Rick Santelli oil speculation debunk

simple explanation why oil speculation is not the reason for current price rises

Category:

Education

Tags:

• oil
• speculation
• peak
• debunk
• TOD

[xdir]

what santelli did not say is how investmant banks rented up oilsuper tankers to store the oil while they speculated on the price. why would people gambling on price fluctuation need to hold the commodity? to rig the game.

[mididoctors]

@xdir they would need to keep doing this cumulatively every month to hold the price up. there isn't enough storage capacity in the world to do this to distort prices by the margins claimed.

[xdir]

@mididoctors Oil is ALWAYS in demand and normally sold by the time an empty tanker reaches the terminus, now the traders move oil to storage depots instead of straight to customers, creating a false dip in supply.

Wiki "Oil-storage trade" one in 12 oil tankers is used for storage by the investment banks.

[mididoctors]

@xdir no temp dip can effect the expiration price. think about it..if the speculative "hoarded oil" is released back on the market the price goes back down. if hoarding is distorting the price the hoarded oil HAS to be kept off the table..hence cumulative.. each months hoarded oil has to be stored building an every growing lake of oil hidden from the market. 1:12 is not enough as oil production being flat and oil storage is flat (approx).

[xdir]

@mididoctors You better contact Morgan Stanley and tell them that, they are making a killing by hoarding oil.

If 100 barrels are produced every day and 100 barrels consumed then taking out 1 barrel will cause price to rise, as the demand for oil is also increasing the stored oil is leached back into the system at the higher price a few months later, the only way to sto pthis is for the oil producers to increase production to far greater then can be stored, which is impossible as they are at 100%

[mididoctors]

@xdir then the speculator effect would be a fixed sum as the oil is constantly put back into the system months later..since the leeching back effect is a scale shorter in time than the period claimed to be effected the net effect would be zero... if I capture 1 barrel to speculate with every month (say) the net effect is zero because some speculator is leeching one back from a previous month. this rolling hoard idea doesn't add up

[rodmike9]

Oil wasn't the only commodity to explode, then implode. The problem lies with our banks and the printing of money. Printing money distorts prices (i.e. asset and monetary inflation). The growth of the money supply has, throughout history, caused people to alter their time preference for money. When enough people have altered their spending, bubbles form.

Expanding the money supply alters the time preference for goods and services on a micro (individual) and macro (business and govt) scale.

[Xxsucram89xX]

This doesnt explain why oil went up and down so quickly when the drama in Libya started. EXCESS speculation. Rick works in the Wall Street environment he's almost obligated to defend these Wall Street traders. Don't believe the hype.

[Estevinyo]

if you're selling your contract before expiration to buy a future contract, the price of the about-to-expire contract would drop because nobody would buy it right before they HAVE TO ACCEPT BARRELS OF OIL. Even though a speculator might sell a contract and buy another one further, they have to sell it before expiration and if they had so much influence on the price, then at the time of delivery you would get the market price because all the speculators would be out of their positions

[mididoctors]

the guys lost their shirts

[mididoctors]

the oil was burnt

[mrcool011]

It was many things, speculation, inflation and a weak dollar.