Comments on: Fascinating debate on speculation in oil http://catstockblog.com/2009/01/fascinating-debate-on-speculation-in-oil/ Caterpillar Inc. (NYSE:CAT) stock news and links Sat, 19 May 2012 11:37:00 +0000 http://wordpress.org/?v=2.6.5 By: Mahkno http://catstockblog.com/2009/01/fascinating-debate-on-speculation-in-oil/#comment-112 Mahkno Thu, 15 Jan 2009 17:45:01 +0000 http://catstockblog.com/?p=782#comment-112 I think when they talk about 'speculators' they are talking about people who are simply trading in the futures contracts for the sake of the margin gain and have no other vested interest in the resource. I think when they talk about ’speculators’ they are talking about people who are simply trading in the futures contracts for the sake of the margin gain and have no other vested interest in the resource.

]]> By: Tom Mangan http://catstockblog.com/2009/01/fascinating-debate-on-speculation-in-oil/#comment-111 Tom Mangan Thu, 15 Jan 2009 15:59:36 +0000 http://catstockblog.com/?p=782#comment-111 The other problem with blaming "speculators" is that pretty much all commodities are bought and sold on futures markets and every contract purchased is a zero-sum equation with a winner on one side and a loser on the other. Everybody in the futures markets is a speculator. Oil was the last surviving bull market after the autumn of 2007, creating a blow-off top as shorts and longs fought it out to make sure somebody else was the greatest fool. Clearly the last phase was a speculative bubble in the first half of last year. But regular market participants -- people in the business of delivering petroleum -- also have to swim in these shark-infested waters and many must be tempted to play along while the going's good. The other problem with blaming “speculators” is that pretty much all commodities are bought and sold on futures markets and every contract purchased is a zero-sum equation with a winner on one side and a loser on the other.

Everybody in the futures markets is a speculator.

Oil was the last surviving bull market after the autumn of 2007, creating a blow-off top as shorts and longs fought it out to make sure somebody else was the greatest fool.

Clearly the last phase was a speculative bubble in the first half of last year. But regular market participants — people in the business of delivering petroleum — also have to swim in these shark-infested waters and many must be tempted to play along while the going’s good.

]]> By: Mahkno http://catstockblog.com/2009/01/fascinating-debate-on-speculation-in-oil/#comment-110 Mahkno Thu, 15 Jan 2009 15:40:02 +0000 http://catstockblog.com/?p=782#comment-110 There have been articles in the Financial Times (print edition) debunking the claim that speculators were the principle driver in price run up. What they found after looking more closely is that the principle driver were refineries trying to ensure and lock in supply due to increasing demands. Which if you have demand as your principle driver in price, makes sense. No doubt speculator's were very active in all of the trading but the big boys were indeed the refineries. There have been articles in the Financial Times (print edition) debunking the claim that speculators were the principle driver in price run up. What they found after looking more closely is that the principle driver were refineries trying to ensure and lock in supply due to increasing demands. Which if you have demand as your principle driver in price, makes sense. No doubt speculator’s were very active in all of the trading but the big boys were indeed the refineries.

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