Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Tue Jul 15, 2008 3:19 pm Post subject: Oil Prices and Speculators / Investors
To all those who say that the current run up in Crude Oil prices are not the because of the Speculator/Investors, here is an AP Article that I read at Yahoo Finance
Quote:
Light, sweet crude plunged $6.44, or 4.4 percent, to settle at $138.74 a barrel in an extremely volatile session. Prices at one point plummeted more than $10 from the day's high.
Mounting concerns about the risks inflation poses to the United States, the world's biggest oil consumer, helped spark the declines. Analysts also attributed the sell-off to Thursday's expiration of options contracts, which tend to increase volatility, and to computers programed to automatically sell once prices reach certain thresholds.
"There was this big ... selling pressure when prices dipped below $140 a barrel. It got a lot of bulls very nervous," said Tom Kloza, chief oil analyst at the Oil Price Information Service. "If it was a fire, you'd call it an accelerant."
So now I ask, are those who are actually using the Oil to make plastics, gasoline and other products selling off their inventory or is it the investor/speculator who is just "holding" long positions selling? _________________ Every action has an opposite and equal reaction.
"Can I have a cheeseburger with no cheese?"
- Heard at a local Jack In The Box
Posted: Tue Jul 15, 2008 3:54 pm Post subject: Re: Oil Prices and Speculators/Investors
I saw a comment somewhere today that the drop in oil was due to banks selling long oil positions to raise capital...
which brings up a couple interesting observations-
a) the banks know going long on oil is smart
b) they arent selling because of current_event_01, they are selling because they need cash.
so you have Specualtor A who is long on oil because he KNOWS where oil is heading long term.
and you have Speculator B who THINKS oil is heading up long term but may change his mind whenever a current event scares him.
My guess is that the majority of oil speculators are A and arent changing their positons. My thinking is that this category isnt causing the price to fluctuate because they are a constant part of the price equation from here on out.
Speculator B may cause some minor ups and downs but not to the extent people are screaming about.
Of course this is the plateau before the decline- there's still a lot of denial and guessing. Once the decline becomes evident to all, we'll see the real impact of "speculation" on oil prices. Assuming things hold together that long...
all just my opinion, this isnt my area of expertise by a long shot. it is interesting though _________________ "The future power is manpower"
Posted: Tue Jul 15, 2008 5:26 pm Post subject: Re: Oil Prices and Speculators / Investors
It was Bush's speech.
I guess if you say "OCS" and "drilling enough", you'll spook some longs out of the market.
Don't worry, it'll work it's way back up.
Watching Bush's face when the reporter asked if prices would come back down should have told everybody that. _________________ Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.
Can someone explain its content to me better please...
What i get from it is that its impossible for speculators to drive prices too much outside of its proper price band due to the fact that someone has to take delivery at the end of the month.
I guess that you could have price volatility mid month (trading in and out of the market, day to day) due to speculators who dont plan to take delivery but in general the price should reflect its true value over a larger time scale (month to month).
Last edited by no_name on Fri Jul 18, 2008 6:44 am; edited 1 time in total
Posted: Thu Jul 17, 2008 1:53 am Post subject: Re: Oil Prices and Speculators / Investors
If you're a speculator and you do not sell before the contract matures then you have to take physical delivery. Then you have to pay the cost of storage and insurance as well as fund 100% of that long position instead of just buying the futures on the margin. Storage may be full. If you're buying gasoline or heating oil they have a limited shelf life. So assuming you're a paper speculator and have no intention of taking delivery then you sell your long ahead of maturity.
+1 - 1 = 0 extra demand
The only difference between long-term buy and hold investors and short-term buyers and sellers is that the short-term speculators add liquidity to the market, while long-term investors take liquidity out of the market. As every futures contract has a buyer and a seller the long-term buyer essentially sidelines one willing seller.
If the long-term buyer continues to roll his long position forward he takes liquidity out of subsequent future's months along the curve. Forward prices are a function of spot prices and vice versa due to the cost of carry. If they get out of line with one another then physical players can and will arbitrage the market to bring them back into line with one another. Those with the pipes and storage can play the cash market and the futures. Paper speculators can only play the futures. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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