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(Reuters)   Passenger airplane gets shot down? QUICK, RAISE THE PRICE OF OIL   (in.reuters.com) divider line 13
    More: Asinine, Gaza, Eastern Ukraine, Rosneft, ANZ, airliners, crude oil  
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795 clicks; posted to Business » on 18 Jul 2014 at 1:02 PM (45 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



13 Comments   (+0 »)
   
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2014-07-18 12:12:57 PM  
Brent crude oil climbed to around $108 a barrel on Friday, extending sharp gains on heightened geopolitical risk after the downing of a Malaysian jetliner over eastern Ukraine and as Israeli ground troops advanced into Gaza as well as a man in Brazil coughing forcing a total closedown of Madagascar ports
 
2014-07-18 01:07:29 PM  
Trade sanctions against Russia, how do they work, Smits?
 
2014-07-18 01:18:53 PM  
and this is why oil should have never become a publicly traded commodity.
 
2014-07-18 01:38:45 PM  

StrikitRich: Trade sanctions against Russia, how do they work, Smits?


Before sanctions: USA buys oil from Russia, country B buys oil from country C.

After sanctions: USA buys oil from country C, country B buys oil from Russia.  Total supply and total demand remain unchanged.
 
2014-07-18 02:24:44 PM  
I guess this is better than the usual:

Oil prices rise on news that fark you, that's why.
 
2014-07-18 02:33:41 PM  

Grand_Moff_Joseph: and this is why oil should have never become a publicly traded commodity.


Ah, a radical idea.  I once thought some kind of gatekeeper was needed on the commodity market as well.

The problem is that speculators is the side effect of eliminating the worse problem of monopolies in energy production.  In order to provide access for all who need, you essentially have to provide access for all.  So the trading level of oil bumps up for a few days on near term contracts because speculators get all excited and buy.  Those who really need the oil and have forecastable demand for the commodity have already "locked in" their delivery contracts.  Only those who live and die on the short term spot market get affected by this, or those with unexpected incremental demands.  So speculators send some money to some oil consumers who can delay their demand.  And later this month, just before contract delivery, those same speculators will dump their contracts.  I mean who wants a few railroad cars of showing up at the penthouse - they have no place to store the stuff.  And storage costs money - so we better dump this stuff.  Those sellers (ie those who fullfilled those purchases of contracts by the speculators) will now be able to pick up the commodity for less, making a nice tidy profit.  The speculators are only there to try and sucker the next speculator.  The big winners however are those that are in the commodity for the long term.

Paraphrasing a very successful investor:  The market exists to transfer money from the impatient to the patient.
 
2014-07-18 03:31:53 PM  

Grand_Moff_Joseph: and this is why oil should have never become a publicly traded commodity.


????????
 
2014-07-18 03:51:13 PM  

kevinatilusa: StrikitRich: Trade sanctions against Russia, how do they work, Smits?

Before sanctions: USA buys oil from Russia, country B buys oil from country C.

After sanctions: USA buys oil from country C, country B buys oil from Russia.  Total supply and total demand remain unchanged.


Uh, try and embargo from Europe, not the USA.
 
2014-07-18 04:14:12 PM  

DanZero: Brent crude oil climbed to around $108 a barrel on Friday, extending sharp gains on heightened geopolitical risk after the downing of a Malaysian jetliner over eastern Ukraine and as Israeli ground troops advanced into Gaza as well as a man in Brazil coughing forcing a total closedown of Madagascar ports


You beat me to it DanZero. I was going to say a butterfly sneezes in the amazon, that should raise the price.
 
2014-07-18 04:21:40 PM  

Debeo Summa Credo: Grand_Moff_Joseph: and this is why oil should have never become a publicly traded commodity.

????????


I double checked, and other than a missing capital letter, my post looks grammatically correct.  What seems to be the trouble?
 
2014-07-18 06:58:08 PM  
All of the airways going in and out of Ukraine have been closed, save for flights to/from Kiev.  So naturally, tomorrow they'll raise the price of gas because an aircraft  wasn't shot down over Ukraine.
 
2014-07-18 07:43:57 PM  
Initial spike upward on the initial news comes out and risk seems higher, followed by a drop as the facts become clearer. Are people under the impression that prices shouldn't change no matter what externalities come into play? If your neighborhood was suddenly found to be sitting on top of the richest deposit of gold ore ever discovered, would you consider it a conspiracy when property prices went to the sky?
 
2014-07-18 09:56:45 PM  

Grand_Moff_Joseph: Debeo Summa Credo: Grand_Moff_Joseph: and this is why oil should have never become a publicly traded commodity.

????????

I double checked, and other than a missing capital letter, my post looks grammatically correct.  What seems to be the trouble?


Why would you not want oil to be traded? You want producers and users to be completely unable to hedge their risk and lock in prices and just take their chances on price swings?
 
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