NOWHEREMAN

The Effects of Oil Speculation

The famous words "it is a zero sum game".

If there is a "seller" but no "buyer" the price wanted will go unfilled until the Seller reduces the price to a Level the Buyer is willing to pay.

If there is a Buyer but no Seller, the Buyer will increase the price offered until the Seller agrees.

The actual trades can be speculative, can be hedges by producers to prevent shortfalls in the future like crop insurance or raising money to mine/drill/grow in a program of expansion.

Lets say speculators are driven from the Market. Who will be left to make the Market? Eliminate a category entirely without a replacement mechanism? No one will want to pay more and no one will be willing to sell for less.

Will these Markets disappear here and go overseas where there are mechanisms to take over the reins like The MidEast Oil Market.

If Speculators could move the Markets like everyone presumes, No Commodity would ever go down or up if they so chose.

Commodities go up in price because somewhere along the chain someone takes physical delivery.

Instead of blaming the Speculators in the Oil Pits, Blame the ETF's some of whom take the commodity off the market, like gold for instance. But, guess what, there is NO ETF in OIL which takes delivery.

Oil is traded in a grade which is in very short supply in a world awash with other grades that would be considered ample if anyone could actually use them. Otherwise they could just as easily be left in the ground.

China Is A very forward looking nation which is buying the sour/heavy grades as well as the medium and light. The sour/heavy are going into their Petroleum Reserve for use when they have built refineries capable of handling them.

We are doomed because the Tree Huggers are held in higher regard than the health of our Economy.