Did we both read the same article? The title of the article is "OPEC not losing sleep over high oil price". The article does not specifically suggest that speculators are driving up the price, it quotes the head of OPEC as saying that:
"The market is controlled by speculators. They are considering oil as a financial asset," said OPEC Secretary-General Abdullah al-Badri on Wednesday. And he isn't exactly a neutral observer in this story. OPEC can claim all they want that speculation is controlling the price of oil. If there was 20% more oil being pumped, or if demand were 20% lower, the price of crude would fall through the floor as countries and companies struggled to compete on price and move their inventory. As things stand now, they don't have to compete on price, every barrel of oil being pumped is being sold. Supply and demand. Speculation in the market is largely about securing oil for the future in the face of ever-growing demand and the possibility of supply disruption. But supply disruption only matters because current supply is so tight up against demand that there is no room for error in the system. This is exactly the same sort of mess that California went through in 2001 with the power outages. The utility system was broken up and re-organized in an attempt to create competition and lower demand, but the idiots who designed the new market failed to put in place guarantees that there would always be some excess generating capacity in the market. Pretty soon, some clever bastards at places like Enron figured out this loophole and proceeded to game the system by taking plants offline for "maintenance" during peak demand periods so they could reap the windfall profits of the spot market, which is the only uncapped pricing market in the California system. OPEC is essentially doing the same thing- keeping supply tight up against demand and riding the price of oil right into the sky. On Dec 8, 2007 12:21 PM, Dana wrote: > right. There's nothing there about China or the evil minions of OPEC. The > gist seems to be that it is speculation that is driving the price up. > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Enterprise web applications, build robust, secure scalable apps today - Try it now ColdFusion Today ColdFusion 8 beta - Build next generation apps Archive: http://www.houseoffusion.com/groups/CF-Community/message.cfm/messageid:247988 Subscription: http://www.houseoffusion.com/groups/CF-Community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
