Oil Prices Soar on Speculative Buying

[ECH1969]

Oil futures jumped by more than $2 a barrel Tuesday to settle at their highest level since mid-October. Traders said speculative buying was the main force behind the rally.

Other bullish factors in the mix included cold rain and snow in the U.S. Northeast, a natural gas dispute between Russia and Ukraine that unnerved Europe, and a declaration from a top Iranian official that Tehran will resume research into nuclear fuel production, a comment that raised concerns about the country's nuclear weapons ambitions.

"There's a tremendous amount of speculative money going into energy futures," said James Cordier, president of Liberty Trading Group in Tampa, Fla.

Cordier said hedge funds and other investors looking for better returns than U.S. stock markets have delivered in the past year are piling into energy futures, creating unusually high demand for crude oil, gasoline and heating oil contracts.

http://biz.yahoo.com/ap/060103/oil_prices.html?.v=12

[MazeRat7]

1. And we are "piling" into S. America, China, Europe, et al.. as well.

Its a global economy and if you want your returns maximized, you should be looking at "all" markets. The US is not the only "player" on the block not to mention they really are not a very good "player" (in terms of investment returns) at all. Can you say flat-line in '05 ?

MZr7

[Jayhawk Lib]

2. Not a bad thing

Greedy speculators will cause a short term run up but sooner or later they will have to sell what they bought because they really have no where to go with it. That will create a bubble and guess what will happen when the bubble bursts. It will take a big drop.

I have watched these markets for years and this is what always happens.