So oil is being jockeyed by folks who are doing nothing by speculating about what might be instead of what will be or what is. All the while it is lining the pockets of the rich, feeding those middle class citizens fortunate to have bought in at the right time and disabling the rest of us. I mean, 90 bucks to fill my tank four times a month adds up, and that is just to work. I have another means of transport but can't ride in the rain. I am fortunate that as the weather gets better I can use my electric scooter, but many folks cannot or do not have the means to do this. While I will feel alleviated by the lesser expense, it makes it difficult to do any extracurricular activities, which is part of what drives the economy, vacations.
With my boat dry-docked and my truck tank empty, which is most likely similar scenarios to much of the US, I must seek local means to vacation, such as back-yard play. A time when most people are trying to get out and do things, a time when many businesses are waiting for to make their months go by in the black, will undoubtedly be soiled by a bunch of greedy speculators.
Yet the news points out that China's economy IS slowing, Saudi has said that they will increase their production to 12.5 Mill barrels to cover Iran, and Kuwait has stated that Iran WILL NOT block the waterways. This should alleviate the panic over oil, yet it hasn't. And CNNMoney has the audacity to state that Index traders have nothing to do with the oil prices being elevated, citing that if they were, the stockpiles would increase. The author of the article (which can be found here http://finance.yahoo.com/news/speculators-not-behind-rising-oil-152600223.html) Craig Pirrong, used several points in commodities history where groups elevated prices, stating that those individuals wound up with large quantities of those commodities, from tin to grain and milk, that no one would buy. But his comparison is about as relevant to oil as my desk is to his computer, no real connection.
Oil, as a commodity, much like natural gas, enjoys a unique advantage over all other commodities, it will always be bought and sold, no matter the price. It is the lifeblood of the world and is what makes our modern luxuries possible. While we are making efforts to create a world where oil is not this riches producing substance, that time is far off.
No matter what happens to the oil, we must go to work, which means we must buy gas. We must heat our homes, which means we either buy heating oil/natural gas, or we use electricity, which burns oil, or coal, or natural gas. The complexity of oil, the amount of products we get from it and use daily, means it doesn't follow the same guidelines as wheat and tin. The fact that the author of that article is working as a monetary "expert" shows the lack of knowledge his employers have in his true ability. I will tell you these are all my opinions; he will tell you they are fact.
Fact is, the items posted in the article, the comparisons he uses, display incoherent thought when it comes to financial matters.
The speculators are one of several DIRECT causes of the oil prices sky-rocketing, just one of a few, another being the OPEC and their drive to increase the oil so they get even richer. People stated that the War in Iraq was about oil, yet, where are the oil prices at? Perhaps it was about oil; perhaps it was about something else entirely. Who knows, maybe there really are WMDs that just haven't been located. What I know is that if it was about oil like so many were saying, we wouldn't be paying nearly four bucks a gallon right now.
The world needs to get the oil under control before we enter into another recession, or before the average Joe just says F* it and we enter another GREAT depression.
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