Jump to content

Another Oil Discussion


OSUGT

Recommended Posts

I know this topic has been beaten to death, but I never lose interest in what oil is selling for per barrel.

 

http://money.cnn.com/2006/09/27/markets/oil_eia/index.htm?postversion=2006092715

 

 

Here is what I dont understand. Oil prices have been falling rapidly over the past month. Supplies are rising, demand seems to be fading, tensions are lighter etc etc. It's the perfect scenario for a price drop.

 

However, after a strong inventory report came out today, oil went down then shot up almost 2 bucks.

 

The following is a quote from the article above that best sums up the fundamentally wrong way oil is bought and sold:

 

"The feeling was that if the market wasn't able to break $60 with even these kinds of stats, then maybe it's time to accumulate some," said Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank

 

Energy traders are manipulating the market to make a buck that comes right out of our wallets! We have the biggest supplies of crude and gas that we've had in years, but oil still goes up. I'm sorry, but to me, the supply and demand theory just went sailing right out the window.

 

Just had to vent.

Link to comment
Share on other sites

The following is a quote from the article above that best sums up the fundamentally wrong way oil is bought and sold:

 

"The feeling was that if the market wasn't able to break $60 with even these kinds of stats, then maybe it's time to accumulate some," said Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank

Actually, this makes quite a bit of sense to me. It's the exact same notion as placing a limit order on the stock market, saying "If Microsoft falls below $25/share, buy 100 shares", writ a couple hundred times over. If enough people think oil's a bargain at $60/bbl, it'll never go below that. They just better hope that the supply/demand inversion doesn't last too long, or they'll lose massive amounts of money, just like hedge funds have been on their bad natural-gas call.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...