Chez Chesler

Remember when oil prices spiked in the summer? At the time, the blame was placed on speculators. (Other sources did not blame speculators.) I didn't understand this. A speculator doesn't make the market, the speculator is betting on the market. (I've noticed that every time the weatherman says it's going to rain, we get rainly weather. I wish he'd stop saying we're getting rain.) For everyone who commits to buying oil at a certain price, for a price, there is someone who takes that price now, betting that he'll be able to buy the oil to sell at that price at a lower price. I was wondering who those speculators were. Now I know, because the Boston Globe said I'm supposed to feel sorry for people who locked in their home heating oil contracts at $4 per gallon.

Labels: contracts, free markets, laissez-faire, oil, speculators, zero-sum