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#1248704 - 01/22/11 01:23 AM
Re: Oil trading over $91
[Re: VM Smith]
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RedGreen
Senior Member
Registered: 08/07/06
Posts: 8679
Loc: Charlotte
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What is telling to me is that the people who trade crude futures, people with gads of money actually dictate what people with little money have to pay for gasoline. The high rollers couldn't care less if gas hits 5 bucks a gallon as long as they're banking cash on trading. It sometimes make a State run, as in Communist type system of State control of oil actually look attractive.
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#1248794 - 01/22/11 01:27 PM
Re: Oil trading over $91
[Re: RedGreen]
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VM Smith
Diamond Member
Registered: 11/28/05
Posts: 34285
Loc: Reality
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What is telling to me is that the people who trade crude futures, people with gads of money actually dictate what people with little money have to pay for gasoline. The high rollers couldn't care less if gas hits 5 bucks a gallon as long as they're banking cash on trading. It sometimes make a State run, as in Communist type system of State control of oil actually look attractive.
The tripling of the population, and the peaking and decline of oil production, along with the development of the formerly backward countries, and resulting increased oil use, have a little bit to do with it.
World oil discoveries have been less than production since 1980, and world oil production per capita has declined since 1979, in the face of increasing per capita usage.
Another factor is that, while has traditionally been traded on a world market, with all production being sold in that open market, with price being set by how much traders (some call them speculators) are willing to pay, that's recently changed. Lately, China has been locking up long term bilateral contracts directly with producers, thus taking that production off the world market.
And many forget that if the USD declines by say, 50%, the price of oil will double, expressed in USD, as long as oil is traded for dollars, which won't be long, because fewer and fewer people want dollars. Things will get a lot worse, and speculation has little to do with it. Speculation does have an effect on price, but only in the short term; in the long term, it's determined by market fundamentals.
"Origin of SPECULATE
Latin speculatus, past participle of speculari to spy out, examine, from specula lookout post, from specere to look, look at — more at spy
First Known Use: 1599"
I've also seen it translated as "to see from afar", and my point is that speculators shouldn't be blamed simply because they have the wit to see what's happening and seek to profit from it, because they don't cause the problem; they just react to events which many don't have a clue about. Traders are necessary to make any market work efficiently; it's called price discovery.
_________________________
The evils of tyranny are rarely seen but by him who resists it.
John Hay (1872)
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#1257018 - 02/25/11 04:19 PM
Re: Oil trading near $100
[Re: bluezone]
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grinch
Senior Member
Registered: 08/28/01
Posts: 4518
Loc: New York State
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Here is an interesting article. Note that proven reserves of oil locked in shale and sand is second to the reserves of Saudi Arabia. The cost of extraction and refining is expensive, but have dropped from around $95 a barrel down to $60 -75 indicating if intensive efforts were made to extract this oil the price should drop further making it more afforable.
We continue to cow tow to the Saudi's and Middle East rather than spend the money here in the USA and Canada.
http://money.cnn.com/2011/02/25/markets/100_dollar_oil/index.htm?hpt=T2
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#1258680 - 03/06/11 01:38 AM
Re: Oil trading near $104.42
[Re: bluezone]
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RedGreen
Senior Member
Registered: 08/07/06
Posts: 8679
Loc: Charlotte
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Have snipers take out Gadhafi, problem solved. Current course gasoline is going to be $5 a gallon by July. Of course people could do what they should already know what they need to do and that is to reduce dependence on foreign oil, but that will never happen.
My $1 bus rides look better every day.
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#1259441 - 03/09/11 09:10 AM
Re: Oil trading near $104.42
[Re: RedGreen]
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tomwaits
Member
Registered: 09/07/08
Posts: 360
Loc: BetweenMud&FlintCreek
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Brent crude closed at $116 per barrel yesterday.
THERE ARE NO GOOD OUTCOMES
http://www.theburningplatform.com/?p=12268
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