Speculators & Oil Price Spikes, Part II

Tuesday, May 27, 2008 | 07:18 AM

Why is it that market-worshipers claim fundamentals are responsible for equity prices, but speculators are to blame for Oil prices?

Bill King goes even further: "There is a fervid, global crusade, especially by politicians, to pin escalating oil prices on speculators."

On the other side of the argument, George Soros warns Speculators are largely responsible for driving crude prices to their peaks in recent weeks. And Germany has called for ban on oil speculation altogether. (See John Authors video here)

My own view is that speculators have contributed to the price to some degree, but the tight supplies and freefalling dollar get more blame.

This weekend, John Mauldin looked at a variety of factors impacting oil prices, and if you missed it over the long weekend, its worth a few minutes of your time.

Rather than adding to the noise, lets look at a few charts -- both pro and con -- that may reveal some insight as to the impact of speculators.

>

The Impact of Commodity Index on Spot Prices

Comm_index_spec

Commodity Prices and the Weak Dollar

Oil_dollar_euro


Not Widely Traded Commodities

Exchange_v_non_exchange_traded_comm

Commodity_trade


This is only a brief survey, and I'm sure I missed some worthy links -- please add related articles in comments . . .

>


Sources:
The Short View: Commodity speculation
John Authers
FT, May 20 2008 19:54
http://www.ft.com/cms/s/0/3072f8b6-2694-11dd-9c95-000077b07658.html

George Soros: rocketing oil price is a bubble
Edmund Conway,
Telegraph, 12:53am BST 27/05/2008  http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnsoros126.xml

Germany in call for ban on oil speculation   
Ambrose Evans-Pritchard
Telegraph, 12:53am BST 27/05/2008   http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnoil126.xml

Whither the Price of Oil?
John Mauldin   
Thoughts from the Frontline, May 23, 2008
http://www.frontlinethoughts.com/printarticle.asp?id=mwo052308


Related:

Masters Capital Management
Committee on Homeland Security and Governmental Affairs  May 20, 2008   
http://hsgac.senate.gov/public/_files/052008Masters.pdf

High Oil Prices Spur Thoughts About Bubbles,But This Might Be Misguided
WSJ, May 27, 2008;
http://online.wsj.com/article/SB121175335973420383.html

Energy Watchdog Warns Of Oil-Production Crunch 
WSJ, May 22, 2008;
http://online.wsj.com/article/SB121139527250011387.html

Understanding crude oil prices
Econbrowser, May 24, 2008   
http://www.econbrowser.com/archives/2008/05/understanding_c.html

Commodities Investment Bubble May Burst by Yearend, Lehman Says 
Bloomberg, May 16, 2008   
http://www.bloomberg.com/apps/news?pid=20601081&sid=aNpLC6_ZrK0k&

Tuesday, May 27, 2008 | 07:18 AM | Permalink | Comments (25) | TrackBack (1)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c52a953ef00e552999d578834

Listed below are links to weblogs that reference Speculators & Oil Price Spikes, Part II:

» BizLinks and Open Comments | 5.27.08 from Loren Steffy
Electric industry to see a surge in mergers, analysts predict Dallas investor Rowling to buy chunk of Guaranty Economy Drives Energy Use ($) -- the real green movement. Awash In Profits, Exxon Extracting Every Penny From Its Franchisees Auto... [Read More]

Tracked on May 27, 2008 9:56:24 AM

Comments

Some people blame supply/demand. Other people blame speculators. Then others blame a weak dollar. Each camp is entrenched in their position. Why can't it be a combination of all three?

IMO this is just the case. All of these factors are responsible for the rise of oil. I think the real question is which one of these factors will prove the most influential in the longterm.

Posted by: Entropy | May 27, 2008 7:41:20 AM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner