Thank the Wall Street speculators for high gas prices

So, experts who have worked in the financial end of the oil industry for decades, the U.S. Energy Information Administration, the Saudis, President Obama, and the Commodity Futures Trading Commission are all full of crap and don't know what they're talking about when it comes to the role of speculators in artificially inflating oil prices, in a time of lagging demand and ample supplies?

Interesting.

 

Here's the thing, profits are only on paper until you close out of your trade.

Every "speculator" who goes long crude oil futures has to eventually sell their position to take their profit.

If the market overextended itself, due to speculators, it might spike higher, but would eventually settle off to a fair price. And then, the "speculators' would get killed when they all tried to dump their positions.

The fact this hasn't happened is evidence in and of itself that oil is trading at a fair market price.

The only way for "speculators" to keep the price high would be for them to keep buying. That's not sustainable. You end up with a huge position you can't get out of.

 

And, if you think big speculators never get fucked trading energy products, google Metallgesellschaft AG.

They lost big.

 

Could we just re-title this "Baiting Ragu."

 

^^^^^ That's brilliant. If a bit short-winded.

 

Goldman Sachs Admits Record Speculation To Blame For Skyrocketing Gas Prices

By Brad Johnson on Apr 13, 2011 at 10:45 am

Saying that “net speculative positions are four times as high as in June 2008,” investment banker Goldman Sachs “issued a warning that the price of oil has grown out of control due to excessive speculation.” The world’s largest commodity trader, Goldman Sachs told its clients that it believed speculators like itself had artificially driven the price of oil at least $20 higher than supply and demand dictate. They even admitted that their work to drive up prices has harmed the American economic recovery, pointing to “nascent signs of oil demand destruction in the US.”

 

Clearly speculative trading has been a factor in price rise of oil

 

Matt Taibbi kicked ass on this in Griftopia:

http://books.google.com/books?id=sWh4w7na6ncC&lpg=PP1&dq=matt%20taibbi&pg=PA124#v=onepage&q&f=false

 

Take Ragu's word for it. No need to check his work.

 

I'll be glad to check out any alternative scenario anyone wants to float. Well, anything other than, "Ouch, this hurts. Somebody I don't like must be at fault."