Why all the speculator bashing? What do they do that's wrong? Illegal? Here ia a post of mine from a few weeks ago, tell me where I'm wrong.
I was with you until the speculators comments. Speculators don't cause prices to rise they just precede the rise and sell when the rise stops, actually speeding the fall, as well a the rise. They also hold and sell, offering oil to end users and reducing hoarding by them. All oil is a commodity sold at market prices no matter who holds the paper. I don't think they change the market prices much and seem to stabilize both price swings and availability
Mike;
We have indeed discussed this before.
First: Let me say that I don't think there is anything illegal about it. It is capitalism in action. Just like the price of electric generators can be expected to rise during hurricane season.
If all "speculators" did was hold and sell; smoothing the markets by holding/releasing oil (for a suitable fee), then yes. . .they certainly would be stabilizing. Especially for "availability".
I think part of the problem is that there is a suspicion that some speculators are not industry specialists, but rather opportunists that normally DO NOT buy oil, but are buying now at $100/barrel hoping to resell at $120. If this was happening, then what you would have is actually an increase in demand during times of crises, which magnifies the applitude of a supply driven price fluctuation.
Now. . the fact that gas at my two local gas stations rose 5 cents yesterday and 10 cents today. .that's not merely speculators at work, right?
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