Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (70531)	6/3/2008 5:59:48 PM
From: Cogito	Read Replies (1) \| Respond to of 542829

Bob - I think that when you have a market in futures, and that market becomes overrun with speculators who are willing to pour cash into it, the prices of commodities become inflated out of proportion to cost of production, or even to real supply and demand to some extent. In the case of the oil futures market, the supply/demand equation relates to the availability of futures contracts, and can become divorced from the supply/demand balance for the oil itself. It's much like the housing market of recent years. Speculators were pouring money into it, and prices went through the roof. And that didn't even involve futures contracts, which can further distort a market. I'll refer once again to the article I posted a link to earlier: "With global stock markets still weak compared with the robust gains of the past few years, many investors see better potential for gains in the oil market. Speculative buying has been cited as a major reason behind oil's more than doubling its price in a year." I've become convinced that current oil prices are a bubble, and will suffer the fate of all bubbles. I could be wrong, of course. - Allen