The Real Skinny About Oil
I have posted something like this not to long ago. now after reading this article now I think the economy in this state and the country will take a huge dump. check this article out and post your comments. since people today have forgtten economics from high school and college.
http://www.bloomberg.com/apps/news?p...YOo&refer=home
Gas reaching this price has come to no surprise to me. i'm not in the oil business - I just watch it.[:D]
http://www.bloomberg.com/apps/news?p...YOo&refer=home
Gas reaching this price has come to no surprise to me. i'm not in the oil business - I just watch it.[:D]
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Nothing will dissuade me from thinking the following:
Oil is traded on the commodities market. The price of oil is set by what investors THINK it MIGHT be worth tomorrow, or next month, or whatnot. Just like gold, silver, etc. Oil companies do NOT set the prices; OPEC doesn't either. We're their biggest customer and while they manipulate what the investors do by controlling supply, they will sell it to us for what we are willing to pay. What the INVESTORS pay. It's not as if they will sit on it; they WANT to sell it and get greasily rich, be it at $10 or $100 a barrel.
Ergo, the reason that gas prices are high is because we think they are high, or at least 'we' in the sense of brokers and investors who trade on the commodity market. If someone says that the bottom will drop out of the oil market causing a major run to sell of, $1 a gallon gas is around the corner. If someone panics and says the last drop of oil will be pumped on next thursday, gas will be run up. It all has very little to do with ACTUAL supply and demand. There is enough to go around. Even after Katrina, does anyone recall not being able to get gas? No, and that was with 1/4 of our refining capacity down. The last time we actually had shortages was the 70s and before that WW2. Just my 2 cents.0 -
quote:Originally posted by jonk
Nothing will dissuade me from thinking the following:
Oil is traded on the commodities market. The price of oil is set by what investors THINK it MIGHT be worth tomorrow, or next month, or whatnot. Just like gold, silver, etc. Oil companies do NOT set the prices; OPEC doesn't either. We're their biggest customer and while they manipulate what the investors do by controlling supply, they will sell it to us for what we are willing to pay. What the INVESTORS pay. It's not as if they will sit on it; they WANT to sell it and get greasily rich, be it at $10 or $100 a barrel.
Ergo, the reason that gas prices are high is because we think they are high, or at least 'we' in the sense of brokers and investors who trade on the commodity market. If someone says that the bottom will drop out of the oil market causing a major run to sell of, $1 a gallon gas is around the corner. If someone panics and says the last drop of oil will be pumped on next thursday, gas will be run up. It all has very little to do with ACTUAL supply and demand. There is enough to go around. Even after Katrina, does anyone recall not being able to get gas? No, and that was with 1/4 of our refining capacity down. The last time we actually had shortages was the 70s and before that WW2. Just my 2 cents.
Jonk you'd be suprised how very few people know this. Though I disagree somewhat on the suppy and demand part.
Most think the republicans(Bush) and the oil companies just want to screw us while getting filthy rich. What a shame how clueless most are.0 -
The news said this morning that the rich control the exact same percentage of wealth as just previous to 1929...for the first time since 1929.
Happy landings..!!!0 -
quote:Originally posted by jonk
Oil companies do NOT set the prices; OPEC doesn't either. We're their biggest customer and while they manipulate what the investors do by controlling supply, they will sell it to us for what we are willing to pay.
Jonk,
I read your entire post and it makes sense though I don't quite understand the above. The first sentence says Big Oil doesn't set prices. The next sentence says they manipulate what investors do by controlling supply. Please explain how regulating supply, thus affecting what futures investors do, is not, to a great degree, controlling/setting prices.0 -
Zipper, that link does not work. 0 -
Anyone read the article and if so can you post a working link? 0
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