Couldn't Help Myself: Yet More On Oil

I couldn't just leave well enough along, right?

The reason for the additional post was the fact that I clicked through the Yahoo! Finance front page to this article.

Though I certainly wouldn't mind it if this week's price action was the sound of the oil bubble popping, I'm not primarily concerned with that (on a side note, the title of this article is fairly poor because we aren't told whether it's the biggest dollar drop ever or biggest percentage drop. Given the high price of oil, it wouldn't be nearly as impressive if it was simply the biggest dollar drop ever). What I am interested in, though, is some of the commentary in the article which again brings me back to my "oil is not being driven by supply and demand alone" thesis.

For instance:

"Some brave traders used the week's pullback in oil prices as a chance to buy barrels that suddenly seemed to be on sale. But oil analysts were advising investors to beware."

or

"Still, with oil recording yet another drop on Friday, some industry experts who just days ago thought there was more juice left in oil's meteoric run are reconsidering."

or

"'Buying here is an opportunity if you are a deep believer in $200 (a barrel), otherwise we think that caution would be better applied,' analyst Olivier Jakob of Petromatrix in Switzerland said in a research note."

Do these sound like commentaries on a global commodity market being driven by supply and demand or a frothy financial market that's being closely watched by traders? In fact, I looked up Petromatrix's website and here's a bit from the firm's description:

"After 15 years experience in the commodity trading industry we have created Petromatrix as we found the market lacking independent coverage of the oil markets. At Petromatrix we are not offering any financial or brokerage services, all we care about is reading the market right. ... Our clients include oil majors, trading companies, international banks, hedge funds, down to private individuals. They value our track record, our concise reports, our speed at delivering analysis, our trading focus and experience."

Sounds to me based on this that there are an awful lot of investing / speculative players out there looking for data on oil. Is it possible they're also participating in the market? And I have to imagine that Petromatrix is only one of many firms offering this type of independent coverage of oil price expectations.

Things that make you go hmmmmm...

-AvgJoe