After crude drained, fundamentals are clear: Pro
At that time, Sanders was one of many people who called for government intervention in the rising price of crude.
In today’s market, however, many consider the oversupply is the culprit of downward pressure in oil prices.
“If the market is going up, you buy; if you think it’s going down, you sell. It’s a matter of supply and demand,” Brad Schaeffer, natural gas options/futures Broker at BlackBarrel Energy, told CNBC’s “Closing Bell” on Friday.
-
Don’t believe oil bump, $18 still coming:Kilduff -
Trouble ahead: Why 2016 keeps gettinguglier
Schaeffer told CNBC that the general population commonly confuses futures trading and the equities market. This misconception, Schaeffer says, is why speculators might have been blamed for market conditions when crude prices were high.
“They’re really not the same thing,” he sustained. “In the oil context, these futures contracts are just agreements to buy or sell some sort of commodity sometime in the future,” adding that they are cyclical and often used as a hedging tool.
While many have gotten into the investment side of commodities, this market “is not investment per se,” he noted.
Commodities differ from equities, he says, because their prices are ruled by fundamentals.
“When you think of equities … you’ve got management, you’ve got activist chair holders; you got everybody trying to push that up,” he said.
[“source -cncb”]
