Middle East
Jan 16, 2010
By Chris Cook
...I believe that it is macro manipulation by oil producers, funded by cheap money from investors, which has been the principal reason for recent movements in the oil price. The advantage producers have over oil traders is that producers are able to store their oil in the ground for free....
"...The outcome - which has the effect of monetizing oil in the ground - is very similar to the way in which some governments maintain their currency more or less pegged to the US dollar and illustrates the reality that oil is not priced in dollars: dollars are priced in oil.
Whether or not it is in fact, as I suspect, macro manipulation by producers that accounts for movements in the prices of crude oil and oil products, and the flows and storage of crude oil and oil products, is a judgement I must leave to expert traders. But I am absolutely certain that the "speculator" investors blamed by US politicians and public for the movements in oil prices are not in fact responsible..."
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