Jesus fucking christ, do you not fucking get it?
Demand was equiv to supply for years. If it was truly supply/demand, you'd have seen some people NOT get enough oil, simply because higher paying people would TAKE the oil from them by out-bidding them. I never once saw a story about oil shortages. The market was adequately supplied and was continued to be adequately supplied. There was not one fucking "fundamental" that changed between 2006 and 2008 that lead to a 600% price appreciation.
The only thing that changed was a paper investment of more than $800bn that fled from the debt/mortgage market to the commodities market.
It's why EVERY commodity shot up, not just oil. It's why EVERY commodity (except for gold) has come crashing down. Everybody plowed into commodities, then when the redemptions hit, everybody came out.
I'd buy your bullshit argument if the supply side was limited to oil, and the crash in demand of oil caused a crash in price, resulting in an over-supply.
Even now, with them trying to prop up the price through supply cuts they can't keep up. That's because it had NOTHING to do with supply/demand.
Previous housing bubbles were caused by local market perturbations, not through lack of regulation. It's why I laughed my ass off when people kept saying this housing burst would still be local. They fail to understand that securitization has turned housing from a local investment to an international investment.
You're wrong Charrison, just admit it. Every single person on the planet recognizes that speculation, NOT supply/demand drove the price of oil. Except for you. You're the lone hold-out.
That's because he's ignorant. I've trounced him all over here and he still comes back to the same lame-ass argument.
Higher prices keep shortages from happening. Industry found ways to do the same job with less. I could give you countless examples of how industry changed so they could use less. I can also give you countless examples of how supply rose.
Yes and they fled because they were going to have to start taking delivery rather than flipping contracts.
Oil like most other commodities are heavily used for industrial production. By the time the oil bubble popped, several of the world economies were already in recession, so industrial production was falling. Which means demand for those commodities were falling as well.
I'd buy your bullshit argument if the supply side was limited to oil, and the crash in demand of oil caused a crash in price, resulting in an over-supply.
And then demand dropped because of global recession and that has pushed demand quite low.
You have not trounced me, I am just at a bigger picture than you are. I do realize hedge funds played a role. I have not denied that. But you at least need to admit that tight supply is what allowed the hedge funds to drive up the price.
So you deny that both consumers and industry alike changed how they used oil, so they could use less of it? You deny that rig count went to high not seen in 30 years?
Yes it collapsed when the speculators could no longer flip contracts because supply started to exceed demand.
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