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Why does it cost $40 to fill your gas tank one year and $80 the next?
What caused oil and gas prices to soar 600% from 20032008, only to take a nosedive and soar again over the next couple of years?
Why, if cheap energy sources are more abundant than ever, are we bankrupting our economy in order to make foreign oil producers even richer than they already are?
While there seems to be no shortage of "expert" opinions as to why oil prices have been behaving so erratically, the three most commonly given blame either the decline in the value of the U.S. dollar; China's insatiable hunger for oil; or investor fears of inflation.
Thoughtful people sense there is something wrong with this conventional wisdom about the oil markets, but they are hard pressed to say what it is. Are they correct? Is there another, more sinister force driving the oil's crazy price volatilitysomething glaringly obvious that the experts are missing or, worse, deliberately glossing over?
The short answer, according to author Dan Dicker, is yesand that missing "something" is, quite simply, that the oil markets are terribly broken. What broke them, and how can they be fixed before they drag us all down into an economic black hole, is the subject of Oil's Endless Bid.
Few authors are as qualified as Dan to write such a book. During his two decades as a NYMEX oil trader, he watched a clubby niche market explode into a firestorm of financial speculation fueled by a high-octane mix of unbridled greed, the malignant growth of exotic financial instruments, and a near-total lack of oversight.
Interweaving personal accounts with expert analysis, Dan reflects on his life as a trader before and after passage of the Commodities Futures Modernization Act opened up the oil markets to a flood of "dumb money." According to him, the "assetization" of oil, and the rapid growth of oil index funds and ETFs, has created an incessant upward pressure on the price of oilthe lifeblood of American industry. And that pressure has severed it from the practical realities of oil and the oil industries. Hence, "oil's endless bid."
The biggest victim of this latest speculative feeding frenzy is the American consumer, who pays the price at the pump and in the inflated costs of everythingfrom food and clothing to electric power and even lifesaving medications.
Oil's Endless Bid offers a unique insider's look at the modern face of oil trading, along with expert advice on how to immunize your assets from unpredictable price volatility in the markets. But perhaps, more important, it explains what corporate and government leaders can and must do to address this dire problem . . . before it's too late.
Praise for OIL'S ENDLESS BID
"Eye-opening for anyone who drives a car or uses a lightbulb. Dan Dicker draws on his years of experience at the heart of energy markets and uncovers why Americans are paying the price for huge funds to gamble in futures. By the end, he makes his case for some real-world solutions to a problem that is bound to spiral out of control once again. As compelling as it is entertaining."Melissa Francis, Host of CNBC's The Call
"Armed with the perspective of a market professional, Dan Dicker dives into the slick, murky world of oil trading and emerges with an illuminating cautionary tale." Daniel Gross, columnist for Yahoo! Finance and Newsweek
An industry insider tells the biggest financial story of the new millenniumhow we lost control of our oil markets
Leading energy industry analyst Dan Dicker recalls his twenty years as an oil trader and describes the huge changes that have taken place in the market over the past decade. He details the impact of the Commodities Futures Modernization Act on the oil market and how the financialization of oil transformed a sleepy niche market into a global Ponzi scheme. He explains how investment banks, energy hedge funds, managed future funds, and ETFs came to dominate energy trading and wreak havoc on the oil market and the world economy. And he exhorts government and corporate leaders to act to stabilize oil prices before it's too late.
The book is insightful, entertaining and for those interested in better understanding the world of commodities trading, a must read.
I would also suggest in addition to this book Oil 101 by Morton Downey; it comptements this book very well if you are interestsed in the energy markets.
Dan provides well evidenced claims about the effects of ETFs, institutional and commercial influences and the assetization of oil in recent years.
Well, what about his theories now?
"Endless" lasted three years.
Very interesting! If you ever wonder how petroleum products are priced and what goes on in those commodity pits - this is the book for you.Published 12 months ago by Opad D
This is an interesting perspective from an author who actually trades for a living. I enjoyed this book and learned from it.Published 17 months ago by Jeremy R. Thompson
The book starts off with a lot of emotive language that detracts from the author's credibility and valuable knowledge. Read morePublished 21 months ago by Stuart
This is the author's contention that oil prices are artificially high because oil has been turned into a financial instrument for quick profits by big Wall Street players such as... Read morePublished 24 months ago by SFPhil
This is a truly remarkable book.Dan takes you on a journey into the life of an oil trader from the early 1980's working in the pit at the NYMEX as a commodity trader,till present... Read morePublished on January 22, 2013 by Mr Heath
With a little money to invest and a computer, I'm a poster boy for Mr. Dicker's thesis--that the assetization of oil futures has allowed the free market to be pumped up by shlubs... Read morePublished on May 8, 2012 by Larry Blumen
For three or more obvious reasons this book is totally misleading!
Although "Higher Prices" Of Oil and Gasoline' result from SPECULATION
on the... Read more
Take Away The Punch Bowl From Wall Street. Contango may sound 'funny' like 'it takes two to Tango' but this ain't no laughing matter. Read morePublished on February 21, 2012 by Dr. Avian