Why are oil prices rising so fast? (4)
This is the fourth time that I’ve blogged on this subject in just seven weeks. In my second posting, I wrote:
“If the cause is rising demand, then prices will continue to rise because demand will continue to rise but supply will probably only increase marginally (in the short term anyway). If the cause is not rising demand but more probably panic and speculation, then we can expect that sometime in the future prices will fall back, although probably not to the level before the current crisis took hold.”
Yesterday oil prices fell fell by the biggest amount in three and half years. Last week in London, the price of oil was $147 a barrel; yesterday it was $136. So what’s going on? Somebody is ripping us off.
July 16th, 2008 at 9:15 pm
The Economist would have us believe (as would Gordon) that speculators do not affect to oil price (see: http://www.economist.com/opinion/displaystory.cfm?story_id=11670357 )
The reality is that there are both supply and demand problems, but the speculators are having a field day ‘betting’ on the future price of oil. To suggest that this does nothing to the price of oil insults our intelligence (because it’s not the same as betting on the outcome of a football match: the betting influences the price).
George Soros (the man who broke the Bank of England when the pound had to stop mirroring the Euro under Cameron’s old boss, Norman Lamont) said that commodities were his new thing a couple of years ago, and he was right again. Oil is a commodity and he, and others, are no doubt making millions off the backs of our fuel poverty.
July 17th, 2008 at 7:38 pm
Speculators are certainly affecting the price of oil. As international speculators anticipate further price rises, price rises influenced by their fellow speculators’ demand to continue to make their millions by buying any commodity whether it be for example fuel, food or water, it will be inevitable that the international poor will suffer the consequences; paying not just for their fuel, food and water but also paying to support the rich lifestyles that the speculators can parasitically extract from those dependent on the commodity supply for their survival.
Unless speculators somehow gain a conscience, there can be no solution if governments internationally and collectively fail to regulate the commodities markets.