6 Myths About Oil Speculators

Reader Comments
Back to blog

Very deceptive article. Among other things, I like how the author allows the pure speculators (who cannot physically take possession of the oil they "buy") to hide behind legitimate businesses THAT USE THE PRODUCT.

Scott of CA 7:14PM March 19, 2012

In the last sentence you just admitted what the problem is...excessive leverage. Therefore the speculators are a problem because they are using that leverage. The airlines are complaining that there is excessive speculation. Previously the end buyers constituted 70 % of the market, now 80% are speculators. By driving up the prices of the contracts the end buyers have to pay more to lock in a price for their future business plans. I think you should find another occupation.

Greig Cummings of CA 1:47PM October 06, 2011

What determines the price of a barrel of oil? If speculators drive up the price of oil by buying futures contracts, than can the price go to $500 a barrel or $1,000 a barrel based stictly on speculators buying futures contracts? Isn't price the mechism that brings supply and demand into balance? If speculators drove the price to $500 a barrel what would be the demand at that price level? Wouldn't new supplies of oil come on market at that price? Lower demand and new supplies would drive the price of oil back down. Isn't this the way markets work? Wouldn't speculators lose their asses by driving oil prices above the level where supply and demand are in balance?

Wally of IN 9:52AM April 21, 2011

If you don't lay hands on the goods, then shove off.
Oil companies do not need speculators to sustain themselves, this isn't some strange commodity that only gets used by a small population, this is a commonly used commodity that is used by every country in the world, the market for oil is not in jeopardy, but the <75000 family of four certainly is, and no I don't love to hate speculators, but I see them for what they are. And yeah, parasites can be symbiotic, but in this case they are an infestation.

2008/2011 Vision of WA 11:04PM April 17, 2011

I LMAO at all of you bashing the administration that it is THEIR fault.
Get REAL people.
Here....take a look at production figures of crude for the US since 1954. At this point...the US is producing HALF of what it was back in 1972.
http://www.eia.doe.gov/emeu/aer/txt/ptb0502.html
ALSO notice what has happened with Alaska production since 1988...and for that matter...even onshore production since then.
For ANYONE that doesn't know...hundreds of wells were shutdown in the US during the 1980's-1990's...because folks weren't happy with the profit margin.
Ya'all's point of "lack of drilling" is senseless. The market has been manipulated.
On another note...in 1981 there were 324 refineries operating in the US. By 2009...only 150...
http://www.eia.doe.gov/emeu/aer/txt/ptb0509.html

Vern of WI 7:58PM April 16, 2011

They still won't name names of who these people are. Who they work for. There is too much ealk like this idiot about what good they do for there not to be a problem.

Richard Jensen of MA 12:37PM April 12, 2011

"Speculators should be banned. Few, if any, economists or energy analysts advocate this."
Economists and energy analysts as well as the oil speculators should be banned. Economists are sort of like bankers - they never lose. Energy analysts are just economists that know nothing about something specific.
Here's the fix - Publish lists of people who buy oil contracts at less than 75% margin requirement along with their home addresses, names of their children and spouses and employer. Better yet, but not as fun, BUY THE CONTRACT _ TAKE PHYSICAL DELIVERY OF THE OIL!!

Bob of VA 8:03PM April 11, 2011

Stop defending these scumbags! Don't justify their despicable actions all for the money.

Tired of Government of NE 8:44PM March 16, 2011

i think the oil speculators should be known to the public so we can deal with since the goverment wont. the bastards should be dealt with

scisinger of OH 4:38PM March 13, 2011

This is the second time I have posted on any blog. Usually, I spend most of my Internet time sending messages to the President and members of Congress about big oil and what it is doing to our economy. Starting back in the late 1990's, I warned those of our government that we were headed for a bankrupt economy if federal and state laws were not passed to ward off "price gouging" and the artificial setting of market prices for oil. Well, we've heard it all as to who's to blame. I went so far in 2003 to email every representative and senator, even the President. (Incidentally, Hillary Clinton returned her email and told me to talk to some other senator.) The message was simple and plain, "Take care of the oil companies or get ready to be sent home!"
Of course, that was ignored and the government shifted in representation. I felt I represented the average voter in the U.S., and I still feel the same way. Without the required federal laws to perform adequate investigations on the oil companies and their investments, our economy is doomed. Now it’s the markets and the hidden speculators. (Just another excuse in a long list for our government to dodge the issue.)
Now, we hear "cut spending" is why the government reps say they were sent to Washington, and it doesn’t make any difference whether Democrat, Republican, or TEA PARTIER. We need to take back our government from the oil companies and their cronies.
So, I guess we do it again, "Clear Them Out!"
Join me and tell our government, “We’ve had enough!”

Larry Whitfield of NC 11:41AM March 06, 2011