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(BusinessWeek)   Commodity speculators are having a hard time keeping gasoline over $4 a gallon   (businessweek.com) divider line 31
    More: Spiffy, West Texas Intermediate, futures exchanges, berg Businessweek, futures contracts, cushing, long exposures, driverless cars, gasoline  
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2688 clicks; posted to Business » on 11 Apr 2012 at 8:54 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-04-11 08:56:08 AM  
Why Gasoline Isn't $4 Per Gallon Nationally

Because it looks like Israel isn't going to bomb Iran after all.
 
2012-04-11 09:17:44 AM  
Why Gasoline Isn't $4 Per Gallon Nationally

Because some places, it's $5 per gallon.
 
2012-04-11 09:25:01 AM  
Because our economy isn't going to recover when gas is $4 / gallon, the investors see the economy slowing and decide to bail out of the oil and gasoline futures.

Don't worry -- they'll drive the prices up again soon enough when the economy starts to show signs of recovery.
 
2012-04-11 09:29:30 AM  
FTFA..... "After weeks of consecutive increases, the average price of a gallon of gas in the U.S. fell more than a penny this week."



Now, who says the penny is obsolete?
 
2012-04-11 09:31:10 AM  
Only 7 months left, boys. We can do this!

www.ldjackson.net
 
2012-04-11 09:33:31 AM  

Wendy's Chili: Only 7 months left, boys. We can do this!

[www.ldjackson.net image 500x381]


Take back America? Who has it?
 
2012-04-11 09:45:45 AM  

ManateeGag: Wendy's Chili: Only 7 months left, boys. We can do this!

[www.ldjackson.net image 500x381]

Take back America? Who has it?


The Non-W.A.S.P.'s
 
2012-04-11 09:48:27 AM  

ManateeGag: Wendy's Chili: Only 7 months left, boys. We can do this!

[www.ldjackson.net image 500x381]

Take back America? Who has it?

BAD

PEOPLE! REEEEEALLLY BAD PEOPLE!
 
2012-04-11 10:16:29 AM  

Pants full of macaroni!!: ManateeGag: Wendy's Chili: Only 7 months left, boys. We can do this!

[www.ldjackson.net image 500x381]

Take back America? Who has it?

BAD PEOPLE! REEEEEALLLY BAD PEOPLE!


You sure you don't mean Blah People?
 
2012-04-11 10:16:35 AM  
> Rex Tillerson, CEO, Exxon/Mobil: *Oil speculators add $40 per barrel*
> Dr. Mark Cooper, Consumer Federation of America: *Oil speculation added $600 to the average family's gasoline bill in 2011*
> Commodity Futures Trading Commission (CFTC) Chairman, Gary Gensler: *Huge inflows of speculative money create a self-fulfilling prophecy that drives up commodity prices*
> Goldman Sachs analyst, David Greely: *Speculation is driving up oil prices*
> Saudi Oil Minister Al Naimi, Houston Oil Forum, November 1999: *All inclusive" Saudi production costs veer toward "$1.50/bbl*
 
2012-04-11 10:30:32 AM  
If it's only 'speculators' driving up the cost of oil, then the cost of oil will eventually crash.
 
2012-04-11 10:32:46 AM  
It's because the stock market tanked after the March jobs report came out.

You can only hyper-inflate a commodity while the stock market is healthy. Once it dips, the actual rules of supply-and-demand take over the fear-mongering and false news leaks that help drive prices up.
 
2012-04-11 10:42:11 AM  
Please help.


/Speculator
 
2012-04-11 10:47:04 AM  
FTA: The U.S. is now producing more than 6 million barrels a day, the most in 12 years.

Wait, what? I thought B. Hussein Obummer went and personally shut off the valves at every single domestic oil well so he could drive up the price of crude and fund Muslim terrorists in the middle east!? This isn't fitting my narrative! Help me, Fox News!!!
 
2012-04-11 11:09:03 AM  

StubePT: It's because the stock market tanked after the March jobs report came out.


Where the hell is Beeks!?
 
2012-04-11 11:53:14 AM  
The U.S. is now producing more than 6 million barrels a day, the most in 12 years. But with demand at its lowest level since the mid-1990s-and overloaded pipeline infrastructure unable to move it to refineries quickly-supplies are building faster than they have in decades.

Damn President Fart and his energy hating ways.
 
2012-04-11 11:59:13 AM  

HotWingConspiracy: The U.S. is now producing more than 6 million barrels a day, the most in 12 years. But with demand at its lowest level since the mid-1990s-and overloaded pipeline infrastructure unable to move it to refineries quickly-supplies are building faster than they have in decades.

Damn President Fart and his energy hating ways.


Well, he IS blocking the Keystone pipeline, which would create a trillion permanent, high-paying jobs and cause gas prices to drop to -$4.50. Yep, that's right, they would actually pay you to take the gas because there would be so much. Too bad the dims will never let it happen.
 
2012-04-11 12:33:52 PM  

Arkanaut: Why Gasoline Isn't $4 Per Gallon Nationally

Because it looks like Israel isn't going to bomb Iran after all.


Gas was around $2.85/gallon here when all that shiat started to hit the fan......so remove that "what if, coulda" and we will be right back to that point....right? RIGHT?
 
2012-04-11 12:58:24 PM  

MrBigglesworth: Arkanaut: Why Gasoline Isn't $4 Per Gallon Nationally

Because it looks like Israel isn't going to bomb Iran after all.


Gas was around $2.85/gallon here when all that shiat started to hit the fan......so remove that "what if, coulda" and we will be right back to that point....right? RIGHT?


If that's true1, and the perception of the risk of a military conflict in the Gulf were indeed back to what it was before2, it would be back to the original price, assuming nothing else in the world has changed3.

1 I haven't seen gas below $3.00 since at least a year ago, but I'm just looking at my local gas stations
2 Meaning, not just reduced from 50% chance of conflict to 40%, but down to 10% (or whatever it really is -- is there an Intrade market for "shooting war in the Gulf"?)
3 Mainly I mean the increased demand for oil from the BRIC countries (and the "CIVETS" too) that are 1) getting wealthier and 2) growing in population. There are also supply effects from increased drilling. Overall though, these factors shouldn't have changed much over the last 3-4 months that this crisis has gone on for.
 
2012-04-11 02:18:49 PM  

Arkanaut: is there an Intrade market for "shooting war in the Gulf"?


Here you go (new window)
 
2012-04-11 02:19:37 PM  

biglot: > Rex Tillerson, CEO, Exxon/Mobil: *Oil speculators add $40 per barrel*
> Dr. Mark Cooper, Consumer Federation of America: *Oil speculation added $600 to the average family's gasoline bill in 2011*
> Commodity Futures Trading Commission (CFTC) Chairman, Gary Gensler: *Huge inflows of speculative money create a self-fulfilling prophecy that drives up commodity prices*
> Goldman Sachs analyst, David Greely: *Speculation is driving up oil prices*
> Saudi Oil Minister Al Naimi, Houston Oil Forum, November 1999: *All inclusive" Saudi production costs veer toward "$1.50/bbl*


Paul Krugman, noted right wing idealogue: "People who blame speculators for price spikes, absent physical hoarding, are wrong"


Link (new window)
Link (new window)
 
2012-04-11 02:33:44 PM  

Donnchadha: StubePT: It's because the stock market tanked after the March jobs report came out.

Where the hell is Beeks!?


+$1
 
2012-04-11 02:44:19 PM  

HelloMyNameIs: Arkanaut: is there an Intrade market for "shooting war in the Gulf"?

Here you go (new window)


Cool. So it looks like the price over the last few weeks is fluctuating wildly between 20 and 30, which would still make it about 33% to 100% higher than what it was back in mid-December when gas prices hit their 12-month low*.

* Which, by the way, was $3.22, not $2.85 as MrBigglesworth suggested.
** Source (new window, sorry you're going to have to adjust the time period yourself.)
 
2012-04-11 03:17:30 PM  

Arkanaut: HelloMyNameIs: Arkanaut: is there an Intrade market for "shooting war in the Gulf"?

Here you go (new window)

Cool. So it looks like the price over the last few weeks is fluctuating wildly between 20 and 30, which would still make it about 33% to 100% higher than what it was back in mid-December when gas prices hit their 12-month low*.

* Which, by the way, was $3.22, not $2.85 as MrBigglesworth suggested.
** Source (new window, sorry you're going to have to adjust the time period yourself.)


Total volume on that market: 1037 shares, vs 193,000 for the Obama election market. Market ennui should be factored in price as well.
 
2012-04-11 05:56:35 PM  
A talk with my brother this weekend brought up something I would like confirmed or denied.
When guy Abby buys a contract for oil ( or any other commodity ) due in six months he puts down $14,000 for a $6 mil value contract. When Abby sells it five months later, it goes back to the pool. In other words guy Bob did not have to buy it and accept delivery one month later.
Is this true? If delivery were required on all contracts, what would happen to the market?
The conversation started with the relative value of gold and silver that had been in lock step at a 30:1 ratio for decades, but deviated. The cause of the deviation was the reserve went from $7000 to $14000 to control 200,000 OZ of silver.
 
2012-04-11 07:41:03 PM  

Bad Dad Why: A talk with my brother this weekend brought up something I would like confirmed or denied.
When guy Abby buys a contract for oil ( or any other commodity ) due in six months he puts down $14,000 for a $6 mil value contract. When Abby sells it five months later, it goes back to the pool. In other words guy Bob did not have to buy it and accept delivery one month later.
Is this true? If delivery were required on all contracts, what would happen to the market?
The conversation started with the relative value of gold and silver that had been in lock step at a 30:1 ratio for decades, but deviated. The cause of the deviation was the reserve went from $7000 to $14000 to control 200,000 OZ of silver.


Don't mix buying the option to buy the contract with actually buying the contract.
 
2012-04-11 07:58:21 PM  

Arkanaut: HelloMyNameIs: Arkanaut: is there an Intrade market for "shooting war in the Gulf"?

Here you go (new window)

Cool. So it looks like the price over the last few weeks is fluctuating wildly between 20 and 30, which would still make it about 33% to 100% higher than what it was back in mid-December when gas prices hit their 12-month low*.

* Which, by the way, was $3.22, not $2.85 as MrBigglesworth suggested.
** Source (new window, sorry you're going to have to adjust the time period yourself.)


Where I live, in OKC, gas prices got as low as $2.85 for me personally, gasbuddy.com reported 2.82 as the lowest recorded price within the last 3 months.
 
2012-04-11 09:44:53 PM  

mod3072: FTA: The U.S. is now producing more than 6 million barrels a day, the most in 12 years.

Wait, what? I thought B. Hussein Obummer went and personally shut off the valves at every single domestic oil well so he could drive up the price of crude and fund Muslim terrorists in the middle east!? This isn't fitting my narrative! Help me, Fox News!!!


It's happening despite president Black Hussain Osama's best efforts, all credit to the Job Creators.
 
2012-04-12 07:43:52 AM  

Bad Dad Why: A talk with my brother this weekend brought up something I would like confirmed or denied.
When guy Abby buys a contract for oil ( or any other commodity ) due in six months he puts down $14,000 for a $6 mil value contract. When Abby sells it five months later, it goes back to the pool. In other words guy Bob did not have to buy it and accept delivery one month later.
Is this true? If delivery were required on all contracts, what would happen to the market?
The conversation started with the relative value of gold and silver that had been in lock step at a 30:1 ratio for decades, but deviated. The cause of the deviation was the reserve went from $7000 to $14000 to control 200,000 OZ of silver.


There's a difference between gold and silver and oil contracts that have a certains expiry date. Speculators can't store physical oil (unless they rent a tanker) do they have to sell prior to futures contract expiration. Gold and silver, though used for industrial applications in some instances, can also be stored in a vault for decades. So I think you can hold gold or silver that is in a vault somewhere and notionally assigned to you.

If oil was required to be delivered, then the original contract wouldn't have gone through, nor would the reversal/sale of the contract prior to delivery. Net impact on demand/supply would be zero.
 
2012-04-12 09:01:32 AM  

MugzyBrown: If it's only 'speculators' driving up the cost of oil, then the cost of oil will eventually crash.


Which is exactly what happened in 2008, if you recall.

dl.dropbox.com
 
2012-04-12 12:00:57 PM  

Lord Jubjub: Bad Dad Why: A talk with my brother this weekend brought up something I would like confirmed or denied.
When guy Abby buys a contract for oil ( or any other commodity ) due in six months he puts down $14,000 for a $6 mil value contract. When Abby sells it five months later, it goes back to the pool. In other words guy Bob did not have to buy it and accept delivery one month later.
Is this true? If delivery were required on all contracts, what would happen to the market?
The conversation started with the relative value of gold and silver that had been in lock step at a 30:1 ratio for decades, but deviated. The cause of the deviation was the reserve went from $7000 to $14000 to control 200,000 OZ of silver.

Don't mix buying the option to buy the contract with actually buying the contract.


Yeah, like this guy did. (new window)

(Yes, Senator Vreenak, I know it's a faaaaake)
 
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