|
Oxford Business Group: profiteering artificially increase investment in oil prices |
|
Monday, 07 July 2008 |
Significant volumes of speculative investment in oil may be reflected in prices on world markets, says the company for analysis Oxford Business Group (OBG).
Oil is the main theme of the last analysis in the UK-based publishing company for economic research and consulting services.
In the analysis is placed in doubt disseminated explanation that the price increase was due to increased demand and other market-structural factors.
Currently prices are almost seven times higher than the average price of 20 dollars for the past 15 years of the XX-th century and marked increase of just over 30% in 2008. The data show that there are any speculative factors to remove the artificial prices in the oil sector.
The analysis of OBG, which was released simultaneously with the request of finance ministers from the G-8 investigation related to the International Monetary Fund (IMF) has often focused on changing prices in the oil sector and resulting from this pressure on political leaders to find a quick solution to problem.
Institutions and hedge funds seeking profit from the increase in oil prices investing money in oil futures and oil in the main stock indexes.
Defenders of profiteering, which are usually politicians from countries with well-developed economy, argue that there is no connection between speculation in oil prices and the real price of a barrel of oil . However, futures are the most direct and easy way speculators or managers of the funds, concluding transactions for its own account, may affect oil prices.
Buying futures speculators remove the artificial oil prices and encourage consumers of crude oil to buy large quantities, which in turn increases the spot crude oil prices. According to data of the Committee to the U.S. Senate 40-50% of the barrel price of oil is the result of speculative investment.
Most analysts calculated that more than 200 billion dollars were invested in commodity indexes. According to recent report by the Lehman Brothers for the period January-April 2008 every 100 million dollars from external cash flow leads to a rise in the price of WTI (U.S. index for crude oil ) by 1.6%.
Unfortunately, the actual amount of speculative investment in oil futures can not be determined because of lack of transparency in major oil deals.
Since the high prices are supported by the system, they will seriously undermine demand, which could lead to a return of prices to more normal levels.
Unfortunately, the end user can not do almost anything than to suffer from high oil prices and waiting for their demotion. |
Finances and Markets 
