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SPR release targeted at speculators


TPS

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The CFTC just published data on daily trading in some 20+ futures markets. 95% of trades are made by "day traders" who do not hold open positions at the end of the day. As I've stated all along, commodity markets have been "financialized" and are now subject to the whims of investors.

 

Day traders

 

INvestors pulling out

It still doesnt play much of a role on the overall price of oil. Traders play both sides of the markets, that is the point that

 

I have been trying to make to you for quite some time now. Every time they raise margins, create new regulations or in the latest case of government intervention release reserves, all it does it flush out the short-term traders (for a day or two), only to see the price of oil go right back up.

 

So when you are saying commodity markets are now subject to the "whims of investors" if you mean markets like trading, then yes, if you mean the final price is heavily influenced from speculators, then you are dead wrong. I told you that the release of these reserves would have a negligible effect on prices, and voilaaaa look where the price is.

 

As I stated all along, the price of oil will not be affected by this asinine move that you applauded and thought would have an effect, the price of oil for now is being dictated on the prospects of growth.

 

On a sidenote, 95% of trades is not the same as 95% of positions held. ;)

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this is tough one...on one hand it's encouraging to see the IEA take on the serious issue of speculators gone wild. on the other, will it really work? also, is there any precedent for international, orchestrated, overt attempts at market manipulation of commodities, especially the most valuable commodity? (ok- i guess opec might qualify but other than that). this speaks to me of desperation. i knew it was bad but not imminently disastrous...and i doesn't help my opinion of this move that i hold a couple energy stocks :angry:

 

another concern is the potential for insider profiteering. there must be many people in many govt's with advance knowledge of this and possible future moves. did they just move the trading profits from speculators to govt insiders?

Lets keep this clean, please :devil:

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It still doesnt play much of a role on the overall price of oil. Traders play both sides of the markets, that is the point that

 

I have been trying to make to you for quite some time now. Every time they raise margins, create new regulations or in the latest case of government intervention release reserves, all it does it flush out the short-term traders (for a day or two), only to see the price of oil go right back up.

 

So when you are saying commodity markets are now subject to the "whims of investors" if you mean markets like trading, then yes, if you mean the final price is heavily influenced from speculators, then you are dead wrong. I told you that the release of these reserves would have a negligible effect on prices, and voilaaaa look where the price is.

 

As I stated all along, the price of oil will not be affected by this asinine move that you applauded and thought would have an effect, the price of oil for now is being dictated on the prospects of growth.

 

On a sidenote, 95% of trades is not the same as 95% of positions held. ;)

I guess I have to repeat myself so you get it. I agreed that the release of oil from SPR won't impact long term. my point, as was stated in the article I linked, is that it was used as a message to speculative investment flows--which it appears you agree with.

 

Second, I've argued two points about the money flows: first, they create more volatility--in the short term; second, there is an upward bias on prices from ETF type investments that are longer term. Did you read the second article? That one focused on the impact from long positions.

 

As for that move I applauded, it did have an immediate effect. However, I argued that it was a signal to short term speculators--be ware of taking big positions.

 

Finally, as I've said several times, I think prices are now closer to fundamental values since the big shakeout in early May.

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I guess I have to repeat myself so you get it. I agreed that the release of oil from SPR won't impact long term. my point, as was stated in the article I linked, is that it was used as a message to speculative investment flows--which it appears you agree with.

 

Second, I've argued two points about the money flows: first, they create more volatility--in the short term; second, there is an upward bias on prices from ETF type investments that are longer term. Did you read the second article? That one focused on the impact from long positions.

 

As for that move I applauded, it did have an immediate effect. However, I argued that it was a signal to short term speculators--be ware of taking big positions.

 

Finally, as I've said several times, I think prices are now closer to fundamental values since the big shakeout in early May.

I tried to read it but was unable to. I had to subscribe, and since I'm not on my pc, couldnt get into it. I believe on my pc i have the subscription

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