“A more intriguing dynamic has been presented by Financial Times reporter Izabella Kaminska over the past year: Financiers are buying oil as collateral for various speculations. Kaminska sees this financial hoarding of oil (i.e., reduction of supply) as inducing ‘scarcity amidst plenty.’  In broad terms, I would characterize this as one aspect of the financialization of commodities.  The financialization of commodities is driven by several macro factors: 1. The scarcity of non-phantom, easily tradable collateral in a financial system that is increasingly dependent on phantom collateral. 2. A scarcity of sound investment opportunities.”

http://charleshughsmith.blogspot.com/2013/08/why-oil-could-move-higher-much-higher.html

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