Replies

Index Speculators are a cause of higher oil prices because they are unique in that they have taken possession of the commodity and held it, something never done before by the traditional pit traders! What the amount is, is anyone guess. I know during the fall 2006 non-hurricance oil speculation bust gas dropped 75 cents to $1.00 per gallon.

However, you are still right!!!! the underlying problem is that congress has de-commoditized oil by making it scarce. If Clinton had signed ANWAR and the US was 2 years into the continental shelf, do you think any speculator that was not clinically insane would take possession of oil in the hopes of dumping it later for a profit? HELL NO!

If you want to put the index speculators out of business, make oil a commodity AGAIN!!!!! In a way these guys have actually helped US.... Instead of gas creeping to $4.00 a gallon as the liberals wanted, it accelerated to $4.00. Hopefully this will wake up the American people to understand that drilling has to be a part of any energy plan.

If you want to put the index speculators out of business, make oil a commodity AGAIN!!!!!

Hate to burst your bubble. If you drastically increase supply, you only put half the speculators out of business. In commodities trading, if someone buys an oil contract, someone else had to sell it. Now, if the market goes up, the buyer makes money and the seller loses money (margin calls have to be coughed up by the loser, not to mention the asset has lost value as well). If the market goes down, the seller makes money and buyer loses money on margin calls and loss of asset value.

IOW, if you dump a bunch of oil on the market, the speculators that are long will get smoked, to the benefit of the speculators that were short.

Index Speculators are a cause of higher oil prices because they are unique in that they have taken possession of the commodity and held it,

Really? Where are they holding it?