Are Oil Prices Rigged?

ki11ercane · Posted: Sun Aug 24, 2008 11:34 pm Post subject: Are Oil Prices Rigged?

Found this link on sensibleerection.com, one of my regular haunts.

http://www.time.com/time/business/article/0,8599,1834888-1,00.html

mefistofeles · Heavy Crude Joined: Mar 21, 2005 Posts: 225

One of the guys who wrote this essay is "studying" financial mathematics. I thought about getting an MS in financial mathematics myself and I can assure its certainly not the real thing. In fact look at the subprime mess, I figured it out long before the quants, and these guys had real math degrees.

The idea that the oil producers can use speculators to distort the markets is ridiculous. Look at the world pre 9-11 2001, oil prices were consistently $20 a barrel. If these oil producers have so much power why did oil prices remain so low for most of the 90's an into the begining of 00's?

These have forgotten the fundamental rule of economic systems: money talks. The markets are not a democracy and the money votes not the people.

If we don't allocate oil through pricing then it would be done through socialism, of course since most of the oil the US uses lies outside of the US it would probably have to allocated at gunpoint if we didn't use the markets.

Even if they are right if speculators push the price of oil too high everyone will want an oil well in their yard and more oil will be produced as the price goes up.

Also another idiotic thing is that if Russia and OPEC want to squeeze the consuming nations they can do it easily, without any recourse to anything like traders, just work the pumps at a slower rate. We're just lucky that they have decided to maintain current production levels.

Its no wonder that Time is losing circulation what a poorly written article.

Buggy · Heavy Crude Joined: Jun 23, 2008 Posts: 149