ronharmless wrote:
That is not what you said before. You look back on page 104 you said speculators "Manipulated" the market. You also have said "Supply and Demand" had very little influence on the market (I can give you some page numbers if you need them). So I go back to my question. Why aren't speculators "manipulating" the market to their benefit now? Nothing else except supply and demand has changed.
Why? Why does any huge group of people act the way they do? "They" decided the price was as high as it was going to get and cashed out. That's one possibility. Another is that "they" were afraid the economy couldn't handle the price going any higher and cashed out. Who knows.
The speculators are a huge group and manipulated the price of oil by continuing to purchase futures. They were able to do this because they collectively acted the same and continued to purchase futures. When enough of them decided to cash out the price collapsed. This is VERY typical of radically inflated prices; the bubble bursts.
ronharmless wrote:
If the speculators are in control of the price, why aren't they driving the price up again right now and making another killing?
Um... Because the price is falling. The speculators are not a small group of people who can make a unified decision. If they buy they are BETTING that the price will go up. Right now, that doesn't look like a good bet.
I suspect that right now many of them lost their a** and aren't looking to do it again. However, they may have made enough overall that they are just waiting for the bottom price. Actually, as fast and far as it's falling, THAT is what I am afraid of. "They" will start buying again soon and the cycle will start all over again. I'm hoping that enough of them really lost their a** and are not interested in trying again.
ronharmless wrote:
As I recall AO-hitech, you were one of the doom and gloomers, blaming the high cost of gas on speculators. Guess what, as consumption fell, the price fell. Now, if speculators where the cause of the last run-up in prices, why aren't they back running up the price now? Nothing has changes except the level of consumption.
Consumption did not change NEARLY as much as the price has. The speculation bubble simply burst, as it typically does. When that happens the price usually dives to the opposite extreme, just as we are seeing. The only thing I worry about is that it will get too low (if it's not there already) and become a good buy again; starting the cycle all over. Hopefully enough speculators got burned to make them afraid of the fire. :W
Supply and demand CANNOT account for the recent price spike and drop (what's the opposite of spike?).
