Dude, if the many hours I have spent in standstill traffic the past few days is any indication, they could charge a hundred dollars a gallon and it wouldn't make a lick of difference.

I heard that stock market trading speculators are driving up the price and it's not all supply and demand.

Paul: stop reading the children over a dKos and listen to someone like Boone Pickens. Worldwide oil production is 85 million barrels of oil a day and worlwide consumption is 86.4 million barrels. We just don't produce enough oil to meet worldwide demand.

If you read carefully Forlorn, I did not say it was not because of supply and demand. I said i heard it was not all because of supply and demand.
Maybe supply and demand accounts for 90% of gas price increase and speculators account for 10% of the inflation.
I have never read dKos or Boone Pickens by the way.

No, Paul, your sources are wrong.

Speculators are not "market-moving." In other words, speculators not only aren't trading enough volume, they can't trade enough volume to drive up prices.

Believe me, if it were really so simple to invest in something, and you and all your buddies could drive up the price so much just by buying it, then Wall Street would be all ears. What you actually see are so-called "speculators" who are investing in commodities that are already going up. If people buy an S&P 500 index fund, are they driving up the price of the components? Or are they actually investing in stocks that they believe will go up?

If you want to blame anyone for high oil and gas prices, blame Democrats who prevent us from drilling in ANWR and off the coast, developing midwest oil shale, and building new refineries. (We haven't built a new refinery in 31 years, thanks to the goddamn tree-huggers.) Blame Alan Greenspan and Ben Bernanke for the weak dollar, which accounts for at least a quarter of the increase in oil prices.

Here is a good and simple to understand article from Business Week that explains how oil speculators are driving up the cost of oil.

http://www.businessweek.com/magazine/content/04_35/b3897042_mz011.htm

Just because Business Week says something is so does not make it so. I've heard far better explanations of how "speculators" supposedly drive up prices, even though they're all wrong.

All you need to know is what the article admits: "Most of the speculators, moreover, are betting that prices are going even higher in the short term." In other words, they're betting that the prices will go up, but they can't make prices go up. Their involvement does increase demand, but not enough to be significant -- not enough to account for the large increases we've been seeing.

Don't be surprised with these absurd criticisms that speculators' holdings went up x times over y years. When you think about it, it's expected that more "speculators" will want to get involved in something that will already be going up, and it's only natural that their portfolios increase in value. Look what's happened to the price of oil! If your futures today are the same number of barrels as before, the value of your holdings should increase proportionately with price. In other words, if you're dealing with the same futures today as one year ago, it's going to be double the value of one year ago.

I'll repeat: if it were really so simple to invest in something, and you and all your buddies could drive up the price so much just by buying it, then Wall Street would be all ears. Do you have any idea how many billions of barrels of oil are produced annually? Approximately 31 billion. At $100 per barrel, that's 3.1 trillion dollars worth of oil. Sorry, guy, but Goldman Sachs, all the king's horses and all the king's men don't have enough power to move that market. All of the big boys, hedge funds, pension funds, etc., might as well push on a string.

Just because Business Week says something is so does not make it so. I've heard far better explanations of how "speculators" supposedly drive up prices, even though they're all wrong.

All you need to know is what the article admits: "Most of the speculators, moreover, are betting that prices are going even higher in the short term." In other words, they're betting that the prices will go up, but they can't make prices go up. Their involvement does increase demand, but not enough to be significant -- not enough to account for the large increases we've been seeing.

Don't be surprised with these absurd criticisms that speculators' holdings went up x times over y years. When you think about it, it's expected that more "speculators" will want to get involved in something that will already be going up, and it's only natural that their portfolios increase in value. Look what's happened to the price of oil! If your futures today are the same number of barrels as before, the value of your holdings should increase proportionately with price. In other words, if you're dealing with the same futures today as one year ago, it's going to be double the value of one year ago.

I'll repeat: if it were really so simple to invest in something, and you and all your buddies could drive up the price so much just by buying it, then Wall Street would be all ears. Do you have any idea how many billions of barrels of oil are produced annually? Approximately 31 billion. At $100 per barrel, that's 3.1 trillion dollars worth of oil. Sorry, guy, but Goldman Sachs, all the king's horses and all the king's men don't have enough power to move that market. All of the big boys, hedge funds, pension funds, etc., might as well push on a string.

Perry, take your first sentence and apply it to yourself.

I realize you're ignorant of many (most?) things, but are you just so stupid that that's the only retort you can make?

Business Week is not the Bible. What you need to do is examine the situation critically, and think for yourself (I know it's hard for authoritarians like you, who like being told what to do), instead of just taking a single article as the single answer.

Having evaluated what's happening in oil markets, and having a firm grasp of how markets work, I know it's not "speculators." If you don't agree with me, fine. So refute a single thing I said above, then I might think you have more than two neurons working at once. More importantly, perhaps you'll arrive at your own truth.

Speculators are simply not market-moving.

Hello!
You may probably be very interested to know how one can manage to receive high yields on investments.
There is no need to invest much at first.
You may commense earning with a sum that usually is spent
for daily food, that's 20-100 dollars.
I have been participating in one project for several years,
and I'll be glad to share my secrets at my blog.

Please visit my pages and send me private message to get the info.

P.S. I earn 1000-2000 per day now.

http://theinvestblog.com Online Investment Blog