Stop Me Before I Vote Again

I wish somebody would explain to me, in terms adapted to the meanest intellect, exactly how placing bets on oil prices drives up actual oil prices. Everybody seems to agree that it happens, and I defer to superior wisdom, but I don't get how. Unless oil is actually being held off the market somehow...?

... but yeah, I love high oil prices. I just wish they were high for a better reason (like say a carbon tax).

MJS: My understanding is that as supplies become more constrained, the pricing becomes more subject to manipulation. Note that Big Oil is closing, not building new refinery capacity? That's because they know supplies are going to become more "variable" over the mid-to-long term.

"Let them ride bikes"? Nah...modified dune buggies as we tear through the desert under the command of Humungous calling out in Strine. Would op make a good Humungous? Probably not...too cryptic, not inspirational enough. LOL

as supplies become more constrained, the pricing becomes more subject to manipulation

As for Humongodes -- Owen would make a better Ayatollah of Rock and Rollah than I would, but neither of us is the ideal candidate.

Speculators can't do much to prices. Everyone who bets that prices will rise needs someone to take that bet. Put another way, if I bet $X, someone has to bet not $X. Interestingly, no one is complaining about speculators driving up stocks or driving down the interest rates on Treasury bonds. Does JP Morgan not trade stocks? LOL

Since oil is difficult to withhold from the market, and since oil is produced, refined, sold, and used all over the world, it's pretty tough for speculators (or the President or much of anyone, really) to control the price of oil. The general price trend since 2005 has been up, since the world's poor are outbidding the world's rich, and humanity can't get oil out of the ground any faster. $5/bbl up or down misses the real problem.

jersey

such a fabulous boat load of
embarassing half wit thought chains there

i'm surprised you provided them so eagerly

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samplings:

" Speculators can't do much to oil prices"
what's more
"...it's pretty tough for speculators ... to control the price of oil. "

see you're making progress
from" can't" to "pretty tough"

keep going pal

till you go past "sometimes "
and on toward
" always "

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" Everyone who bets that prices will rise needs someone to take that bet"

counterparty awareness
think on that pard

the point ?
spec market transactions
come not by one offs
but in an endless sequence
introduce hedging and repeat exchanging
and much else

then
where might it go next iteration
becomes backwardization etc etc ?

and never forget the other guys money bit we call credit purchasing

losing a little today
with limitless credit means what ?

so ya they like to keep the venture limited each step
so the market tends to creep not gallop

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to cut the ham down to the bone

you have no proof of anything here

out there in the spec markets
the price driver is of course
the net flow rate and direction of aggregate outside credit

net in or net out of the market

yes you can get a bubble by draining off cash
by selling else where

but if there's new credit pouring
into a commodity market
the up process becomes childs play

while its building....b4 the puncture

risky ?

of course it is

fuck what's life all about ?

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"oil is difficult to withhold from the market "

really ?

you simply slow production or easier yet
fail to increase it

and of course
the flux in stored amounts is
itself a wonderous game of shells and peas anyway

that day to day tally tells very little
its like trying to gage stock markets by underlying earnings trends
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--all this
despite the claims of certain
inconvenient pwog hearted apologists
like p krugman--

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"The general price trend since 2005 has been up"

and .....? so .....?

is that about surging demand ?

is it about

"the world's poor ...outbidding the world's rich," ?

cite changes in world import demand
so we can look at this more closely

and generalrising trends over time how long do they tend to last b4 beoming general falling trends ?

or is all this surging about
because

"humanity can't get oil out of the ground any faster."

really ??

is that what's holding back price squelching increases in supply ??

what if i suggested we look at
the consequences of short run hyper vertical demand elasticity

what can you make of that ?

the short run ratio of quantity decrease
to price increase

the numbers on that look like

"suppliers name your spot price "

start here:

what if there was an air tight global oil cartel
what would its pricing strategy be over time ?

its a game theoretic question
with no certain best strategy

however
we know it would flux quite a bit
high enough to gouge out lots of rents
but on occasion low enough to prevent substitute sources of energy to be reliably profitable
so we get a cycle

btw this means
we are headed into a nose dive
sooner or later

the specs are simply the willing and able
the means to the flux

start there

now try to figure out how
a decentralized profit max motivated
outside credit infused spec market
might spontaneously
self organize into amped up flux capacity

ie examine bubble theory

speaking of bubbles they come in various sizes

"$5/bbl up or down misses the real problem"

try $50/bbl up or down

and so what's the real problem then ?

peak oil ??

look you don't be a fool green or brown

fine with me if you want to stay a fool

mental slapstick
makes my life more fun

i like a laff or two at the expense
of a horses ass
but are you a horses ass ??
or just a drinker
of apologists stale beer

-------------------------

" no one is complaining about speculators driving up stocks or driving down the interest rates on Treasury bonds"

really ?

no one notices the stock roller coaster ?
rentiers don't groan about low returns ?

but its nice to see you equate the cost of fuel commodities ---cereals too ? ---
to the spot return on securities

as elements of the human condition my my

no wonder u white wash
the paper trading specs