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SPECULATORS OF OIL AND CURRENCY

Pada post bertajuk " SPEKULATOR BUKAN OPEC PENENTU HARGA MINYAK DUNIA" bertarikh 4hb Jun 2008, kami telah membuat sedikit kajian dan penerangan tetang senario bekalan minyak mentah dunia sebagai respons kepada kenaikan harga petrol dan diesel secara mendadak di Malaysia.


Pakar dari MIER berkeras mengatakan bekalan tidak mencukupi maka sebab itu harga minyak naik. Kita menyebut bagaimanan SOROS sendiri mengakui bahawa hedger and spekulator di pasaran hadapanlah "penyangak" sebenar yang mengaut keuntungan.


Speculators driving up oil prices

Prices now almost 7 times higher than average price of US$20 for last 15 years: Research firm

KUALA LUMPUR: Large amounts of speculative investments in oil may be having a significant impact on world oil prices, according to an economic briefing entitled ‘Speculative Oil’ from Oxford Business Group (OBG), a global publishing and research firm.

It questions the common explanation that supply, demand and other structural market factors are forcing prices upwards, noting that the higher prices go, the less plausible it becomes that unremarkable supply and demand pressures could account for such dramatic price increases.

OBG said prices were now almost seven times higher than the average price of US$20 for the last 15 years of the 20th century and have already increased by over 30 per cent in 2008.

“Evidence suggests that there are other, more speculative forces at work in the oil sector which are driving up prices,” it said.

Recently, the Group of Eight (G8) finance ministers called for an investigation, involving the International Monetary Fund (IMF), into the recent energy price volatility.

Pressure is mounting on political leaders to produce a solution to the price spike, and OBG asserts that with prospects in equities, bonds and other assets looking bleak, commodity prices are increasingly being billed by financiers as a new class for investment.

“Institutions, hedge funds and sovereign wealth funds are looking to profit from the rise in oil prices by pouring money into oil futures and oil-dominated commodity indices,” it said.

OBG said defenders of the speculators, mainly politicians and media from economies with advance financial sectors, have argued that there was no connection between oil price speculation and the underlying cost of real barrels of oil.

“Settlement of futures contracts takes place in cash, with no physical delivery of oil taking place, thereby avoiding any pressure on the underlying market,” it said.

However, future contracts are the most direct way speculators, or fund managers acting on their behalf, can gain exposure to oil prices, and there are good reasons to believe that speculators are having a larger impact on oil prices than their defenders suggest, OBG said.

By purchasing futures contracts, speculators are driving up the forward price of oil, which encourages consumers of crude to buy oil today, in turn driving up spot prices of crude, it said.

A US Senate subcommittee has reported that 40 to 50 per cent of the price of a barrel of oil was the result of speculative investment.

Most analysts are estimating that over US$200 billion is currently invested in commodity indices, up from US$13 billion five years ago.

A recent Lehman Brothers report estimated that between January 2006 and April 2008, every US$100 million of new inflows caused an increase in the price of WTI (Western Texas Intermediate, the American benchmark in crude oil prices) of 1.6 per cent.

An estimate that commodity index funds saw investment flows of US$2 billion in the first quarter of 2008 would, according to the report, cause oil prices to increase by 32 per cent.

This does not account for speculative investment directly into oil futures.

The size of these investments is unclear due to the lack of transparency on the principal global oil exchanges.

As hedge funds, banks, institutions and other investors hold open positions on oil prices, they have a profound interest in talking up prices and supply and demand pressures, according to OBG.

Adding to the hype, analysts raised forecasts, attracting further investment flows, all resulting in the abnormal price rises, it said.

As high prices feed through the system, they will seriously undermine demand, providing a possible trigger for prices to take a sharp about turn back to more normal levels, the research firm said.

“There is very little end-users can do but suffer the high prices at the pump until they ease off again,” it said.

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