Re: It was Bush's fault when they went up. It's Bush's fault when Oh, forget it....
- From: Fred Ghadry <falko282@xxxxxxxx>
- Date: Fri, 15 Sep 2006 03:18:54 -0500
Sordo ™ wrote:
Analyst predicts plunge in gas prices
By Kevin G. Hall
Oil is traded in contracts for future delivery, and
companies that take physical delivery of oil are just a small part of
total trading. Large pension and commodities funds are the big traders
and they're seeking profits.
It seems that many don't understand the futures markets, and how commodities are bought and sold. One need look no further than the nearest farm, where crops are never sold except as futures contracts for delivery at price 'x'.
No matter if it's pork bellies, frozen orange juice, cattle, or grain, the market price is established by the commodities futures traders, not the food processor. (Certain items, such as dairy products, are impacted by government pricing policies, but other than that, the prices are not controlled by the government). The only thing that the government can do is try to prop up prices by subsidizing farmers who don't grow things. Same principle applies to all commodities.
Speculation in the oil futures market caused the 'bubble', not GW Bush.
.
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