Oil prices surge on word U.S. ship fired shots in Persian Gulf

Gary12850

Can someone explain to me why ..

gunnut

In a word,greed!

2002UltraClassic

IMO I think that the market is about as unstable as George dubya is and therefor when he start letting the Navy plinkign around in the Gulf, the marking is scared out of their minds that he will try to go to war with Iran as well.

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smitty901

Oil like sugar, corn , weat and darn near any other thing you need is sold on a furtures market.
The intend of this market is to give produces and those that make products fromthese a more stable supply and price over time.
Exam. you will need 1 billion tons of corn over the next year to make your chips you hedge your cost by buy furtue deliveries at a set price sounds good and works well.
Here comes the problem John who never made a corn chip in his life thinks corn will go up in the next six months. He can buy corn at 1.80 for delivery in 6 months. He buys it hoping the market will go up and he can sell it befor he has a lot of unwanted corn.
OIL is the same way only right now there are a lot of Johns buy large contacts. This keeps forcing price higher. John is in no real danger right now of getting stuck with the oil becasue we want it.
I would bet that most that play the furtures market never touch the products. We have in years past seen sugar go up 4 times the prices becasue of this.
Remember the Hunt brothers they tried and almost took over the silver market doing this.
What they did not plan on was every one in the world selling off all the old coins and silver they had stuffed away. In the end they could not buy up the supply and furtures prices fell making thier holdings worthless and forcing them to put up the cash and take delivery of the silver. And some remember what happen to them. And the price of silver.
Furture traders live off rumors,fear, hipe they are in it for the quick dollar and out the heck with what ever damage they do. As farmers we have sat back and seen corn we sold at 1.80 jacked up to 3.00 by the time comsumers got it by them.
I have stated for many years that in order to trade in any futures market you should have to prove you need the product, that you use the product and are controling no move than you will use.
Right now those that hold the next years supply of oil will never touch that oil they will just resell the contract befro delivery.

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