Oil: will speculators lose their shirts?

June 4, 2009

Rice University’s Baker Institute Energy Forum Director Amy Jaffe says, like many other analysts we’ve spoken to this week at the 2009 Reuters Global Energy Summit in Houston, the supply and demand fundamentals for oil are not in sync. But, will oil investors continue to push prices higher through the end of 2009? Or, will they lose their shirts come December? Check out what she had to say…

What will drive oil prices for rest of '09? from Reuters TV on Vimeo.

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Would that be a bad thing? The latest figures of the port of Rotterdam show that almost all of its immense oil storage facilities are filled to capacity. Low demand and high prices, a sure recipe to get your behind burnt.

The reason why supply and demand in the oil industry is out of sync is because sevaral dubious, outside, huge-money, investment firms started buying up millions of gallons of oil on the market that usually only serves the actual local oil dealers. But something strange started happening last year as the election hype started heating up. There suddenly were a whole new breed of oil futures “investors” who invaded that market, buying up oil futures so rapidly the folks in Saudi Arabia were dumb-founded. Let’s refer to these investors, especially their brokerages, as the “greed-breed oil futures investment gamblers.” These oil investors, especially the ones who went the “dark market” route, thought they were going to take advantage of the election’s “green” go-hug-a-polar-bear-in-Alaska propaganda and invest in oil futures in light of the fact that the ultra green lobbies were dead-set against drilling new wells and openning new refineries in the US…And their green candidates were gaining the lead. So, over the summer, last summer,they bid up the price of oil till the American public could no longer afford to drive to work! By fall everyone was screaming!Then Congress let on that they were going to investigate. Of course, the actual investors who had poured millions into the oil market then made a run to pull out all their ill-gotten gains. Then of course, this run on these stock brokerage firms caused the near collapse of many of these very same investment companies/gamblers. And.. Yes, those are the same bunch we “had to” bail out first after the election.

They didn’t care for the average Joe who got to the point where he couldn’t afford the gas/oil price hikes, nor did they protect their investors from risky investment stratagies. Nope, easy money ruled thier consciences!And these are the folks who wanted US to feel sorry for them?

This is why the future of oil is now unpredicatable…. because the oil market was being manipulated by creeps!

The run up in oil prices in the last few weeks is ridiculous. There is NO reason for the price hikes we’ve seen. Pure speculation is driving prices higher. I hope everyone involved in driving prices to artificial highs get burned when fundamentals take hold! Oil speculators greed is the same type of greed that put the whole world in the economic mess we are in now. Why not be less selfish and more intelligent?

Posted by Brian | Report as abusive