Saturday, November 12, 2011

Who really controls oil markets? - not speculators

When we look at global oil companies and interesting dichotomy exists. The largest oil firms are not private but state companies. In fact, the top ten oil companies are owned by governments. Exxon Mobil comes in at number 11 and Lukoil is at 15 in size. The next two private firms are at 19 and 20, respectively Royal Dutch Shell and BP.

So how can speculators control the price of oil markets when the largest firms are all in the hands of governments which may not have the same objectives as private firms own by shareholders and required to maximize profits?

State control of oil is the greatest danger to the oil markets.  

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