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Originally Posted by attaboy  Basically the 40 page report says the world economy has grown at a rate of 5% a year for the last 4 (or 5) years without a corresponding increase in oil production. I don't know how this can be with Russia expanding its oil production are other countries slacking off? The report also says concerning specualtion there were actually more short sales of oil then there were long buys. This I don't understand. There is always another person on the other side of the transaction. For every seller there is a buyer and vice versa. The oil speculator sideshow - Jul. 24, 2008 newsroom/documents/file/itfinterimreportoncrudeoil0708.pdf] Inter-agency report pdf. |
I guess everyone needs to find reasons for things based on how they can process information. This supply demand stuff, this big car little car stuff, it's all meaningless, but it helps sell newspapers and allows people to believe they are informed.
The fact is that every month individuals and funds have been buying at the ask oil futures and rolling out futures they already hold. The fact is that's illegal if that causes you to have a too great a position in the market. The fact is many of these funds have ilegal positions. The fact is that the US Congress just passed legislation creating punitive measures for these funds noncompliance. The fact is these funds now here regulatory footsteps and are getting in compliance FAST and there's more unwinding still to do.
Those facts have nothing to do with what the true price of crude ought to be based on supply/demand. That willbe known later after this buyers only market gets regulated. It's possible it will lead to even higher prices, but I very much doubt it.