The global economy is facing a complex challenge, the nature and scale of which are quite unprecedented, possibly since the beginning of the industrial revolution. It is incumbent on distinguished ATCA members to nurture the Socratic Dialogue on this vital subject from first principles and not jump to hasty conclusions and simplistic remedies.

The data presented so far overwhelmingly appears to support a fundamental supply/demand imbalance, the former driven by resource constraints and investment shortfalls and the latter by the inclusion of ever greater numbers in the global consumer economy. The politically fashionable excoriation of energy market speculators is a futile attempt to divert the world's attention from supply and demand fundamentals and our profligate and inefficient uses of energy across the globe.

The daily volume of oil futures transactions represents an equal number of sales and purchases. Whence the conclusion that:

1. This activity should drive prices up and not down?; and
2. Producers and consumers buy and sell to "smooth out fluctuations"?

Traders in futures have no interest or intention to render the market such services, but are merely hedging or establishing a position for outright future sale or purchase.

In reality, oil prices will keep going up to the level where it meaningfully reduces demand. This is simple economics: we need more oil supply and/or less oil demand. Since there are various political, technological and geological constraints on growing supply, the markets are left with looking for the price at which demand is reduced. The principal effect of "speculators" is to provide liquidity. Their effect on final prices is in and of itself neither predictable nor measurable, although their likely losses over time may, if anything, tend to lower them.

Read the article at mi2g.net.

[ENDS]

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Best wishes


DK Matai

Chairman
Asymmetric Threats Contingency Alliance (ATCA) & The Philanthropia
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ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses asymmetric threats and social opportunities arising from climate chaos and the environment; radical poverty and microfinance; geo-politics and energy; organised crime & extremism; advanced technologies -- bio, info, nano, robo & AI; demographic skews and resource shortages; pandemics; financial systems and systemic risk; as well as transhumanism and ethics. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at Academic Centres of Excellence; 500 Inventors and Original thinkers; as well as 250 Editors-in-Chief of major media.

The Philanthropia, founded in 2005, brings together over 1,000 leading individual and private philanthropists, family offices, foundations, private banks, non-governmental organisations and specialist advisors to address complex global challenges such as countering climate chaos, reducing radical poverty and developing global leadership for the younger generation through the appliance of science and technology, leveraging acumen and finance, as well as encouraging collaboration with a strong commitment to ethics. Philanthropia emphasises multi-faith spiritual values: introspection, healthy living and ecology. Philanthropia Targets: Countering climate chaos and carbon neutrality; Eliminating radical poverty -- through micro-credit schemes, empowerment of women and more responsible capitalism; Leadership for the Younger Generation; and Corporate and social responsibility.
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