Also references this report.
From page 2:
Speculators Aren't Causing Price Hikes
Market prices are always determined by supply and demand. However, when analysts blame speculators for driving up prices higher than the "fundamentals" justify, what they mean is that speculators enter the market with an artificial demand that is laid on top of the commercial demand for oil by refiners, industrial customers, etc. By supplementing the commercial demand with the speculative demand for oil, the resulting price will be higher.
The data do not support this theory. If speculators raise the price of oil above the level that balances supply with (commercial) demand, then there will be a glut of oil on the market that must be hoarded for future sale. For example, suppose that at a world price of $90 per barrel, world oil output is 85 million barrels per day and commercial demand is 85 million barrels. The market clearing price of $90 is thus the correct one based on fundamentals.
Now if speculative investors suddenly purchase billions of dollars worth of oil futures contracts, they will push up the futures price of oil, which in turn will drive up the spot price of oil. Suppose the new world price settles at $130 per barrel. At this price, world oil output is slightly higher, say 85.5 million barrels per day, while commercial demand is lower, falling to (we'll say) 84.5 million barrels per day. Because of the speculative demand, there is now a daily glut of 1 million barrels per day, because the higher world price of oil has encouraged producers and discouraged consumers of oil.
Naturally the numbers in our example were chosen for simplicity, but the point remains: If speculators really have driven up the world price of oil above the level justified by the
fundamentals, then world output should be exceeding world consumption.
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