leave the rest of us, who actually need real oil and gas products, holding the bag. A "fair" market has to meet several requirements, including perfect knowledge of the market by all participants, and this fails that test alone, never mind the nothing else changes but the one variable, and no individual buyer or seller is large enough to sway the market. This thing can't come close to a "fair" market.

Bout time to call up old Judge Lynch. Worked with Mussolini, another great corporate fascist.

[mzmolly]

12. "DRILL HERE DRILL NOW?"

:crazy:

[Tempest]

13. You didn't need a study to tell us that

All you had to do was to follow the trading.

[Ian David]

14. As published in, "Duh! Magazine," with a grant from "D'ja THINK?" Corporation.

Phil Gramm's Enron Loophole.

[pattmarty]

15. Good. Now let's finally move to regulate these fuckers.

[DangerDave921]

17. DUH eom

[Psst_Im_Not_Here]

18. Yahoo, buzz it up, rate it high, and email it out

get it to the top of the listings. If you don't have anyone to email it to, email it to yourself.

[Heywood J]

20. Surprise, surprise.

Someone made massive amounts of money by gambling on raising the prices for an essential commodity used by all. That should be criminal.

[FreakinDJ]

21. Just email it to the idiot news media who is still not reporting it

[Waiting For Everyman]

22. K&R The little-believed fact, so true!

[Domestictalent]

23. I've been saying it all along

Regulations must be put in place against speculator. This isn't simply a case of international market fluctuation.

[Trajan]

24. Actually: They DID need to do a study like this ....

Because the sheeple dont believe it if you just say it ....

Many wont believe this either, but it's a start ....

[indypaul]

25. And recall it was named the "Enron Exemption"

Compliments of one Senator Phil Gramm who continues to be
one of McCain's economic advisers.

[FreakinDJ]

26. Don't forget to rate the story #5

[bluesmail]

27. Anyone here surprised? n/t

[AlphaCentauri]

28. I knew this long time ago

but most people were blaming the producer

[not fooled]

29. So how dumb...

...does one have to be to believe McCrap's pro-drill propaganda?

Pretty darn stupid, in my opinion.

How much coverage will this study get vs. the rabid "drill drill drill" propaganda??? :grr: :puke:

[indepat]

30. But, but, but I head Secretary Paulson say the price of oil was all due to supply/demand issues,

not speculation, and shortly afterward heard Joe on CNBC's Squawk Box repeating Paulson's words as fact. Can it be we cannot trust everything the WH and their corporate media shills say. :shrug: :P