99% of oil futures are traded between institutions: airlines,
transportation companies, insurance compaines, banks, investment firms,
retirement funds, that sort of thing.
The primary reason oil and other commodities spiked last year was a
wholesale switchover away from housing markets, as the subprime crisis hit.
As the above invertors ("speculators") realized the mounting losses in
housing, they hurriedly pulled their money out and put it into the next
best thing: commodities. That's why foodstuff commodities spiked at the
When the subprime crisis hit - speculator who were using
credit via equity-swaps evaporated and became more
susceptible to losses in the derivatives and commodities
market. Food stuff commodies were increasing before the
subprime crash and have stablized during the following
recession. Increase energy cost and increase production
of bio fuels - ethnanol in particular - has been blame for
the rise in food stuff. Enron has been charged with
manipulating electric utility prices higher. Increase
use of oil by the world (especially the USA and China),
the lack of Iraqi oil production due to the Iraqi War,
and low production levels of "sweet crude" high grade oil
has also been said to put pressure on the cost
oil base fuels.
If global climate trends continue - large tracts of land previously
covered by ice will be accessible for oil and natural gas exploration
and extraction. This may delay the year that world oil output peaks.
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