Oil Commodities

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Are they trying to force something out of the world, intentionally or not? Are they a political force which will eventually force nationalizing all business and trade of commodities in the US and the world? If commodities get too high, so as the common person cannot afford to pay for it, will this not force the United States and other governments to at least ban commodity trading on the exchanges?

Best Answer

1) you do not even know what you are talking about. 2) if the government bans commodity trading in the US, it will just go overseas. When people are selling their oil and someone in China offers $150, and the US says the limit is $100, who do you think will get the oil? Sorry buddy, the US government doesn't have control over the world. If gas gets too high, take a bike to work. If gold gets too high, don't buy jewelry, if corn gets too high, grow your own.

Why is oil and other commodities traded on the market instead of pricing being set by companies?

Best Answer

Think of commodities in these terms. Nobody has a monopoly on a commodity. Anybody with a shovel, a plow, a drill, can obtain a commodity for free (in theory, ignoring production costs). Now that you have this commodity, you want to sell it to earn some cash. If you just set an arbitrary price, whomever is looking at your Asking Price will decide if they want to pay that amount. If they can get that same commodity from somebody else cheaper, you'll never make a sale. As such, you have to lower your price. And the reverse is true. If you ask too low of a price, you'll be swamped with requests for that commodity. But then will you be able to fill those orders and net a profit? All a "Market" does it pair up buyers of commodities and sellers of commodities. And its in that market where the supply/demand of buyers and sellers discover a price point that values the commodity in question. So yes, companies can set a price for their commodity. Question is, will anybody pay it?

Best Answer

If you think the market for oil commodities is going south (= is going to drop), then you sell them now. (Yes, even if you don't own them, you can sell them and receive the going price.) Then, to close the position, you must buy them back before the option expires. If you're right (about the price dropping), then you will be buying them back at a lower price and can pocket the difference. Work with a reputable broker, they will explain in great detail the risks associated with this often employed investing principle.

Are they printing their money faster than the US, flooding the world with their currencies, buying in larger bulk and bidding the US out of existence?

Best Answer

sounds about right..

One of the main reasons the price of gas at the pump is so high is because of futures trading on the commodities market. If enough people banded together with a few dollars a piece that they were willing to lose on the commodities market, they could have a real effect on the price of gas. Would such action be legal?

Best Answer

Market manipulation is illegal. I guess your scenario might be a first where people were attempting to manipulate the market in a way that would not favor them. The scenario isn't possible though... 1.) to affect the commodity market you'd need millions or billions to have an effect 2.) You'd have to SELL oil at a below market price to bring the price down -- and potentially effect the price of gas. You wouldn't be able to put enough pressure on the market though - if oil is at $115, there are too many buyers at $114, $113, etc. When you sell, you HAVE to take the highest bid, so you couldn't sell it to someone for, let's say $50 if there are bids above that.