Oil Speculators

I remember back in 2008 when I heard about all of the oil speculators who were causing the price of oil to go so high. The proof came after just a few months when the price of oil dropped by $100 per barrel. The one thing I didn’t really know what how speculators were doing what they were doing? Well, with current low oil prices, we are getting another view of how some of those speculators operate.

This story came from NPRs All Things Considered and it shows some of the ways in which oil is not completely based on demand. A great article summarizing all of the changes in the oil market that have occurred over the last few months can be found here. From the sound of things, the world has changed a lot since 2008. If Saudi Arabia has given up its traditional role as the keeper of the keys to world oil supply, traders are going to have a much harder time trying to make money by hording oil for the future.

All of this also makes the debate over the Keystone Pipeline all the more interesting, or maybe just mute. Has anyone asked of the companies involved still want to build the pipeline? Now sounds like a bad time to invest in anything oil related.

The fall in oil prices could be the big story of 2015. What effect will it have on global consumers? How will countries like Russia, Iran and Nigeria adapt to this massive loss in income? However those questions turn out, I, like many Americans, just filled up me car for $1.89 per gallon. That is probably going to push the thought of buying a Telsa out of the minds of most families for a while.

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