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Driving the markets
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Some Questions, no answers
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A President speaks the truth!
Green masks
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A new dilemma?
Kenya: a new oil-frontier?
Forecasting a trend?
Some early signs for 2008
2007; A year to remember
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Fraud alert - bogus job ads
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No Comment
Changing balances
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A fresh overview
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National Interests vs. Shareholders Value
Fear??
'The Dialogue'
Consumption
Do we actually need to worry?
 

Driving the oil-price?

2008-03-18


In the rich collection of news and articles in this update, there was one that particularly stood out: an article from Der Spiegel on “What is really driving the oil-price?”.

The outcome of the research for the article was not new but nevertheless shocking.

There is the fact that the oil-price has doubled in a very short time, without there actually being a reason for it, based on the market-principles of supply and demand.

There is the fact that the trading volume is about 15 times the global oil consumption, meaning about 1.3 billion barrels a day. However, most of the world”s oil is sold without it being traded, fixed in long-term contracts.
This means that the oil that is being traded is changing owners many more times a day, all in the aim to drive up the price and maximize profit.

The markets have changed considerably the last years, with the entry of “Big Money” around the Millennium-change, and since then speculation and price-driving has been the order of the day. Speculators now hold up to 45 % of all oil contracts.

The reasons being given for the increases are always presented in a way that they seem natural, within worst-case and Fear & Angst scenarios, and although viewed from a distance often too silly for words, are sheepishly being copied by the news-media.

Can we say that the markets are being manipulated? Well, don”t say it too loud in a circumstance where “Free Markets” are the religion, but the short answer is “Yes, and massively so”. It ever more looks like a very sophisticated robbery that steals from the masses and the poor and gives it to the rich.

Can we do something against it? Well, as long as the speculators, the money, the media and the government of the biggest “Free Market” are all in a few hands and working closely together, it may be difficult. Unless of course the bubble of greed implodes and we can move to a more reality-based market-system.

Until that time we best use as little as possible and conserve as much as possible.

It may help.

Alexander

Responses are always welcome at Alexander@gas-oil-power.com

 

Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

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