Isn't that basically what the people arguing that speculation was playing a role were saying? So now even the opposing viewpoints admits it? No one argued that oil from $20 to $50 or $70 on speculation - people said the crazy rise to $150 was driven by it. The opposing argument in that thread (I have no idea if you were arguing this) was that it was impossible for speculation to play a part in the oil markets because it was different from other markets, you had to take delivery, etc. Seems everyone has stopped arguing that point now - now it seems the argument is "of course speculation played a role, just like in everything else".
all the news about possible supply disruptions was speculation, I think we can at least all agree on that.
i would think what you are talking about is more accurately defined by the terms hype, mania, and panic. speculation is such a vague word that it could be applied to just about anything. people believed that emerging market double digit percentage growth was a given for the next decade and once oil kept going higher this helped fuel the panic and mania near the top. commodity companies were caught up in the hype as well. this can be shown by companies like dry ships and chesapeake whose CEOs got blown out of their margined positions in their company's shares.
I haven't stopped - neither you nor anybody has really provided any answers to the questions that I asked during the spring or fall and I don't see much in this thread to show otherwise.
So you would argue that the fundamentals of supply and demand have shifted so much over the last 6 months to explain the price shedding $110 a barrel?
When you have inelastic, outward sloping S curve and an inelastic, inward sloping D curve, a small shift in either S or D will produce a a much larger change in price. Anyway on to the questions that I was referring to that haven't been answered, which are two: 1. where is the hoarding behavior? If speculators were able to manipulate the spot market, somebody would literally be swimming in unused oil. While inventories have risen, I don't believe it is of the magnitude to show the hoarding if the evil speculators were driving the rise. 2. Nobody has articulated to me how the futures price impacts the spot price, especially when the futures price underrepresented the spot price To date nobody has been able to explain these to me in a satisfactory way. I'm asking honestly here. Look - lots of commodities, including those not traded on futures exchanges and inaccessible to evil hedge fund would-be market manipulators (iron ore is the example that paul krugman uses), experienced spikes & crashes last year...what does this prove? To me it proves that markets had imperfect information (and that inflation occurres and then stopped).
