Allegra Order
“OPEC’s Secretary General said on Tuesday more balance was needed between the amount of oil traded in the physical markets and the “paper” markets allegra order, which the group has often blamed for causing price swings.
“The paper market should be a reasonable percentage of the physical market, of the real barrels,” Abdullah al-Badri said at the Reuters Global Energy Summit.
Badri said in June 2007, there was the equivalent of 3 billion barrels of oil being traded in paper markets, when 67 million barrels a day were traded in the physical oil markets.
He said it was not acceptable to have this imbalance….
The Organization of the Petroleum Exporting Countries has previously said there was a need to control speculation and Badri reiterated there was a need for standards.” Click for ARTICLE
- OPEC wants to see “paper” oil reined in
- Jane Merriman allegra order, Alex Lawler, Barbara Lewis
- Reuters
- June 2, 2009
If you were looking for a definition of excessive speculation this is it!
John Heimlich, the Chief Economist of the Air Transport Association pointed out that in the month of June the combined volume of the NYMEX WTI, ICE WTI and ICE Brent futures contracts just by themselves is over 1 Billion barrels per day (this does not include the OTC markets which are larger). There are only 85 million barrels per day produced and consumed in the world. If every barrel produced was hedged (most are not) with a speculator on the other side and every barrel consumed was hedged (most are not) with a speculator on the other side then at least 830 million barrels per day are traded BETWEEN speculators. Oil futures trading is well above 83% PURELY speculative!!
Using OPEC’s numbers it’s over 95% speculative!!!
These are NOT side bets. Futures prices determine spot prices. Clearly speculators with 83%+ market share determine futures prices.
P.S.OPEC got burned the most when oil prices crashed last year from $147 to $33 per barrel. They realize that they have little if any control over oil prices any more. Speculators are firmly in control; allegra order.
[...] in June 2007, the equivalent of 3 billion barrels of oil traded daily in paper markets, versus just 67 million barrels a day traded in the physical oil markets, according to OPEC [...]