Oil Futures.

[JustJason]

Re: Oil Futures.

I've had more than a few of my own threads on oil closed because they were or turned political, so I won't be talking politics in this post.

The price of oil, or moreso the crazy inflation, in my eyes, is not supply and demand. There's a natural cycle to everything, and when the cycle is broken (as in the price of oil, or oil futures, whatever you like to call it) it's reason is certainly not natural.

I read every day. All I can, from articles from the respectable AP and Rueters to hoopla blogs and everything in between.
To me the price of oil is highly manipulated. I read 1 day about 2 weeks ago that "an analyst from Goldman Sachs expects oil to go to 150 by July 4th" and Bammm oil is up 10 bucks a barrell.
I read that is in 1 guy, 1 analyst at 1 company just guesses or flat out wants the price of oil to go up, so he does his report, and the market freaks and the price goes up. Now there's 300 million in the US alone, so 1 guy just decided/influenced the price for 300 million of us. If that is not manipulation than what is.

Publicly traded companies have an legal obligation to make money for shareholders. Point blank. We the people let oil be publicly traded companies since the dawn of oil because it was never a problem. But now it is.

Whenever something sounds fishy, like down in your gut fishy, it usually is, you just have to either prove it or rationalize it. Thats step 1, then you have to do something about it, that's step 2.

The problem is that we are all frogs in a cold pot. Everyone knows that one right???? If you put a frog and cold water and slowly bring the water to a boil then you will kill the frog. But if you put a frog into boiling water it will jump right out.

Executives know this, in fact they are gambleing on it, hedging on it, or however you want to think about it.
Executives have and obligation (it's in our own laws) to make money for their shareholders, and certainly themselves. Does anybody believe that an oil exec making 10 to 20 million a year cares what percentage of income the average people are paying for their fuel??? heck no.

I ask everyone to imagine that they are an oil exec. Then imagine that they are a Dr Evil, evil genius type person. What would you do to make money if you had no morals, or didn't care because you were personally becoming filthy rich by the company paying you to make decisions that make them (and yourself) money.
There are evil people out there. To not believe it is hogwash. There are people out there with millions of bucks, and all they want are millions more, and they will do or say anything to have it.
They will sacrifice their own soul and own morality and the born gift of the sense of right and wrong just to have it. And we all pay for it.
And it's awefull that these people are in power, or have the ability to manipulate the masses. I also believe that alot of these people started out as good honest folks, just like everyone else. But then somebody comes along and waves a few million bucks over their heads and then the good folk makes a decision along the way, and so on and so forth.

To believe that oil was 20 bucks a barrell 8 years ago and 130+ today is natural supply and demand you are so blind. It is completely unnatural and now we have to find the reasons why.
So my fellow frogs, how hot are we going to let this water get?


Please do not delete this post JB as you have deleted other posts of mine. there is nothing political in it.

 

[cheburashka]

Re: Oil Futures.

So my fellow frogs, how hot are we going to let this water get?

For me, it's a matter of how much I'm able to cut back. However, there are a lot of things that seemed indispensable back when gas was $3.00 a gallon which are now dispensable at $4.00 a gallon. I'm fortunate in that I never have to decide between fuel and other important things in life. I skip a trip now and then, or decide not to go do something across town until I have something else that I need to do there too. Others aren't that lucky. I've still got plenty of room to cut back, and as long as that's the case, I'll weather the price increases.

The problem is that some of the frogs are going to start dying. I have a brother who has a 150 mile per day commute. He's currently driving a Geo Metro and making good money so it still makes sense for him, but there are a lot of folks who will eventually realize that given their current incomes and their current gas expenditures, they're fighting a losing battle. I lived in CA for a long time, where 200 mile per day commutes are common. When folks start paying $50 or $60 a day to commute to a job where they make $110 a day, you're going to have some angry froggies.

 

[OldMercsRule]

Re: Oil Futures.

Murky, 90 miles is not "a few miles." Even if it were, China is not drilling in Cuba.

Yer skills at reading English are not so hot Che, your own source states the Chinese are "drilling" on the island of Cuba. The offshore oil as close to 50 miles off Florida may be recovered by non Chinese groups, I did count on news reports that the Chinese were drilling off shore as well that are now in question based on your cite. Does not change the debate at all. Whether Chinese or Martians do it Democrats will not allow us to do it. THAT IS THE PROFOUND POINT YOU ARE MISSING.

China has an exploration lease and has done seismic testing, but has not even sunk an exploratory well yet. I don't see why you can't own up to the fact that you were mistaken. **** Cheney did. I don't fault you for the mistake. It came from a reliable source.

Just did, see above.

However, you used this "fact" to justify the argument that we should be pulling oil out of the ocean off of Florida because China is already doing so.

I said China was drilling, (they are on the island accordinng to your own source if ya can read), and exploration is underway within 50 miles off Florida.

Remove the "fact" and the argument falls apart. China has exploratory wells in Cuba.

Ya just said they were not drilling, what is a "well" Mr English teacher?

To my mind, that doesn't justify drilling in the ocean off of the Florida coast.

You have said increase in supply will not drop prices, that is cracked and ignorant of basic economics.

Up to this point, most of what you've done is to simply repeat that whatever I have said is silly, simple, or clueless, but you've never given a solid reason why.

Yes I did you can't read English. It is "silly, simple and clueless" fer an educated idiot to claim that increased supply of oil will not drop prices of oil or decrease in demand for oil will not decrease oil prices.

You've leveled personal insults at me, and at my ability to do my job, and again you've given no reason why.

You can't read English, you state fundamental economic laws don't werk, (when they do). How can ya teach others with such fundamental problems with yer cognative abilities.

To me, that speaks of a personal grudge rather than an attempt to sort out the topic of oil futures.

I don't like being called a liar when I am not, (I have no grudge against you: Che).

The only actual argument I've seen from you which responds to my points reasonably was this:

"if the worlds largest cornsumer of a world wide commodity (known as oil) significantly reduces demand the prices would drop"

and this:

"if significant supply, (or even the perception of seriously searching for significant supply), should occur prices would drop as the speculators lost money on thier trades. "

The first statement may be true, but I would question it.

Learn to read and comprehend English, ya stated a 180 degree different cornclusion on basic economics.

If we were to reduce our oil usage by 10%, the impact on the total market would be a 2.6% reduction in the overall demand for fuel worldwide. The question at that point for the oil producers would be whether to lower prices and offer more product at lower margins, or to lower production and maintain margins.

The market, (supply demand), sets prices the producers don't, yer cornfused with socialism. Hit the books.


The second statement simply begs the question--why would a company in the business of selling oil want to do something that would decrease the prices, and hence their profits?

Your fundamental lack of knowledge of basic bidness corncepts is stunning. Did you get a post high school degree? Where; out of a box of Cracker Jacks? The oil companies would increase supply to make more revenues, other competitors would do the same due to the attractive price and that activity of all oil companies would increase supply and would bring down prices in the MARKET, (supply demand). If a company increased revinues by producing more oil, the drop in market price from the increased supply and that drop may reduce their margins, but their profits could still grow on the increased revenue. Real simple (takes only one engaged brain cell and the ability to read and comprehend plain English).

That's what I'm talking about. I admit, I'm no economist,

No you are not.

and I'm open to correction (not attack, but correction) but this is how it seems to me: The oil is there, but it isn't in Mobil or Chevron's interest to start pulling it out of the ground at greater cost to them than their current supplies when they've kept the same profit margins regardless of the price. In other words, the more it sells for, the higher their profits. Money for nothing. To you, that might seem like simple supply and demand, but to me it seems far more complex.

It shows me you do not understand bidness at all. Hit the books. Bidnesses maxiize profits not just their margins.

In short, and as I have said throughout this thread, supply and demand still applies,

Now your changin' what you innitially said; go back and read what you said. YOU SPECIFICALLY DENIED THE RELATIONSHIP OF SUPPLY/DEMAND TO PRICE.

but when "supply" can be extensively manipulated to drive prices up, and demand has more to do with Goldman Sachs than with actual usage, "supply and demand" becomes an entirely different ball game with different rules.

Only to people as clueless as you.

You've compared supply and demand to gravity. It's far more complex than gravity, but you're right in one way. It sucks.

You just don't get it. That doesn't stop you from running at the mouth.

I have to wonder why is it that you seem so inclined to throw out these personal attacks based on the ideas I'm putting out here? I'm just interested in inserting some new ideas and factual information into this discussion. I'm not the only one here who has pointed out that the oil markets are heavily manipulated and that drilling on US soil won't necessarily solve our problems. Apparently, there are a lot of folks here who are silly, simple, and clueless.

Yep.

If you want a debate, perhaps you should bring some ideas. If you want to give the appearance that you've lost the argument, keep up with the personal attacks.

If we increase supply and reduce demand prices will fall. Real simple takes one engaged brain cell. JR

 

[rolmops]

Re: Oil Futures.

Murky,it is good to read your comments again.They hold a lot of good information and some opinions to boot.
You know,this thread has been alive for a very long time now and people have been very civilized in their comments.I would hate to have it go the way of the big padlock.So please,try to keep it squeaky clean.

 

[SS MAYFLOAT]

Re: Oil Futures.

^^^^^^ What he said

 

[SpinnerBait_Nut]

Re: Oil Futures.

Chill out folks, Last warning.

 

[cheburashka]

Re: Oil Futures.

Chill out folks, Last warning.

OK, I'll drop it.

I've got to tell you though, I feel kind of like Mayfloat did when he showed up at the launch and somebody had an off-leash dog that didn't know how to behave around people. I come here to talk about stuff, not to get barked at.

 

[JustJason]

Re: Oil Futures.

it also would be pretty cool if we could have just 1 type thread about this, 1 that will never get closed. 1 that if you don't like it don't read it type thread

 

[SpinnerBait_Nut]

Re: Oil Futures.

it also would be pretty cool if we could have just 1 type thread about this, 1 that will never get closed. 1 that if you don't like it don't read it type thread

Never happen. People just can't be cool about it.

 

[Limited-Time]

Re: Oil Futures.

it also would be pretty cool if we could have just 1 type thread about this, 1 that will never get closed. 1 that if you don't like it don't read it type thread

Now theres a novel concept!!

 

[cheburashka]

Re: Oil Futures.

Well then, let's keep it open. I read in a letter to the editor that claimed out of the $4.25 you pay for a gallon of gas, $2.55 goes to speculators on the futures market. Mark Cooper of the Consumer Federations of America is a bit more conservative, but he claims gas should cost $2.25 a gallon, and that anything above that is going straight into the pockets of speculators. Can anyone verify these stats?

If this is all true, how long can it go on? Seems to me that this was the kind of thing that was going on with Enron, and that things will eventually fall apart when the bubble bursts. But hey--I'm a cynic. I have a very hard time believing that prices will ever drop down below what they were three months ago.

 

[rolmops]

Re: Oil Futures.

Well then, let's keep it open. I read in a letter to the editor that claimed out of the $4.25 you pay for a gallon of gas, $2.55 goes to speculators on the futures market. Mark Cooper of the Consumer Federations of America is a bit more conservative, but he claims gas should cost $2.25 a gallon, and that anything above that is going straight into the pockets of speculators. Can anyone verify these stats?

If this is all true, how long can it go on? Seems to me that this was the kind of thing that was going on with Enron, and that things will eventually fall apart when the bubble bursts. But hey--I'm a cynic. I have a very hard time believing that prices will ever drop down below what they were three months ago.

Dependent on the political and financial power of the main players it can be very short or very long.
My personal guess is that this is allowed to happen so certain financial institutions,that really whacked themselves in the sub prime loan business,can recover by some very greedy speculation.

 

[OldMercsRule]

Re: Oil Futures.

Supply and demand in any commodities market (like the world's oil markets) sets the price. People who have no clue may say other things to influance public policy for an objective they may have but they are wrong about the cause. The current hype about speculation is jus' a boogyman to change the subject and keep people from paying attention to the real causes of the problem.

Speculators just identify the trend that has been established by the supply demand situation and try to exploit said trend. They may make things move much quicker then they would otherwise, but no sustained price movements will occur on speculation alone.

From 1985 to about 2003 there was more supply and the flexability and willingness by the worlds producers to increase supply of oil to meet the actual demand during that period. The producers were not sufficiently coordinated to minipulate enough production to change the dynamics of basicly flat price situation where demand and supply was in equlibrium fer many years.

Demand kept growing. The real significant demand that was growing relentlessly was India and China, and other developing nations. In 2003 the demand exceeded the easy ability to supply this world wide level of demand and prices began to trend upward.

The primary currency that oil transactions are paid for is the dollar and the weakness of the dollar has exagerated the movement in the worlds largest cornsumer market.

Once the upward trend has been established speculators began to take positions to try to make money on the trend. News events that indicate the factors creating the underlying relative supply shortage or the increased demand will move prices as speculators act on supply demand news developments.

The news is not good. Demand in America has wained due to price but the demand overseas seems steady.

Domesitcally, one of the major political parties has cornsistently restricted supply, (for many MANY years), and has also restricted alternatives they find unfashionable to their political interests like neuclear power and coal/oil cornversion. This is not an accident, this is by design.

One of the two major Presidential Candidates openly recently stated that the price increase is desirable, but it has just happened too fast.

Speculators react to that news and the price goes up.

If the world thought the USA was serious about energy production and allowed our companies, (the world's best), to start drilling known potential reserves, allowed nuclear plants to be cornstructed, allowed coal to be mined and cornverted to oil the speculators would react very rapidly and the price of oil would come down.

There is zero evidence we are serious. Politicians are proposing punishment of the domestic oil industry for the problems they created in the first place, (prices understandably went up on that news). They are establishing investigations into "speculation" activities so keep kool aide drinkers occupied.

Once this foolishness runs it's course and the politicians who have intentionally created this situation are voted out of office, oil will come back down in price if we increase supply of oil and energy alternatives.

Real simple to understand. Takes only one engaged brain cell. Respectfully, JR

 

[57whitehouse]

Re: Oil Futures.

OMR, took me a minute to read that last post carefully and I have come to a conclusion.

BULLSEYE!!!

 

[Tail_Gunner]

Re: Oil Futures.

Supply and demand in any commodities market (like the world's oil markets) sets the price. People who have no clue may say other things to influance public policy for an objective they may have but they are wrong about the cause. The current hype about speculation is jus' a boogyman to change the subject and keep people from paying attention to the real causes of the problem.

Speculators just identify the trend that has been established by the supply demand situation and try to exploit said trend. They may make things move much quicker then they would otherwise, but no sistained price movements will occur on speculation alone.

From 1985 to about 2003 there was more supply and the flexability and willingness by the worlds producers to increase supply of oil to meet the actual demand during that period. The producers were not sufficiently coordinated to minipulate enough production to change the dynamics of basicly flat price situation where demand and supply was in equlibrium fer many years.

Demand kept growing. The real significant demand that was growing relentlessly was India and China, and other developing nations. In 2003 the demand exceeded the easy ability to supply this world wide level of demand and prices began to trend upward.

The primary currency that oil transactions are paid for is the dollar and the weakness of the dollar has exagerated the movement in the worlds largest cornsumer market.

Once the upward trend has been established speculators began to take positions to try to make money on the trend. News events that indicate the factors creating the underlying relative supply shortage or the increased demand will move prices as speculators act on supply demand news developments.

The news is not good. Demand in America has wained due to price but the demand overseas seems steady.

Domesitcally, one of the major political parties has cornsistently restricted supply, (for many MANY years), and has also restricted alternatives they find unfashionable to their political interests like neuclear power and coal/oil cornversion. This is not an accident, this is by design.

One of the two major Presidential Candidates openly recently stated that the price increase is desirable, but it has just happened too fast.

Speculators react to that news and the price goes up.

If the world thought the USA was serious about energy production and allowed our companies, (the world's best), to start drilling known potential reserves, allowed nuclear plants to be cornstructed, allowed coal to be mined and cornverted to oil the speculators would react very rapidly and the price of oil would come down.

There is zero evidence we are serious. Politicians are proposing punishment of the domestic oil industry for the problems they created in the first place, (prices understandably went up on that news). They are establishing investigations into "speculation" activities so keep kool aide drinkers occupied.

Once this foolishness runs it's course and the politicians who have intentionally created this situation are voted out of office, oil will come back down in price if we increase supply of oil and energy alternatives.

Real simple to understand. Takes only one engaged brain cell. Respectfully, JR

?Au contraire, mon capitan.....Shall we have a short discussion on oil future's, how there bought and sold...and by the way just "where" there bought and sold..... and just "who" has the money to make such large cash investment's.

Along the way should we include the World Bank...Opec...Goldman Sach's. I feel this is a topic better suited for you bro...This knuckle dragger might miss a step or two...But i think it is time for the US public at large to know the process....and it's all quite legal by the letter or the law for now.....but as to the spirit...there in "lies" the secret...does it not..........


Dont get pololical now bro both sides are involved.

 

[fdmsiv]

Re: Oil Futures.

The notion that oil prices have soared based on supply and demand are bogus at best. The Saudi's have agree to produce more oil, what happened to the price? Went down one or two dollars that day, but the next it shot up $5.

BP's monstrous production rig Thunderhorse is coming on line any day, I hear they pumped a couple of barrels already. BP can produce (ready for the refinery) 250,000 bbls a day, thats 7.75 million gallons a day or 5,381 gallons per second, everyday all day including holidays. That is huge rise in the supply, and since demand has not increased overnight, the price should fall, but whats happening? NOTHING!

 

[OldMercsRule]

Re: Oil Futures.

?Au contraire, mon capitan.....Shall we have a short discussion on oil future's, how there bought and sold...and by the way just "where" there bought and sold..... and just "who" has the money to make such large cash investment's.

Along the way should we include the World Bank...Opec...Goldman Sach's. I feel this is a topic better suited for you bro...This knuckle dragger might miss a step or two...But i think it is time for the US public at large to know the process....and it's all quite legal by the letter or the law for now.....but as to the spirit...there in "lies" the secret...does it not..........


Dont get pololical now bro both sides are involved.

TG, we live in a levered up world that has increased nearly every year since the end of WWII, (the peak would have been 1998 had we not bailed LTC out).

Commodities markets and now the MASSIVE tradin' of financial dirivitives are a growth bidness, and the hedge fund world should have been allowed to crash with the implosion of Long Term Capital, (as you know I have stated many times). That would have changed the appitite fer borrowed money and risk in America, the bail out was a turbo button.

Since Greenspan steped up and bailed it, (LTC) out (as the cornventional wisdom of he a Rubin and the majority on Wall Street [from both side of the political isle as well]), was that the pain would have been too great.

My former employer (one of many huge Wall Street firms that cooperated with the Fed to bail out the system and save LTC) and they allowed hedge funds to go on largely unregulated.

My former Firm gave $250,000,000. as one of many of the biggest firms did. That lead to the dot bomb blow up where the hot money Greenspan printed finally blew up in 1999.

Speculators are doin' what the dot bomb boys did in 1999. This is a direct result of the hot Katrina money and the housing collapse, (that would have sucked up most of the hot money if the peak had not happened with sub prime as it did). The dollar wind falls over seas are now corncentrating their capital into "Soverign Funds" with far greater capital that is now making very big bets and wracking our system.

All the hot money is now chaisin' food, commodity and oil price trends. Hot money always does that: FOLKS. It is not the fault of this POTUS or the last one either. It hurts us all to have such high energy prices so the natural tendency is to create a boogyman: SPECULATION. Speculators always do what these speculators are doin'. when they go too far open up the spigot n' crush 'em don't bail 'em out.

Don't punish domestic oil companies that only earn 8.5% or less on their net returns, (well below most American industries). It will only make matters worse. Open up coal to oil options to them (or others) give tax breaks to stimulate this industry if need be.

Then open up all drilling with stiff penalties fer wreckin' the environment. This would crush speculators.

I'm a Capitalist TG. I believe in the private sector not NANNY GUBMINT.

Respectfully, JR

 

[OldMercsRule]

Re: Oil Futures.

The notion that oil prices have soared based on supply and demand are bogus at best.

Yeah it is some fellers from Mars pullin' majic strings, haven't ya heard? The world is flat and gravity doesn't werk either.

The Saudi's have agree to produce more oil, what happened to the price? Went down one or two dollars that day, but the next it shot up $5.

BP's monstrous production rig Thunderhorse is coming on line any day, I hear they pumped a couple of barrels already. BP can produce (ready for the refinery) 250,000 bbls a day, thats 7.75 million gallons a day or 5,381 gallons per second, everyday all day including holidays. That is huge rise in the supply, and since demand has not increased overnight, the price should fall, but whats happening? NOTHING

Why don't ya cornpare the numbers yer talkin' to the total world wide production and cornsumption.

Then if ya can think a weeeeee bit, ponder if the Saudis are blowin' smoke and can't sustain such an increase. Have you ever heard the phrase: talk is cheap? Are you 100% sure they can. If demand corntinues will they? For how long?

What if Iran's nuclear program suddenly goes away. How do these numbers look then? Supply and Demand have no bearing ya say??? Yasureyabetcha. I have a bridge fer sale, real cheap. JR

 

[fdmsiv]

Re: Oil Futures.

My point is that there is an increase in supply, the demand is constant, and the price still climbs. The number aren't adding up. Will the saudis continue with elevated production? Don't know. What I do know is they are putting out more for now.

The supply end of the equation is getting bigger and bigger. Oil companies are doing whatever they can to get the oil out of the ground. It reminds me of the gold rush of mid 1800's. Crewboats are coming out of retirement to supply the drilling, exploration, and the rigs themselves in the gulf. Ideas that were not feasible a couple years ago are now viable and the drillers are using everything they can to take advantage of the prices.

Finally, the thought that everyone in china and india woke up one day and decided to buy a car and start driving is ridiculous. The price of oil has tripled in the past 18 months, does this mean that the people of india and china have tripled their consumption in 18 months? I just doesn't make sense. The weak dollar has something to do with the rise, but saying that it is supply and demand is wrong in my opinion.

 

[OldMercsRule]

Re: Oil Futures.

My point is that there is an increase in supply, the demand is constant, and the price still climbs.

You are analyzin' a spec of time with a single statement of intent of unknown reliability in a huge market of 85 mil Barrells per day + or - and drawing some enormous cornclusions about supply and demand in a huge very cornplex dynamic world. Supply and Demand DOMINATES this issue regardless of what you think or don't think: PERIOD.


The number aren't adding up. Will the saudis continue with elevated production? Don't know. What I do know is they are putting out more for now.

Just HOW DO YOU KNOW THAT? The Saudis are much less transparent then you may think. They have been known to try to talk up or down this and that in the past without follow through.

The supply end of the equation is getting bigger and bigger. Oil companies are doing whatever they can to get the oil out of the ground. It reminds me of the gold rush of mid 1800's. Crewboats are coming out of retirement to supply the drilling, exploration, and the rigs themselves in the gulf. Ideas that were not feasible a couple years ago are now viable and the drillers are using everything they can to take advantage of the prices.

Funny how demand driven high prices motivate capitalists to try to increase supply. The real problem is the political limits on where they are allowed to drill.

Finally, the thought that everyone in china and india woke up one day and decided to buy a car and start driving is ridiculous. The price of oil has tripled in the past 18 months, does this mean that the people of india and china have tripled their consumption in 18 months?

You are really dense aren't ya? The Chinese and India have been building large industrial complexes n' doin' some serious production fer many years, their demand has been raipidly growing fer more then 20 years, as have their economies. The rapid decline of the dollar and significant speculation magnified the dollar price of oil.

I just doesn't make sense.

Sure it does. Yer jus' thinking in video game time bits. Hit the books.

The weak dollar has something to do with the rise, but saying that it is supply and demand is wrong in my opinion.

Yer opinion is wrong: sport, sorry. It is supply and demand, takes one engaged brain cell ta get it. Respectfully, JR