Don’t you think that oil prices would suddenly burst and history repeats itself again as it was for example with the dotcom companies or real estates?
Is it any market behind it ,when investments are done by financial sharks which long ago had sensed blood in water and would keep buying to keep demand high enough but
just so long as it would please them.
Modern financial regulations are so advanced that almost out of range of average share holder, they are the secured weapon to maintain very high profits.
Is it really an old market still governed by same regulation as before - buyers and sellers?
This is a good question. I’ve seen and read oil market experts explain rising oil prices as having three causes: (1) hugely increasing demand from India and China, and (2) a speculative bubble, (3) the low value of the US dollar. Contrary to what some people believe, there’s no small group of “oligarchs” who manipulate the price of oil from day to day.
If a large part of the price is based on speculation, then quite a lot of events could burst the bubble. The high prices have made it cost effective to extract oil in Canada that was previously too expensive to exploit. If that comes on the market in large quantities, that could make the bubble burst. A dramatic rise in the value of the US dollar could also burst the bubble. Right now the value of the dollar is being kept low in order to maximize exports and investment in the US, but there’s a sense here that it’s gotten MUCH too low. If the US Federal Reserve decreases the dollar supply to bring the value up, this could lower oil prices.
I hear there’s a similar bubble in steel right now.
What I have found today about oil market , it could be quite devastating in general, it says that the fundaments of which the market is built are not really clear and at least untill now not fully recognized in details.We don’t know exactly, how much oil would be required by China or how much is necessery to cover the world consumption,(the normal daily demand),how much is already under extraction and during production,what are real quotas for OPEC members etc, etc.
Actually major informations are kept in shadow and final results are usually coming as potentially danger surprise.
Russian Government at the beginning of this years has shifted 100 billions of dollars from its reserve to buy shares in the USA financial sector? When everybody is afraid to spend more on risky mortgage market in USA, relativaly poor Russians are going to buy really a lot (the fifth part of all its reserve has been involved in that operation)
Are they maybe just afraid of the oil’s price in the case when reccesion would be the confirmed fact?
Speculation is permanent part of the market maybe sometimes it would act or function under different names but speculation is all the time there.
About new oil fields in Canada and USA.
I was on board the ship which was exploring Alaska waters in American part ,there were also Russians seismic boats relatively close to us (or seismic boats worked for Russians in their section). I had been looking for oil in Canada as well (New Foundland Orphan Basin).
Cheavron had let everybody to know after , that there is a lot of oil,but is it really?
Later I heard that they knew already much more earlier about it.
Why have they kept it secret so long then?
I have after a market analyses’ lecture a feeling that we are much to much pressed by financial advisers to keep buying and … not thinking about what we do.
My dejavou from last few years are very similar when big fishes started explaining that
IT MUST GO THAT WAY
shares’ price would be soon after just collapsing.
In USA ( which has probably the strongest and most efficient control above stock exchange) many cases are pending in courts marked as open due to activity of bankers. Voodoo economy on paper is known there (Mekka of industrial world) very good .
Fluctuation on the markets would be for sure quite normal but is it only pure fluctuation?
Why I have a feeling that I am sucked by World Oil Industrial ?
Jan
I would appreciate very much if you could point out any grammatical mistakes.