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Why has the price of oil dropped so low so quickly?

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Plot of S&P Composite Real Price-Earnings Rati...

Image via Wikipedia

It seems to me no coincidence that catastrophic stock market drops have seemingly happened at the same that oil futures have tanked so dramatically. Is it possible that some hedge funds were involved in speccing the price of oil up and then with all the grief from the stock markets they had to dump their oil futures positions?

Is there somebody out there who reads this? I would like to see some real research about this.

It is true that drivers in North America have reacted to high pump prices by reducing miles driven by as much as 10% during the last 12 months. And that has had an impact on the market pricing of oil futures. But surely that is not the whole story!

Latest news 8/11/21

UPDATE 8/12/4

We Canadians follow the price of oil futures with great interest since our $$ track the oil futures price very closely. I am more convinced than ever that speculators are wringing oil for its worth on the way up and now on the way down. The BASTARDS!

A sample of crude oil from Haenigsen, Germany.

Image via Wikipedia

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Written by BobG in Dalian & Vancouver

2008/10/25 at 05:16

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