Quote Originally Posted by dhussdawg View Post
From what I understand, most hedge funds were selling oil once it got above 100 dollars, which means they were trying to put downward price pressure starting at that point. Our oil guys here at Citi said when prices were at 140 dollars that they were 99 percent confident that oil would be below 100 dollars within a year. Seems like the speculators knew the price was too high the whole time.

There was a quick massive sell of because the American consumer finally became elastic and then everyone realized that the economy was in the toilet. Everyone wants to point fingers as to why oil went through the roof. I will give you two main drivers. Point 1: China has brought another buyer to the table. For too long, America has been the only buyer in town and we were used to cheap oil, which led to point 2: Americans abuse the freedom that cheap oil allowed us to have. Driving our huge trucks, SUVs, Hummers 30 miles a day back and forth from the burbs into town.

You want to know why oil went to 145 dollars? Because it needed to. Maybe this will help Americans pull their heads out of their asses and adjust their lifestyles some and quit pissing oil down the drain. It is probably just a preview of things to come over the next few decades. God help us when China and India's economies boom again, Americans will be crapping their pants when oil shoots through the roof again. I hope we start using/finding more abundant and effective forms of energy outside of oil. We are at the mercy of the market now, our illusion of control is gone and 145 dollar oil proved that.
Wow they really called that one, they should have said that oil was going to be below $30 within three months.

Maybe oil needed to go that highfor Americans to become price adverse but it wasn't due to purely supply and demand. Trading futures or options is speculation or any investment to some extent. I read somewhere 60-70 percent of futures contracts are held by entities that have no direct involvement in the commodity. Is there anything wrong with profiting from legal trades? No, but to say that speculation had little effect on the price of oil is incorrect. Speculation is a major factor in the price as is nature, political conflicts, supply, demand, OPEC