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Suspicious minds
**helen**
Deactivated Posts: 9,235 Supreme Poster
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We recently had a terrorist poet locked up ffs!
Unless of course your talking about the real terrorists who are cuasing hunger on a mass scale ...starvation and death ...and forcing your electricity gas food and travel bills up.
I'm talking of speculators.
If they weren't speculating the price of oil would be around $60 a barrel.
Are any other group of people causing this much misery ...hunger death poverty?
These guys make the preacher with a bomb look pretty insignificant to me.
I think i'd rather be attacked by a mad Mullah than a guy in a suit right now.
To be fair, we've already got a thread on it.
It's one of those things we'll never agree on.
oil speculators are an easy target but there's more to it rolly, oil is at $135 for several reasons:
- huge foreign government subsidies effectively capping domestic prices in places like china and india, this is done to keep a lid on inflation which is already rampant, and to keep the economy growing and the peasants happy. so whilst americans are suffering at the pumps the chinese are still importing SUVs by the truckload because their petrol prices have been effectively frozen since last november, which is obviously distorting true supply and demand market efficiencies. in fact just yesterday the chinese gov announced a petrol and diesel hike of 16% and 18% respectively, which will have a load of nasty side effects for the global economy, but is bearish for oil in the intermediate term as unnatural demand gets crushed. especially if/when other asian govs follow suit, malaysia is nearly bankrupt as a result and india's not doing too well either.
- weak dollar caused by the FED and US treasury's reckless fiscal policies has sent the $ crashing, esp in the last year so everything priced in $ goes up.
- foreign central banks / SWFs / global investors holding huge $ reserves are watching said currency depreciation destroy its value, and are hedging off that risk through investing in commodities which are seen as the most tangible asset to preserve value right now, especially as global credit, stock and real estate markets aren't safe anymore. this sector and asset rotation is also partly why wheat, rice, corn etc are in a huge bull mania and why a loaf of bread costs so much more at tescos.
that's all before you even consider the possibility of peak oil, which is gaining credibility and just the perception is causing even bigger price speculation in longer term oil future leap contracts, which doesn't bode well for the global economy
with the israel/iran shitstorm about to kick off and chavez threatening to turn the taps off everyone's a bit jittery about further supply issues. hell oil jumps $5 everytime someone farts too close to a nigerian pipeline these days.
oh well at least it's an interesting time to be alive! terrorism is just the latest distraction to keep people from looking what's really around the corner....
Yeah I did realise that after I posted.
iran have always had problems refining their crude because they don't have the capability themselves, plus simple refineries are actually being hit by lower margins on heavy crude because of fuel oil (see below)....it's probably this stuff sitting around in tankers that they can't shift.
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=223833&version=1&template_id=48&parent_id=28
The price of fuel oil, the lowest-value major product of the refining process, has failed to keep pace with soaring crude values on falling demand, in turn curbing refiners’ appetite for the heavy Gulf grades that yield more of it than lighter crudes.
“Those who have cokers and can refine heavy crude are enjoying their crude. It’s the simple refineries that are struggling with low margins,” a source with a Middle East producer said.
I can't find the link i had i'll try blater.
It said it is storing sour ...crude ...i aven't a clue what that means.
Interesting post by the way ...thanx.
http://www.theoildrum.com/node/4038
http://www.marketoracle.co.uk/Article645.html
ETA: that's not to say that hedge funds and investment banks aren't driving up the price btw...there is definitely a speculative premium on the current price due to asset rotation out of stocks / credit derivatives / real estate as mentioned above.
http://www.tickerforum.org/cgi-ticker/akcs-www?post=48960