Ah, the Stop Oil Speculation Now crew (which is basically just an extension of ATA) started following me on Twitter yesterday, and it looks like they’re just getting started with that new medium. Apparently, now that oil has climbed up a bit it’s time for them to get going again. So, I noticed this tweet linking to this article.
Of course, that implies that the article says that Goldman is busy manipulating the oil market. Read what it says!
Oil’s spectacular recovery has got the bulls lowing all over again. Wall Street titan Goldman Sachs, the üeberbull of oil price forecasting through last year’s bubble, recently upped its end-2009 oil price forecast from $65 per barrel to $85 and instituted an end-2010 target price of $95.
They updated a forecast! Wow! Shocking! If that’s “inflating a new oil bubble,” then the members of the ATA are in big trouble. If the airlines aren’t constantly monitoring oil prices and updating their own forecasts for fuel prices then I would be concerned!
The article continues:
We disagree. Demand growth is anaemic, supply is more than adequate, and $70 oil is more a function of speculation than economics. We’ve identified five rules to help investors gauge what’s happening in the oil market and avoid making decisions that could end up being costly…”
Ironically, the article is now advocating for speculation, just the other way around as they think that oil is overpriced. (And traders could short oil it if they think that’s the case.) The authors, just like the speculators they criticize, are also making decisions on what they think the future will hold.
Anyway, I’ll have more on oil later this week/early next week.
The problem with the ATA’s claims are many with one of the main ones being that they don’t realize that speculation IS a KEY part of economics. If they’re so sure that this is a bubble, than the ATA should show to the public that they’re putting their own money where their mouth is (not just calling for others to do so). If this is merely some mysteriously all powerful person “manipulating” the entire world’s oil market, then surely the ATA should be able to profit from this.
The problem being of course that there is likely no manipulation occurring at all. It’s natural for things in life to fluctuate including the price of oil.