King of Sanity

Economics of Oil Futures Trading, Part I

I cannot see any justification for the price of oil whether it be instant riches for speculators or CEO's needing to buy an extra chalet or two in Aspen. One day we hear that there is a shortage in supply due an ongoing ever increasing demand that is driving the price through the roof. The next day we hear that demand is down in the US, but China and India's demand offsets any drop in US demand. Then the next day we hear that although demand is down in the large industrialized countries, refineries do not have the storage capacity for increased supply thus creating a shortage of supply. It sounds like if one excuse is spot lighted, another pops up in attempt to justifiy the high prices. It sounds like when you catch a child in the act of doing something wrong, they instantly come up with another excuse to stay out of trouble. I hope that OPEC and the Saudi's flood the market to the point where the bottom falls out to the tune of $40.00 for a barrel of crude and all of the greedy speculators get burned to the point to where they will keep a safe distance from bidding on oil futures for a long, long time.