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The Price Of Oil

The historic swings in oil prices last year were the result of financial speculation from Wall Street and not supply and demand. Steve Kroft investigates.

  • srk
  • posted by srk
  • Date 1/15/2009 8:55:25 PM
  • Views: 4401
  • All Ages
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15 Comments

Current View: 15 / Show all Comments

truth-is-the-nemesis : LVL 37: VP 4.5: said:

truth-is-the-nemesis

22 votes NegativePositive

299 days 1 hour ago...

great upload, thanks:)

srk : LVL 34: VP 4.2: said:

srk

14 votes NegativePositive

299 days 1 hour ago...

^ anytime bro :)

Galvatron10000 : LVL 16: VP 2.5: said:

Galvatron10000

0 votes NegativePositive

298 days 21 hours ago...

they did like in the great depression, the rich men boosted the economy to make major profit, they knew when it was gonna go up and they new when it was gonna go down, and if they would have use the offer & demand way (basic economy) it would have never happen, but the offer and demand was projected on the US army who wasted a lot of oil (F-22 raptor consume a lot of gas) and we had to pay for it when they probably had cheap gas.only USA and Canada got fuck and we have a shit load of oil in our tarsands.
it`s the JP Morgan way the illuminati way, WAR should be in the stock market in wall street and everybody would make a lot of money

Pojo : LVL 42: VP 5: said:

Pojo

Hidden (Show Comment) -12 votes

297 days 18 hours ago...

Don`t get me wrong, I was getting excited to see the cost of gas go down. I didn`t watch the entire thing though, so correct me if i`m wrong.
Person buys oil for set amount. Then that person turns around and sells that bought oil for more than he spent. We blame that person for cost of gas going up.
Why exactly? You`d think that`s what a market is. Buy an item then resell it at a higher price. Which is profit. Profit = Market.
I think one major cause of gas prices going up are shitty cars that get >10mpg and the people driving those cars everyday for long distances. A lot of people don`t have the money to get a fuel efficient car. They have to make due with what they have. Which does suck but they demand something that the US seems to be running out of.

srk : LVL 34: VP 4.2: said:

srk

-7 votes NegativePositive

296 days 22 hours ago...

It goes much deeper than any of us can understand. If we understood this, then this wouldn`t happen.

neo214 : LVL 41: VP 4.9: said:

neo214

-4 votes NegativePositive

296 days 21 hours ago...

Why can`t I full screen this?!@

Tada : LVL 42: VP 5: said:

Tada

9 votes NegativePositive

296 days 20 hours ago...

Pojo: Speculators create a fake market on fake demand where nothing is really being sold and bought for use. Demand was in fact going up for oil, more people wanted to buy it. HOwever that demand wasn`t an actual demand since no one was using more oil than before.

Imagine if someone bought everything at wal-mart and then sold it to someone, who then sold it to someone, who sold it to someone, who then sold it to people that would use it. YOu`ve now created a market which is several times larger than what it normally would be if everyone bought to use and the stuff will simply become much more expensive as a result, unless the producers simply create more products, flooding the market, which isn`t possible with oil.`

Anyway, real market economics only work if people are buying because of need, creating a real demand for the product or commodity.

jaredko : LVL 36: VP 4.4: said:

jaredko

20 votes NegativePositive

296 days 19 hours ago...

Folks, these investment banks that made billions on the increasing cost of oil also lost billions on the collapse. Now they are taking your tax dollars in the form of a bailout. Does this piss anyone else off?!

This is the kind of behavior you get when companies know they are too big to fail, you get rampant speculation. Imagine you are an investment bank, if you bet on the price of oil going up, you make billions, if you are wrong, the tax payer gives you billions. You would be stupid NOT to speculate in the markets.

The problem is not too little regulation, it is companies that are not being held accountable for the excess risk they take!

PCGamer91 : LVL 36: VP 4.4: said:

PCGamer91

11 votes NegativePositive

296 days 19 hours ago...

Well fuck this clears up so much shit. When are all these fuckers going to jail then? I am not to savvy in economics/law but would a bank owning an oil retailer, and then upping the prices 3 fold by falsifying demand not be a conflict of interest and a sort of insider trading? How is this not a clear cut case that should land all these executives in jail, have the bailout packages canceled and also get G.W Bush and all the entire congress members/senators that voted for these laws sent to prison for fraud?

I knew something was fishy when prices were going up and up and suddenly crashing especially when shit all was happening to actually interrupt supply. excellent video 5/5

ReX : LVL 21: VP 3: said:

ReX

0 votes NegativePositive

296 days 18 hours ago...

Fact is: Speculation is a byproduct of the larger issue.
We`re running out of old-solarpower energy. Dead plants, fossilised for millions of years, seriously? Our entire economy is based on this finite matter. It`s a zero sum game.
If we learn to harnass renewable forces of nature with minimal harm to the human habitat, we won`t be subjogated to markets which are not free.
Free market: Atomized suppliers (and demand), transparency, no entry barriers and such.
If you`re a socialist, you could point out the atomised philosophy viewpoint isn`t descriptive for markets. It`s prescriptive, but I`d like to believe markets can be free. Because I beleve anybody and anything can be free.

mcbarker : LVL 37: VP 4.5: said:

mcbarker

5 votes NegativePositive

296 days 17 hours ago...

Nice post but I`m surprised that this is new information. I`m not even an investor but I knew the oil prices were driven up by speculation. I remember when the news was telling us that demand was higher in China and India due to their booming economies. To validate that premise China and India would have had to purchase every car that was produced in the world for the past 5 years. Obviously that wasn`t the case.
To make things worse we are bailing out the very investment banks that raised our gas prices and then lost billions when the summer demand died down.
How is it that these executives are still breathing?
How is Madoff still living in his Manhattan penthouse apartment?
Snipers of the world unite!

Arangaras : LVL 38: VP 4.6: said:

Arangaras

0 votes NegativePositive

296 days 16 hours ago...

The speculations and it`s consequences occur because the U.S. has been interfering with the open market, by preventing a natural correction in the market by using expansive monetary policies every time a small "downtime" was expected. More "speed" in the market = more demand for everything (especially oil)=> speculations => swindels.

For the economists out there: This (always building more speed using expansive monetary policies) is what Hyman Minsky called a displacement.

Tada : LVL 42: VP 5: said:

Tada

3 votes NegativePositive

296 days 16 hours ago...

ReX: People started buying oil because they thought it would run out after a while and become more and more pricey. Obviously they thought they were right as the price started to go up and just started buying more and more of the stuff. But we aren`t running out of oil and it doesn`t effect prices at the moment since there is a steady supply of oil coming in each year. Sure in the long run we`ll be out of oil, that something like 100 years from now, by then we`ll most likely have converted our energy source into solar or hydrogen power, perhaps nuclear fusion is we are lucky.

This is how the market work on a large scale. If people think something is going to be more valuable next year, they are more willing to pay more this year. If people think it`ll be less valuable next year they are willing to pay less this year.

Still we should count ourselves lucky. If wasn`t for the banking crisis, the price of oil would only have gone up. It would only have crashed when people couldn`t buy gas anymore, which would probably have caused a lot more problems since you`d still have to get to work and stuff like that each morning.

insaneskippy : LVL 37: VP 4.5: said:

insaneskippy

3 votes NegativePositive

296 days 9 hours ago...

Leslie Cockburn...LMAO

BradPitt : LVL 24: VP 3.3: said:

BradPitt

1 votes NegativePositive

296 days 4 hours ago...

The same guys that own these banks are the same guys that own the supreme court, the central bank and the white house, of course there wont be a federal investigation.

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