ModMark wrote: From CNN Money: “Speaking at a World Petroleum Congress panel, OPEC Secretary General Abdulla Salem El Badri said the world has plenty of crude but that the number of barrels of oil changing hands in the financial markets is 35 times greater than the actual supply.
The numbers he cited were 3 billion barrels per day traded on global exchanges, but only 76 million barrels per day in actual supply.
‘Oil resources are clearly plentiful,’ said Badri, a Libyan. ‘Speculation is playing a very important part in inflating these prices.’”
So 1 barrel of oil is traded 40 times on the market.
Traditionally demand for crude oil is determined by the refineries. They are the ones who are buying the oil to refine into products. – in response to Just Drill, Barry
Dear Comrade Mark,
I’m not sure quoting the head of OPEC to make your point is very effective. If anyone has a motive to blame speculators for the price of oil- besides of course Pelosi, Reid and Obama- it would be OPEC.
You also fail to mention the honored Secretary General says later that $100 oil really presents no hardship whatever to consumers or economies. OPEC is quite happy with the price of oil. Instead of doing the Warren Buffett act and blaming someone else, maybe OPEC should just sell the oil cheaper, if they wish to lead by example. I'm guessing like Buffett, they'd rather grandstand than leave money on the table.
Here are other nuggets from the CNN article which you wish we’d avoid:
But others think investor interest is having only a minimal impact. The real cause of high oil prices, they say, is the fact that the world is using an ever increasing amount of oil, and that oil is getting progressively more expensive to find.
"We believe high prices are due to tight supply," said van der Hoeven [of the International Energy Agency].
She didn't mention speculators in her speech, but she did say that production at the world's current oil wells is declining by a rate of 7% per year.