"Market full of oil and price trend "fake"

[Damage control]

TEHRAN (Reuters) - The market is full of oil and the rising price trend is "fake and imposed," Iran's President Mahmoud Ahmadinejad said on Tuesday.

"At a time when the growth of consumption is lower than the growth of production and the market is full of oil, prices are rising and this trend is completely fake and imposed," Ahmadinejad said in a televised speech.

Iran, the world's fourth-largest oil exporter, has repeatedly said the market is well-supplied with crude and blames rising prices on speculation, weakness of the U.S. dollar and geopolitical factors.

"As you know the decrease in the dollar's value and the increase in energy prices are two sides of the same coin which are being introduced as factors behind the recent instability," Ahmadinejad said.

Oil steadied on Tuesday after touching a record near $140 the previous day, with traders caught between a weaker dollar and expectations that top exporter Saudi Arabia will ramp up output to its highest rate in decades.

U.S. crude slipped 15 cents to $134.46 a barrel by 2 a.m. EDT after ending 25 cents lower on Monday, as traders quickly took profit from a rally to a record $139.89 triggered by a falling dollar and the closure of a North Sea oil platform.

(Reporting by Zahra Hosseinian; Writing by Fredrik Dahl; Editing by Jacqueline Wong)
http://www.rawstory.com/news/mochila..._06172008.html

What do you guys make of this??


DC

[SteveXD]

I'd agree with it. They say that 50% of the rise in the oil cost has been the result for speculators. And given that oil is traded in dollars our weak dollar is cause a lot of the price increase. I remeber not to long ago a guy put an ask price of $100 per barrel and that man along started a frenzy for the day...

[mojo]

First let me say that Ahmadinejad is an idiot ... but I do agree with part of what he said. A major part of the increase in the price of oil is the declining value of the U.S. Dollar. If the dollar wouldn't have fallen off a cliff the last couple years, then oil wouldn't be nearly as high as it is. Oil and a lot of other commodities are/were due for a rise in price, it's just that most are priced in US Dollars and as the dollar drops their prices increase. If we could get a FED chairman that didn't run the printing presses 24/7, then maybe our dollar would have a chance to stabilize.

I don't buy the argument that speculators are the problem. People have to remember that in the futures market there has to be a buyer for every seller. If no one wanted to pay $135+ per barrel, than the seller could not sell that oil. In the stock market, there are companies that "make" a market. They are basically required to take the opposite side of a trade. They buy when people sell or sell when people want to buy. This does not occur in the futures market. If no one whats to buy/sell then some else can not sell/buy.

[LittleRedToyota]

i agree that the biggest issue is the weak dollar. speculation is driving the price up a little, but it isn't a real issue compared to the weak dollar.

the price of oil in gold hasn't really increased at all.

the dollar is just very weak...primarily because our government's monetary policy is short-sighted at best.

at some point, people might start selling oil in a currency other than US dollars...if that happens, we are in for a world of hurt.

[mojo]

i agree that the biggest issue is the weak dollar. speculation is driving the price up a little, but it isn't a real issue compared to the weak dollar.

the price of oil in gold hasn't really increased at all.

the dollar is just very weak...primarily because our government's monetary policy is short-sighted at best.

at some point, people might start selling oil in a currency other than US dollars...if that happens, we are in for a world of hurt.

Which I believe Ahmadinejad wants to do. He wants to sell in Euros, a number of other nations want to do the same. If it happens we are definitely in a world of hurt.

[Kaos]

Which I believe Ahmadinejad wants to do. He wants to sell in Euros, a number of other nations want to do the same. If it happens we are definitely in a world of hurt.

Realistically, I say let it happen.

Maybe then we'd be able to tap our own oil stocked up all over the place in this country....or we'd plummet into chaos.

Either way Im sick of waiting.
Either drill that and get us some relief, or let's get on with the next civil war.

[LittleRedToyota]

Which I believe Ahmadinejad wants to do. He wants to sell in Euros, a number of other nations want to do the same. If it happens we are definitely in a world of hurt.

i think he does too.

fortunately, i think we can pressure saudi arabia into not letting it happen, but, eventually, it might happen anyway. of course, if, at some point, the house of saud decides they do not need to rely on us for security anymore, they will want to sell oil in some other currency, too.

and then we won't have all those petro-dollars coming back into our capital markets propping up our economy...and, down comes the house of cards.

of course, that would also be a disaster for china, so they will prolly help to pressure the oil producers to keep selling in dollars as well. otherwise, china is going to be left holding a whole lot of worthless dollars.

it is an interesting time in human history.

[MOUNTAINORACLE]

IMHO the main reason that the price of oil has been going up is for over two years the fed has been lowering the interest rate.

Low interest rate=higher price per barrel
High interest rate=lower price per barrel

oracle

[mojo]

Realistically, I say let it happen.

Maybe then we'd be able to tap our own oil stocked up all over the place in this country....or we'd plummet into chaos.

Either way Im sick of waiting.
Either drill that and get us some relief, or let's get on with the next civil war.

If it was only that easy ... we can drill as much oil as we can but it won't help us because we don't have the capacity to refine it. If we drill for more oil, we have to then ship it overseas to get it refined, then ship it back. Guess what countries have refineries?

If we were able to start building refineries about 10-15 years ago, then drilling for oil now would help. Mostly the blame for that is the govn't but also your average citizen. Would you want an oil refinery in your back yard?

I remember Pittsburgh was trying to get a monorail put in to help with traffic (btw, that would have help people save $$ on gas) but it got shoot down because nobody wanted it to go through their neighborhood. That was for a monorail ... imagine a refinery.

[knight0334]

For one time I agree with that dipsh!t.

I've said for awhile now most of the oil price problem is speculators, commodities brokers and chicken little's that are screwing things up.

They need to take oil off the commodities market and stop allowing people crying "oil is gonna be $*** a barrel by July" to see what the prices really are.

Anytime you state something is gonna be a certain price, business and consumer push it there out of acceptance of speculation.

Then commodities brokers are selling oil shares and creating artificial demand.

And of course, our dollar doesn't help one bit either.