The New Price of Oil
If you are like me, you must be annoyed at the price of oil. From $145 to $35 in 6 months with no major event. If anything, the Israel attack on Gaza and the production cuts would drive oil the other way. Some argue recession and a lack of demand from China and India, but such things don’t change over night.
The real reason for this move is speculation. Oil should not have been at $145 to begin with. Hedge funds and commodity traders poured billions into this commodity to drive the prices up, often leveraging their bets for an exaggerated effect and a higher return. Then, when credit dried up, and people wanted to cash out of their investments, they left the table, leaving you scratching your head and holding the bill.
Check out 60 Minutes’s videos titled the Price of Oil below:
This is part 2
I have often written about the need for regulation on Wall Street. I am a capitalist at heart, but every system needs some boundaries. Do you think commodities should be allowed to move like a roller coaster?
– Faisal Laljee
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when the oil rise up again because today price is so low
Oil has some support at current levels. I think it will be over $50 by summer.