used van prices

Oil prices: is the tail wagging the dog?

July 9, 2011

EDMONTON, AB July 9, 2011 / Troy Media / - Wall Street speculators or Chinese thirst for fuel, which carries more of the blame (or credit) to drive crude prices higher? While China's role was to stimulate demand is fairly clear cut, the impact of the financial industry on the commodity markets is less obvious.

Historically, producers and end users use the exchange to mitigate risk, selling or purchasing contracts to lock in a price in the future. The contract was never really intended to be settled by delivery, however.In the future, a commodities broker local contract with the local producer (or user) to sell (or buy) the physical commodity in question and the funds received from the local broker would be used to pay the account in the exchange.

Another element of speculation

There was always an element of speculation, as you never really knew what the price would be in the local real estate agent on the road, but the vast majority of players had a physical connection to the goods.That began to change a little more than a decade when U.S. regulators allowed large institutional investors to play a much larger role on the commodity exchanges. This change coincided with strong movements of commodity prices, which raised some eyebrows.

A then the entrance to this new class of participants have been something other than just a passive role in commodity markets? The answer is no, according to a recent report by economists Ron Alquist and Olivier Gervais Bank of Canada.After watching a series of arguments, they concluded that the culprit was the ultimate Asian demand coupled with supply support.

It has been argued that the speculative pressure on oil prices is that the daily number of contracts traded raw energy of oil is up to 15 times higher than the daily consumption of crude oil. Alquist and Gervais noted that the two variables are not directly comparable, be measured with only one point in time (a stock variable) and the other measured as a unit of time (a flow variable). Finally, the two might be correlated, but only a coincidence.

Rip Van Winkle

Einstein never used flash cards, how our children really learn--and why they need to play more and memorize less

Elizabeth Van Lew, Civil War Spy

Prices and knowledge, a market-process perspective

Used and Rare, Travels in the Book World