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Look at natural gas I think this commodity is artifically surpressed
flagship21 1 year ago
However, they do have a legitimate cause as they look after loads of (rich) ppls monies and more and more institutions: mutuals, pension funds, HoFs, local govts/authorities are investing in them!?!? Argh, the argue could go one and onpro vs con.....
"the billions inveted by HFs have a distabiliting effect on the oil price?"
in a word: Meh. Is increased HF regulation the answer? maybe. the FSA certainly isnt equiped as Vince points out. Supra-national HF regulation might be an idea?!
ralphcore 3 years ago
Say a HFs is shorting a poor old bank or going long crude futures, there must be a buyer for the short and seller to match the other side of the long. If the bank had gone up (cos the banking sector currently defies all logical fundamentals) or the front month WTI contract had halved cus OPEC open the taps and the HF on both occasion lost out, would this be virtuous? Zero sum game. I like nothing more than learning a big old posh fund had taken the other side to my trade and lost money!! Hawhaw.
ralphcore 3 years ago
And why should the FSA or any other body be interested in investigating why oil is at £100? IT'S A FREE MARKET it is a price - get over it. There is no undoing unless you want to destroy the whole basis (getting deeper). As a firm believer that in any market (betfair, lse, autotrader, ebay, cbot etc) there should be the ability to place a bid/offer to your liking and if others want to take the other side of that trade then it's their problem.
ralphcore 3 years ago
This has been flagged as spam show
It is true that by design most HFs are short-term-ists and are certainly in my view able to exert unproportional influence on the mrkt that can exacerbate trends causing the huge swings in prices and vol we have seen in the last few yrs (remembering in your video you quote $100p/bl and now it is some $40!!! in only a few months).However I do not agree with any claim that they are to blame for $100 oil.And why should the FSA or any other body be interested in investigating why oil is at £100?
ralphcore 3 years ago
Comment removed
ralphcore 3 years ago
Nice video with some interesting contributions.
My view is that essentially oil is a finite item and there is currently in global terms a high appetite for the stuff with very few (proven) economically viable alternatives.
The case is that volatility in oil prices has increased so drastically in the last few yrs that hedge funds are the most likely targets by politicians/media with the huge amounts of capital and leverage they employ on the market.
ralphcore 3 years ago