The Price of Oil

Some time ago, I wrote that the reason for the price of oil reaching into the $70 a barrel range was because oil is traded on the futures commodity market and it was speculators that were driving up the price.

Everyone on news broadcasts (and quite a few bloggers) said no, it was a supply and demand thing, what with China and India eating up so much of it.

Yesterday, oil dropped into the $40 a barrel range, and there has been no change in the demand in China or India - and the warmer Northern U.S. winter would have only a marginal effect on the global price - especially since the price drop took place after the Midwest had already had several days of snow and ice storms.

So - I feel vindicated in my view that it was the futures traders that were driving up the price, and to all of you who told me otherwise, all I can say is:

BITE ME! (sorry, Jack).