Stupid Oil Speculator's are at it again!

[Gary Allan]

Not in the context of what he was saying. More simply stated, out of necessity, when other commodities increase in price, there's an increase in demand to support it or decreased supply. No such demand is required for petroleum. Demand may NOT be increased when the price goes up.

 

[ZZman]

Originally Posted By: Tempest
It was a $100 a barrel just a few months ago... Why do you now believe it should be $75?

So if the oil should be fixed for a year, there is no reason to make more gas when demand goes up in the summer months. This will lead to shortages in the summer, and over supply in the winter.

You see, price is an indicator to producers as to how much to produce.

If your plan will work for oil, why not just use the same price fixing for all products?


Because even OPEC thinks $ 75.00 dollars is reasonable. Is $ 40.00 reasonable to producers? NO. Lets just make it fair for both producers and consumers and set a reasonable price.

Sure there is a reason to produce more. They can't sell what they don't produce. Whether it is 75.00 or 100 dollars a barrel we still need fuel and the companies need money. If you are getting the same amount for what you pump or make it makes no difference if you have too much or too little. (With too little not being a real concern.) Do you think they like making fuel when it is $ 40.00 a barrel? But they do.

Demand should be the indicator of how much to produce, not price.

Just because demand goes up doesn't mean price has to. Greed might say yes. Or does it to the investors?

I am not worried about other commodities like I am oil. Oil is strategic. It affects the whole world and economies. This makes sense for some commodities as it might determine what they might want to plant or there could be a true shortage if a crop is destroyed. However I can choose to not buy these commodities if they get too far out of whack. (However I would still disagree with it if these were being bought as a hedge against inflation/the dollar going down etc...instead of because of true demand issues.)

 

[Gary Allan]

Yes, ZZman, but with oil the term "production" is a misnomer. It' really collection. Not one drop of oil was produced as in created.

Now you surely would want a floating energy supply with a stable price for the rest of the globe to wrap around in their own competitive manner, but ..as I think I went into a bit, there's not any way to do that with a product/commodity that has infinite demand based on price.

 

[Steve S]

Who will really know the truth ? It is the stupid consumer!!!

 

[Kaboomba]

...who is afraid of drilling and production of domestic petro products even though the increased supply, supported by some of the largest reserves ever known, would instantly cut the price at the pump by 50%.

 

[Tempest]

Quote:
Demand should be the indicator of how much to produce, not price.

Just because demand goes up doesn't mean price has to. Greed might say yes. Or does it to the investors?

So your boss should demand more work from you and pay you less, and you will be just fine with that?

After all, demand (for your labor) doesn't mean price (your wages) should go up, right?

 

[mechanicx]

Originally Posted By: Tempest
Quote:
Demand should be the indicator of how much to produce, not price.

Just because demand goes up doesn't mean price has to. Greed might say yes. Or does it to the investors?

So your boss should demand more work from you and pay you less, and you will be just fine with that?

After all, demand (for your labor) doesn't mean price (your wages) should go up, right?


Isn't that what every boss does to hourly workers anyway lol. Demand more work out put with no increase in pay. I think what ZZman meant was if supply and demand was at work prices would stay stable because if prices increased supply would increase and demand would decrease to drive prices back down. Just like supply and demand had kept oil prices fairly stable for decades until Wall St got more involved.

As the article mentioned because of speculators demand and supply is not working. Demand is low and supply is high but prices keep rising. I'd like to have a job where I can increase my pay without increasing my demand or work output lol.

 

[ZZman]

Originally Posted By: Tempest
Quote:
Demand should be the indicator of how much to produce, not price.

Just because demand goes up doesn't mean price has to. Greed might say yes. Or does it to the investors?

So your boss should demand more work from you and pay you less, and you will be just fine with that?

After all, demand (for your labor) doesn't mean price (your wages) should go up, right?


Since most people don't have sales or commission type jobs that is what can happen. Sometimes you will work harder for the pay you are receiving and sometimes less. But most people's pay stays stable. That is how most people like things to stay...stable...predictable.

 

[MarkC]

Originally Posted By: Kaboomba
...who is afraid of drilling and production of domestic petro products even though the increased supply, supported by some of the largest reserves ever known, would instantly cut the price at the pump by 50%.


That, my friend, is a load of hockey. And not the NHL kind.

 

[PandaBear]

Originally Posted By: Tempest
Quote:
there will be increased demand when the prices goes up

I think you got that backward.


typo, I mean that will be increased supply when price goes up.

 

[Shannow]

Whole supply/demand, market will find alternatives argument amazes me when we are talking a finite energy resource, with the best analogy that I can come up with is a genie in a bottle able to do "stuff" for us.

There are no alternate genies when we use this one up, that are actually stored energy, everything else is a conversion of some form of solar energy or another.

Unless the market works out how to burn granite or basalt or some other low energy state form of matter.

'till that point, finite fossil fuels are somewhat unique.

 

[ZZman]

The market extended losses on Tuesday as the International Energy Agency warned about potential risks to the economic recovery posed by high energy costs.

**They said it should stay under $ 80.00. Maybe we should help the whole world recover instead of a few investors and oil companies.

 

[Gary Allan]

Great. Just keep us functional enough to pay the speculators. Nice work if you can get it.

 

[Steve S]

Originally Posted By: MarkC
Originally Posted By: Kaboomba
...who is afraid of drilling and production of domestic petro products even though the increased supply, supported by some of the largest reserves ever known, would instantly cut the price at the pump by 50%.


That, my friend, is a load of hockey. And not the NHL kind.
Exactly , there is no problem selling gas at the current prices .

 

[MarkC]

Not to mention the fact that if these "largest reserves ever known" existed in the first place and were economically viable to exploit, it would still be years before the first drop would flow, so why would the pump price suddenly go down?

 

[Texas Aggie]

What's a reasonable price? Price is set by demand. If you have power to artificially set the price, you can adjust the demand at any point you want. Demand is infinite for a free product. Also, if the price was set below the world market price, how would the US purchase enough to meet demand? In other words, assuming the market price was $80, and the US fixed the price at $75, the world won't be selling us enough oil to meet our demand, unless the government subsidizes the purchase, which will make the problem worse.

Unfortunately, with oil, it's difficult to reduce our use overnight. If you've got a suburban, you can't just go sell it if the price of gas goes up a buck. Even if you do, it will still be used by someone else to get around in. It takes years for the average fuel economy of vehicles to increase. Just like it takes years for new capacity to come on. The market should decide prices, because energy's too important to let the government handle it.

 

[ZZman]

A reasonable price is what producers and buyers agree on. This should be on a world wide scale. The price is $ 80.00 a barrel for anyone who wants oil. This is fair for Producers as they have steady income. It is fair for buyers because they are protected from possible high prices and they get stability.

The price is already artifically priced. Any little bit of news changes the price whether it actually ends up affecting oil supply or demand in reality is another matter. Many investors buy oil to offset the dollar. How is that price based on true demand for oil for productive use and not for financial game playing?

When oil was 147.00 a barrel that was not artifically priced? That had nothing to do with demand and everything to do with games and greed.

**Explain to me why prices need to go up if demand goes up when there are no shortages?

 

[Panzerman]

Originally Posted By: MarkC
Not to mention the fact that if these "largest reserves ever known" existed in the first place and were economically viable to exploit, it would still be years before the first drop would flow, so why would the pump price suddenly go down?
Because there would "suddenly" be competition coming. If you havent nocticed they dont have much of anything else that anyone is interested in, in the Middle East. I dont think there would be a run on sand.

 

[Texas Aggie]

Originally Posted By: ZZman
A reasonable price is what producers and buyers agree on. This should be on a world wide scale. The price is $ 80.00 a barrel for anyone who wants oil. This is fair for Producers as they have steady income. It is fair for buyers because they are protected from possible high prices and they get stability.

The price is already artifically priced. Any little bit of news changes the price whether it actually ends up affecting oil supply or demand in reality is another matter. Many investors buy oil to offset the dollar. How is that price based on true demand for oil for productive use and not for financial game playing?


The dollar has a huge effect on the price of oil. Our dollar has been decreasing in value for years due to increased government spending and printing too much money. You've also got to remember that oil demand is global, with China, India, and many other countries quickly advancing and using much more oil.

Originally Posted By: ZZman
When oil was 147.00 a barrel that was not artifically priced? That had nothing to do with demand and everything to do with games and greed.


Again, oil was high due to worldwide demand and too many dollars being created. We're witnessing the same thing, albeit on a grander scale, occur now. The government needs to work towards a stronger dollar, and much less regulation.

Originally Posted By: ZZman
**Explain to me why prices need to go up if demand goes up when there are no shortages?


If the price does not follow demand, then shortages will surely occur. It's simply economics 101. Also, in the short term, prices can fluctuate wildly, while they'll stabilize in the long term.

I can't understand how 'speculators' get such a bad rap on this board. We all speculate everyday when we buy groceries, gas, stocks in our 401k, etc. What we've witnessed is simply government gone wild that's going to bankrupt us if we're not careful. Maybe it already has.

 

[MarkC]

Originally Posted By: Panzerman
Originally Posted By: MarkC
Not to mention the fact that if these "largest reserves ever known" existed in the first place and were economically viable to exploit, it would still be years before the first drop would flow, so why would the pump price suddenly go down?
Because there would "suddenly" be competition coming. If you havent nocticed they dont have much of anything else that anyone is interested in, in the Middle East. I dont think there would be a run on sand.


You really should become better informed if you want to talk about this stuff.
The majority of the oil we use doesn't even come from the Middle East, and what we could reasonably hope to get out of own own supposedly "vast" reserves doesn't scare anybody. IF the offshore reserves are as large as is speculated, and drilling started right now, prices wouldn't begin to be affected until about 2030, if then.
By the way, what about these large reserves? Where exactly are they and how much oil do you think is there...oil that can be gotten out at a reasonable cost?

http://www.eia.doe.gov/pub/oil_gas/petro...ent/import.html