ID :
201217
Sun, 08/14/2011 - 17:10
Auther :
Shortlink :
https://oananews.org//node/201217
The shortlink copeid
Paper oil causing more troubles
TEHRAN, Aug. 14 (MNA) - Economic activity is regarded by many as a major factor influencing energy prices. Demand for energy increases when there is a rise in economic activity. Thus, there is a direct relationship between economic activity and demand for oil in the global market.
Fluctuation in the energy prices in markets such as New York NYMEX is in fact a reflection of the “paper oil” and not the real price of oil. These unreal prices can have dramatic impacts on oil transactions in the world markets.
The term was first explained by F. William Engdahl. He says: “how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”
Last week's developments in the global financial markets were likely to project a new wave of recession in the United States and Europe. The outcomes of this economic wrangling were soon visible in the price of commodities that demand for them depends on the economic growth.
Therefore, the energy markets were quickly affected and the price of oil dropped about ten dollars. More directly speaking, the predicted recession resulted in a lower demand for oil and caused buyers of the oil to become sellers.
In other words, these new sellers are no longer interested in buying the paper oil, and they are looking for new buyers to sell the already bought oil.
Many believe that if there is no projection for a possible rise in the dynamics of the global economy, the oil market will experience no hike in the near future.
( By Dr. Nersi Ghorban, an energy expert and economic analyst and an independent energy consultant in UK and Iran since 1979.)
Fluctuation in the energy prices in markets such as New York NYMEX is in fact a reflection of the “paper oil” and not the real price of oil. These unreal prices can have dramatic impacts on oil transactions in the world markets.
The term was first explained by F. William Engdahl. He says: “how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”
Last week's developments in the global financial markets were likely to project a new wave of recession in the United States and Europe. The outcomes of this economic wrangling were soon visible in the price of commodities that demand for them depends on the economic growth.
Therefore, the energy markets were quickly affected and the price of oil dropped about ten dollars. More directly speaking, the predicted recession resulted in a lower demand for oil and caused buyers of the oil to become sellers.
In other words, these new sellers are no longer interested in buying the paper oil, and they are looking for new buyers to sell the already bought oil.
Many believe that if there is no projection for a possible rise in the dynamics of the global economy, the oil market will experience no hike in the near future.
( By Dr. Nersi Ghorban, an energy expert and economic analyst and an independent energy consultant in UK and Iran since 1979.)
