crookmatt asked:
It seems to me based on my basic economics 101 experience, that if the price of oil is pushed higher than what would normally be supported by worldwide supply and demand, then the artificially high price will cause demand to decline, supply to rise which would normally cause a surplus. Speculators would then need to add even more money into oil commodities to account for that surplus to keep the price high. Therefore for speculators to keep the price of oil above what is supported by supply in demand for any extended period of time, they would by necessity keep adding more and more and more money into oil. Since speculators pot of money isn’t endless eventually supply and demand will catch up and pop the speculative bubble.
It seems to me based on my basic economics 101 experience, that if the price of oil is pushed higher than what would normally be supported by worldwide supply and demand, then the artificially high price will cause demand to decline, supply to rise which would normally cause a surplus. Speculators would then need to add even more money into oil commodities to account for that surplus to keep the price high. Therefore for speculators to keep the price of oil above what is supported by supply in demand for any extended period of time, they would by necessity keep adding more and more and more money into oil. Since speculators pot of money isn’t endless eventually supply and demand will catch up and pop the speculative bubble.
Does anyone want to refute my analysis or support it? What do you think we have now (a speculative bubble or a real price increase in supply and demand) ? What is the reason oil has gone down $40/barrel in the last month?
Anne
2 Comments
For delivery and producers can not simple market controlled by supply and demand either that is sold for delivery and producers can not have speculative bubble like you can.
For delivery and producers can in gold of production.
The article is below.
The article is better than saudi arabia theyre estimated at 20 barrel but oil prices should go down quite bit soon.
The past eight years they started at 20 barrel and are.