A few months weeks ago, in October 17th. The Economist published the following:
“But oil’s attractions to investors have recently increased because the market has moved into “backwardation”, where futures prices are lower than the current (spot) price. Investors can thus earn a “roll yield” by buying the future and waiting for the price to rise to the spot level.”
Indeed, such thing happened just one day ago when the price o oil reached a historical price of US$96.00/barrel and it is still on the rise.
Oil is a commody that is very VERY volatile and elastic due to demand. And specially due to speculative demand, were investors can push the prices to reach “high enough” levels that consumers will agree upon. What you may not know is that a push in that speculative demand is one more component of high oil prices that render millions of dollars to investors, and also to producers while demand starts declining and prices stabilize.
However, while the rise in oil prices stimulate the research of alternative means of fuel such as ethanol and natural gas; the overall prices of commodities will rise. We are not running out of oil, but we are also not gaining any money from price elasticity of oil. Meanwhile, research will always be at work in order to find cheaper ways of fueling the world economy! Indeed, human history is all about that: learning better ways of saving resources, increasing profitability and offering final products at a competitive price to satisfy consumers needs.
This is all about progress, and progress occurs because of research, and research occurs only where there is enough money and savings to pay for better means of gaining money. Do you think this is bad? Is it immoral?
Isn’t this actually one of the best ways of creating a better life for human kind?
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