I start by saying that I am also a supporter of the idea that “speculators can increase the volatility of futures prices but have no significant long-term effect on the price level.” I also read: “This effect has by now subsided”. Could this be due to the fact that there is nothing left to speculate on and not only the operators but also the common people have incorporated in their actions the fact that there is a war in Ukraine and that the state of things is this and cannot get worse? Let me explain better: speculation remains the reflection of what is nevertheless linked to what one thinks will be the official supply data and warehouse inventories. And the fact that the cost of Russian commodities increased months before the war would be an indication in this sense. Speculation would be a natural element of price formation. But it could be me who did not grasp the meaning of the study. I hope I have been able to explain my thoughts.
I think speculators always have something to speculate about, but in late 2021 and early 2022 the uncertainty was much higher than it is today, so speculators could exert a larger influence which in the end created that extra push in oil prices. Of course, uncertainty can increase again in the future at which point speculators may once again have greater influence on he oil price.
One last thought: A similar thing can happen for example for long-term bonds. The prices rise disproportionately compared to what is a reasonable expectation of how much the rates can actually fall within 1 year and then those who do not have wit also jump on the bandwagon. At that point the sense of measure takes over and those who are stuck scream conspiracy. A mechanism that follows those we were talking about last Friday. IMVHO
Or maybe the surge in inflation was caused by the printing of money, in connection with the pseudo-pandemic, and now huge budget injections into the United States only support inflation, and speculators simply follow the trend and strengthen it?, as for example, now the trend in oil is upward, but every day large traders open short positions, squandering billions in attempts to lower oil prices, for the sake of replenishing stocks before the elections?
I start by saying that I am also a supporter of the idea that “speculators can increase the volatility of futures prices but have no significant long-term effect on the price level.” I also read: “This effect has by now subsided”. Could this be due to the fact that there is nothing left to speculate on and not only the operators but also the common people have incorporated in their actions the fact that there is a war in Ukraine and that the state of things is this and cannot get worse? Let me explain better: speculation remains the reflection of what is nevertheless linked to what one thinks will be the official supply data and warehouse inventories. And the fact that the cost of Russian commodities increased months before the war would be an indication in this sense. Speculation would be a natural element of price formation. But it could be me who did not grasp the meaning of the study. I hope I have been able to explain my thoughts.
I think speculators always have something to speculate about, but in late 2021 and early 2022 the uncertainty was much higher than it is today, so speculators could exert a larger influence which in the end created that extra push in oil prices. Of course, uncertainty can increase again in the future at which point speculators may once again have greater influence on he oil price.
One last thought: A similar thing can happen for example for long-term bonds. The prices rise disproportionately compared to what is a reasonable expectation of how much the rates can actually fall within 1 year and then those who do not have wit also jump on the bandwagon. At that point the sense of measure takes over and those who are stuck scream conspiracy. A mechanism that follows those we were talking about last Friday. IMVHO
Or maybe the surge in inflation was caused by the printing of money, in connection with the pseudo-pandemic, and now huge budget injections into the United States only support inflation, and speculators simply follow the trend and strengthen it?, as for example, now the trend in oil is upward, but every day large traders open short positions, squandering billions in attempts to lower oil prices, for the sake of replenishing stocks before the elections?