I am often amused when I read about the "witch hunt" going on to blame whoever for the rising price of oil. It's the government, it's speculators, it's Jesus himself, blah blah blah.
A few weeks ago oil topped out at 147 bucks a barrel. At that time there was serious "demand destruction" in the USA. Demand destruction is a term used when people stop buying something because of the high cost. The US is consuming 1 million barrels a day LESS of liquid fuel than it was just a few months ago. So..the price of oil has fallen to 118 bucks as I write this.
If you're blaming speculation for pushing up prices, you're misguided. Oil contacts can be traded "long" (where you wait for the price to go up) or SHORT where you buy high and sell low & you make a profit (yes, you can do that). If the run up in prices was because of the speculators, then obviously the decrease must be for the same reason. It's simply illogical to assume that falling demand has brought down prices /end sarcasm
The free market is an ugly thing sometimes. People love the free market...when it's on their side, but hate it when it's not on their side. You have to take the good AND the bad. The run up in oil has been constant over the past 6 years. In 1999 oil was 10 bucks a barrel & it's been increasing regularly excluding the odd pull back.
Why? Geologists (the people that understand fossil fuel extraction) call it Peak Oil. It's where you reach the plateau of production and afterwards it's a long ride down. And it's effing ugly. Google Peak Oil...then stop blaming the speculators. And stop buying so much gas for your giant SUV ;_
No comments:
Post a Comment