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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (34517)	6/16/2005 4:07:05 PM
From: Canuck Dave	Respond to of 110194

But there's a definite false statement in Andy's article. The level of speculation in oil futures is low, not high. The spec funds and commercials are NET NEUTRAL. freebuck.com CD

To: carranza2 who wrote (34517)	6/16/2005 5:03:01 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

his entire argument is based on the idea of evil speculators being the cause of high oil prices. but as Canuck Dave pointed out, that's flat out wrong. that sucking sound is his entire argument being flushed down the toilet. if he were a more intellectually curious person, he might not dismiss the high prices so readily with the hackneyed evil-speculator ruse. the explanation that makes the most sense to me is that spare capacity has gone away. as for higher inventories, that is easily accounted for by the YoY shift from backwardation to contango. Xie gives no indication that he is aware of these matters--he is totally focused on the demand side and ignores supply. obviously oil prices could fall precipitously given an extreme demand drop, but i think that would take place in the context of a severe worldwide depression, and would only delay the inevitable.