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15247Re: 70% of oil price is speculation

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  • k_r_johansen
    Feb 28, 2013
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      --- In LandCafe@yahoogroups.com, "Scott on the Spot" <ssbaker305@...> wrote:

      >
      > As for empirical proof, I toss out, again, that oil was $147/barrel in
      > the summer of 2008, and just $35/barrel only 7 months later. Demand did
      > NOT slack off by 3/4!!! We would have been living in unheated caves and
      > bicycling to work if it had...if there was work to go to at all. No,
      > this was a result of speculators being forced, or in some cases,
      > voluntarily, cashing in their long positions in the price-setting
      > futures market, selling their contracts, in other words, or even
      > shorting them. That is what speculation is.
      >

      A 3/4 reduction in price of oil-futures, doesn't mean a 3/4 reduction in demand does it? Prices in the final consumer market didn't see the same fluctuations.

      Kj
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