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["Don Bowen" <don.bowen AT earthlink.net>]

> Peaking a bit behind the curtain though, in the recent downturn in world
> financial markets may speculative traders got caught short and had to dump
> contracts they were holding at any price to raise cash to meet their
> obligations. Some of the price reduction is a reduction in demand but most

> of it is literally that when you are at the pump, some speculator 
> somewhere is footing $1 a gallon of your gas as you fill up.

Oil prices are plunging for a variety of reasons.  The unwinding of the
commodities futures market as holders are desperately trying to raise case
in a down market is one part.  The big or small part depends upon how much
you thought speculators were responsible for the upswing.  Look at Copper as
an example.  It was trading well over $3.50 several months ago, now it is
below $1.90.  Other commodities are the same as holders see demand
destruction.

Demand destruction is another part as the world slides into what appears to
be a nasty economic down turn.  China has seen its growth slide to single
digit territory and since the Olympics are over they have moved back to more
coal fired electricity.  Our own demand has slackened somewhat as people are
driving less and companies cut production in the face of declining demand.

The carry trade unwinding has moved the US currency up against almost all
other currencies taking a lot of pressure off the price of oil.

I have no idea what the prices will be in the future other than higher.
When and how high is a whole 'nother issue.

Don Bowen  KI6DIU
http://www.braingarage.com/Dons/Travels/journal/Journal.html