Loading ...Below a copy of a note to a friend re the OPEC story. He thought it was OPEC manipulating the prices. He is very sensitive or negative to conspiracy theories. People need to try to imagine what it would be like, if average new home prices (or average new car prices) were derived on the Futures market.
Good morning Kevin, thanks for the comeback, but I was not talking about any of those things you mentioned. Currencies, and the futures markets are too complicated for me to explain. OPEC controlling oil? From the 1970s stories?
Recently oil was $20, (OPEC?) and a spiked to below zero, negative once. (OPEC?) It was also up to $145/bbl (OPEC?) when the Feds drove the Dollar Index down to 72 it inverted Oil higher. The OPEC complaints are basically about futures incorrect pricing, being it too low or too high.
“Manipulating” prices sounds bad like conspiracy, which is actually the wrong word for speculating and betting or guessing and or voting on an anticipated price in the future. Futures are thinly traded. A big player like Goldman Sachs can move the market price. If thats what the Fed needs or wants.
At times Congress complains about “speculators” driving oil too high. But forgot to complain about the Fed driving the dollar too low. (or too high) our friend Chick used to buy and sell thousands of bbls of Oil.