>>>>Interesting assertions and similes; but inaccurate, as any perusal of the daily news reports on the world's concerns, as reflected in UN actions, about Iran's nuclear and non-nuclear ambitions makes clear. Having them on the commission does not give them veto power, so in fact it gives them nothing of substance, while providing another context for engagement.
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>>>>>Your statement:
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>>>>>"As for Iran being on the disarmament commission, there's an Arab saying that goes something like "better to have your enemy in your tent.""
>>>>>
>>>>>Does not apply and is flawed. In the above statement, it is you who is watching your enemy. In the case of the UN, it is truly the "Fox guarding the hen house" -- the Fox (Iraq) is not being being watched by other Foxes or Dogs to ensure that they do not eat the hens.
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>>>It is to Iran's advantage to talk up their nuclear ambitions, since it increases the price of their oil. I don't mean that they don't have nuclear ambitions, only that maybe they discovered that their talk is profitable.
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>>An excellent point!
>>And it makes for an excellent reason to examine how the price of oil is set, too.
>>
>>Why does the price of any commodity change based strictly on speculation???
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>There may be good reasons. Suppose you need x material for your factory or economy to work and there is the possibility, or at least you fear there is a possibility, of scarcity. It may be prudent to stockpile it even if you have to pay extra for the cushion, because the cost of not having is high, if it should happen. Naturally, there are other players that don't need the item but decide to stockpile it in order to sell it to you later when you are desperate.
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>>What do the "traders" who set the price have to lose if the price of a commodity goes down? My understanding is that theoretically they lose nothing. Yet they ae always so anxious to raise the price of their commodity on the vaguest and silliest of rumours. Sure looks like there's some payoff for them for higher prices.
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>If they are holding inventory they can have a substantial loss, especially if they borrowed to stockpile.
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>>I simply cannot understand why any rumour, and even most actual events, should have ANY bearing on the price of a commodity. Except for the probability that someone somewhere is making lots of extra money by the fact.
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>There are other posibilities. As mentioned above, true scarcity can be disastrous or very expensive, as one example.

OK, the idea that a company depends on a commodity and so is willing to pay extra for it under certain circumstances is a good one. But then it would be that company looking to make the purchase, not some commodity trader. And he surely wouldn't pay a whole lot extra just because the news had some story that 2 jeeps were blown up trying to attack an oil installation in Saudi Arabia or the U.S. was talking about nuking Iran. And why would the price for the raw commodity go up just because a few refineries on the Gulf coast were out of business for a while???? In fact shouldn't that mean less is to be bought because there's fewer places to process the commodity???

In any case we have an odd-ball sitaution with the oil business.
On the one hand we have the oil companies at the retail end who need the product so they can sell it to consumers. So they have to "buy" it from somewhere. BUT... they buy it from themselves! All of the major oil fields are under long term contract to the big oil companies. So where is their incentive to keep prices low, especially on a commodity that has now become a required staple of daily life? The answer is that they have incentive only to raise the price, as high and as often as they can.

A RUMOUR - especially the most vague/silly rumours flitting about today - have no bearing on any looming shortage. Yet it is rumours that fuel oil price increases. Why?... because it is good for the oil companies to raise prices, so they use any excuse to do so.
We are repeatedly told that it is all "regulated" by the laws of supply and demand. The events of the last few years have shown this to be a sham of the highest order.

Finally, you simply don't see the same or similar rumours having the same effect on other commodities (except gold, which has no real use), all of which are equally important to their own using industries.