I's no economist nor the son of an economist (to paraphrase the Book of Amos), so maybe someone can help me with THIS
The oil futures market seems incredibly volitile and drives prices in a way that is utterly unconnected to reality. For instance the article linked above says:
Now the futures market bounces up and down in a couple of days dramatically over possible fears? How is that realistic and helpful for anyone but those who are trying to manipulate a market to make money?
Oil slipped on Tuesday after Iran said world powers had made positive proposals to end a crisis over its nuclear program, opening the door to more talks.Oil swept to a record $75.35 in April as the dispute between Iran and the United States rumbled on. On Sunday, Iran's Supreme Leader Ayatollah Ali Khamenei said oil flows from the Gulf would be endangered if Washington made a "wrong move."
2 comments:
It is caused by the knowledge that oil is something that IS running out, which means any "negative" turn may prove to be the beginning of a long descend. There simply is not enough oil to go around any more, so the risks invelved are very real...
You are right about that, but that does not address the issue in its entirety. "Running out" is a relative term. there is no immediate threat, is there? There are oil reserves in other parts of the world.
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