The role of speculators driving up oil prices globally
BAGHDAD - A morning rise horrible witnessed in oil prices and gasoline in the world behind the part forces beyond our control, such as the role played by fast-growing countries such as China and India in raising the demand for oil and thus raise prices. But there are other factors also contribute to raising the prices we are able to do something about it, and the most prominent of these factors speculators .. Those investors who buy and sell oil futures without even the barrels would not have actual physical possession. These intermediaries do not add anything in terms of value, but add much to the cost of the Bid for oil in the pursuit of pure profit. These people should be addressed to them and prevent them from entering the global market for the exchange of goods, because this would lead to a reduction in oil prices by up to 40 percent and gasoline prices average $ per gallon.
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today is dominated by speculators trade oil futures. According to testimony before Congress, commodities expert Michael Masters in 2009, the market for oil futures are taking daily buying and selling more than one billion barrels of oil. Since the production of the world as a whole does not exceed 85 million barrels (actual) per day, the meaning of this is that 90 percent of the trade is carried out through exchange speculators Beramil oil (on paper) between them. Because of this speculation has become today's oil prices, which hover around $ 100 a barrel , distantly related costs of extraction, with a world average of about 11 dollars a barrel. And speculators were responsible for the increase in oil prices up to 40 percent, as stated in the certificate of Rex Tillerson, CEO of Exxon Mobil before Congress last year. This has enhanced appreciation of the recent report issued by the Federal Reserve Bank of St. Louis. Claim many economists that speculative oil contracts a good thing because it raises the fluidity of movement and distribution of risk distribution more homogeneous, thus allowing producers and liquidators and wholesale buyers and consumers (such as airlines) of the Insurance their hedge against loss in a more efficient and thus protect themselves from future unforeseen fluctuations in oil prices.
But there is a difference between these two things. Trading system that puts players in which the oil industry strategic bets on the basis of where prices can be months after something totally different pumping system through which hedge funds and banks billions of dollars Pure speculation in the market for the exchange of goods. The same concerns that explain what was done by the Government of the United States during the Great Depression when placed limits on the Pure speculation in the exchange of grain after that I noticed the occurrence of repeated manipulation in crop prices. Different market oil futures markets for other commodities in terms of size and perspective of this trade, as well as in terms of their impact on important strategic resource. There is a fundamental difference between oil contracts and contracts for orange juice, for example. When prices rise orange juice and exceed a certain limit (perhaps because of the bubble of speculative bubbles) we can easily switch to apple juice. But this does not apply to oil. When oil prices rise have an act of choking on the chain of economic leads to lower profits, for regular business, as well as depressed investments.
When I started the purchase and sale of oil by more than 30 years for the benefit of my organization is non-profit were not speculative considerations important in the oil industry. But in 1991, after just a few years of the start of trade oil futures market exchanges in New York (New York Mirkntail Xshing), the Goldman Sachs put forward to the "Office of Trade futures contracts for goods" that the agents "Wall Street" who place bets high the oil should be considered legitimate Toutin and give them on this basis an exemption from the regulatory limits imposed on their trade.
hp Congress to work when he realized the extent to which the weak control by the "Office of Trade futures contracts for goods." In the wake of the economic crisis became the law of the Dodd-Frank to reform Wall Street's demands for greater transparency is needed speculators who do not have hedge funds legitimacy of limits does not exceed 25 percent of the futures market at the latest. This step is important not deny, but restrict the speculators in the oil market has not yet reached the limits required. Despite the limitations of the existing eight banks that remain alone able to raise oil prices strongly. So should the federal legislation to prevent speculators oil from entering the market exchange of goods in the United States at all, as should the United States should use its weight and means of pressure to make the European and Asian markets follow suit Vttard speculators of oil to the graduation of the market exchange of goods in the world.
The elimination speculative trading oil futures contracts linked to the issue of right and equity. The choice here is based between two worlds .. World of hedge fund traders who make huge sums of money at the expense of ordinary people who want to lead their car and Adfioa their homes, another world where everyone can afford the necessary elements of their food, housing, health care, education and energy.