solar jim

Investing in Oil Prices, Not Companies

To Michael Levy:

If speculation is the reason oil is going up then at some point people would have to take actual possession of the good and continue to keep taking it off the market and continually reduce the total supply enough to actually raise prices over the amount actually produced by hoarding it somewhere. Please show me where these extra barrels that speculators are buying are being stored - which costs still more capital.

The fact that people don't want to address is that the US dollar has decreased in purchasing power under the Bush administration. As oil is priced in dollars and these other sovereign nations (middle east) want to have the same purchasing power as before the price goes up as a reflection of that fact.

China and India are growing at a very fast pace. The US and other devloped nations can do little to stop the rise in energy costs by raising interet rates so long as China, India, Brazil, etc... keep growing as fast as they currently are. If the major users, and buyers, are these fast groing counties that don't have a problem continuing to buy and push up rates then everyone else gets to join in for higher prices.

If this doesn't make sense then get ready to keep paying ever more over the next decade, or two, and have no idea why prices keep going up.