Stupid Oil Speculator's are at it again!

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Texas Aggie:

So if I am a kid and I want to be an oil speculator later in life I should learn early in life how that works by running my lemonade stand that way.

I start the price at 50 cents a glass. As the day gets hot and more customers show up I raise my price to 75 cents. Why? Because demand went up.......I must raise prices!

My costs didn't change....I just want more profit.

If a price was set and agreed upon it doesn't matter what the dollar does. The price is the price and that was what was agreed upon. You took that chance when you made that deal that one side or the other might come out better.

Who cares if there was or is high demand for oil. The point is are or was there any shortages. Is there a bidding war over that last bit of available oil?.....NO. Everyone could get oil. There were no shortages. The 147.00 a barrel was finanicallly produced not demand/supply produced. The only shortages that might occur would be artifically created by companies holding back hoping to get prices up. But if the price was already set and agreed to there would be no reason to hold back.

Please explain to me Economics 101. Why will there be shortages if price does not go up? If they can sell all they want at the current price and are making a profit why do they have to make even more at the expense of people held hostage by having to buy it.
 
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zzman -- you ask "why will there be shortages if price does not go up ?"the oil co.'s would like to keep stored supply low as a tool to help keep prices high.if they deem that prices are "too" low, they often decrease exploration/drilling activities. this has been happening for nat. gas, as well.these practices have been going on for a few years -- it's no secret. when stored supply drops to "x" point, it puts pressure on prices to increase.now, it's feasible for the co.'s to think about exploration/drilling, because prices are rising.
"...why do they have to make even more...".because they can. they're business men, and don't care about anything but money. i don't understand why this this basic principle eludes so many people.
the politicians are bought -- sorry-- given campaign contributions by the big oil co.'s, and that is why the govn't does not deal with this issue.they're reluctant to bite the hand that feeds them.
your posts make sense in a utopian world, but we don't live in a utopian world.what should be, and reality, are usually two different things. people have to see reality at some point in time, like it or not.that's just the world in which we live.
as far as the thread title -- "stupid oil speculators ..." makes me laugh. they're many things -- but hardly stupid.
thus endeth the lession. have a good night.
 
I understand the artifical supply issue. But if a price was agreed upon that would be fair to both sides why would they limit supply?

If the price was set at $ 80.00. Then we don't have to worry about it going to $ 100.00. They don't have to worry about if going to $ 60.00. It is a win-win.
 
zzman -- no disrespect,but you don't understand the supply issue. if you did, then you would not ask "why would they limit supply?". for these people, there is NEVER enough money.NEVER.please read my post again.i don't know how to explain it in a more simple fashion.have a good night.
 
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Originally Posted By: ZZman


So if I am a kid and I want to be an oil speculator later in life I should learn early in life how that works by running my lemonade stand that way.

I start the price at 50 cents a glass. As the day gets hot and more customers show up I raise my price to 75 cents. Why? Because demand went up.......I must raise prices!

My costs didn't change....I just want more profit.



Yes, while it may not seem fair, this is how the world works. If people are willing to pay 75 cents for lemonade, sellers will charge 75 cents for lemonade (and make more profit than they could if they sold it at 50 cents).

If you had a job that paid $10 an hour, but quit it when offered another job that paid $15 an hour, have you wronged your old employer by taking the higher paying new job?
 
If new oil suppliers came up, such as drilling off the coast and cut oil prices from Canada and the middle east, by savings of refining/cleaning the oil sands and shipping, yet still making the same profit, wouldnt it start a price war. I understand the problems are that the same people have the oil rights that are dealing with the current supplies, so fat chance of that happening. Still drilling off the coasts and harvesting oil in the United States would still lead to jobs and revenue, that would not go to exporting. I do not believe for a second it would take 20 years to get oil flowing. Iam betting they could have oil within a year. That seems to be the argument that it would not help now, so what do they do wait and then have to wait. I think they need to harvest the oil, I can see no downside for our economy.
 
Originally Posted By: PandaBear
Originally Posted By: ZZman
Where is the true issues that should be forcing oil up? There aren't any.


China and India consumption.


And the US, too...

U.S. Demand For Gasoline Sets All-time Record For March

"The numbers for March show that we are more thirsty for the stuff than ever. According to the American Petroleum Institute (API), our refineries produced more than 9.3 million barrels of gas per day in March, more than any other single month in U.S. history."


I guess we can forget all the news that said our consumption was down.
 
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Who says that's how much we're using? It says how much we produced, not how much we used. For all that says, we could be putting that gas into storage, or onto tankers for export to Asia, South America, or Europe.
 
Originally Posted By: sciphi
Who says that's how much we're using? It says how much we produced, not how much we used. For all that says, we could be putting that gas into storage, or onto tankers for export to Asia, South America, or Europe.


Well, here is the API news release: http://www.api.org/Newsroom/us-gasoline-record.cfm

When the API says 'U.S. gasoline demand', it sounds like the gas is for the U.S. only.

As for putting gas in storage, I guess there could be a 'demand' to do that.
21.gif
 
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Odd thing about that API news release is the fact that year over year oil imports are down 1%, but domestic oil production has increased 1% in the same time period.

Maybe that "easy" imported oil is petering out sooner than expected.
 
The USA oil will be sold on the world market for what the market will pay. The wells will be capped if the cost or profit wanted drops below the cost of the oil.
 
Saying that there was so much produced does not imply it was all consumed. Look at the oversupplies in history. There was a lot of production, and not all of it was used.

Please correct me if I'm wrong. The number of miles driven has fallen this spring compared to last spring. Based on this, where is all that gasoline going?

Of course, if I'm incorrect, then my argument is for naught.
 
Originally Posted By: LTVibe


"The numbers for March show that we are more thirsty for the stuff than ever. According to the American Petroleum Institute (API), our refineries produced more than 9.3 million barrels of gas per day in March, more than any other single month in U.S. history."


I guess we can forget all the news that said our consumption was down.




I find that interesting with the economy down and more fuel efficient vehicles on the road that it is up.
 
Originally Posted By: Panzerman
If new oil suppliers came up, such as drilling off the coast and cut oil prices from Canada and the middle east, by savings of refining/cleaning the oil sands and shipping, yet still making the same profit, wouldnt it start a price war. I understand the problems are that the same people have the oil rights that are dealing with the current supplies, so fat chance of that happening. Still drilling off the coasts and harvesting oil in the United States would still lead to jobs and revenue, that would not go to exporting. I do not believe for a second it would take 20 years to get oil flowing. Iam betting they could have oil within a year. That seems to be the argument that it would not help now, so what do they do wait and then have to wait. I think they need to harvest the oil, I can see no downside for our economy.


So many errors in your understanding. Oil from shale and "sands" as you say is not cheaper, but more expensive and difficult that getting it out of the ground, and uses massive amounts of water and generates a good deal of waste that is ...nasty.

Oil companies already have access to some 34 billion barrels of offshore oil that they haven't even tried to develop yet. Why?


You think oil would flow within a year? From where?
Once you get a lease, it's easily 5 to 10 years before EXPLORATORY drilling even starts. Do you think drilling equipment and people qualified to operate it are sitting on a shelf somewhere? From exploratory drilling to commercial recovery is easily 5 more years IF you don't drill a dry hole...which is a distinct possibility and given how expensive offshore drilling is, can put a severe damper on further drilling. It's not as if you can just go drill a hole anywhere you think, and you get oil.

If drilling began in 2012, you still won't see any "extra" oil until 2020 and if it were to affect worldwide prices, it wouldn't be until about 203, under best case scenarios, which usually don't happen.
Please do a little research. There are actually people who know about oil exploration and recovery and what they say usually has a better chance of being true than when YOU guess.
 
Originally Posted By: ZZman
Texas Aggie:

So if I am a kid and I want to be an oil speculator later in life I should learn early in life how that works by running my lemonade stand that way.

I start the price at 50 cents a glass. As the day gets hot and more customers show up I raise my price to 75 cents. Why? Because demand went up.......I must raise prices!

My costs didn't change....I just want more profit.

If a price was set and agreed upon it doesn't matter what the dollar does. The price is the price and that was what was agreed upon. You took that chance when you made that deal that one side or the other might come out better.

Who cares if there was or is high demand for oil. The point is are or was there any shortages. Is there a bidding war over that last bit of available oil?.....NO. Everyone could get oil. There were no shortages. The 147.00 a barrel was finanicallly produced not demand/supply produced. The only shortages that might occur would be artifically created by companies holding back hoping to get prices up. But if the price was already set and agreed to there would be no reason to hold back.

Please explain to me Economics 101. Why will there be shortages if price does not go up? If they can sell all they want at the current price and are making a profit why do they have to make even more at the expense of people held hostage by having to buy it.


ZZman:

What you're forgetting in your lemonade example is that you only have a finite supply of lemonade. As the temperature increases, you'll have a higher demand. If you keep the price low, you'll sell out before noon, and profits will be down. Raising the price will slow demand, allowing your supply to keep up with your demand. And my question would be, what's wrong with profit? If you're out in the hot sun, making an effort, shouldn't you be rewarded for that effort? If not, why get out of bed in the morning? You could be playing video games with the kid next door.

Also, what you're saying about setting the agreed upon price is incorrect. People agree on the price of oil millions of times per day in the market, you're referring to fixing the price. That was tried in the '70s and didn't work out too well.

The reason that there were no shortages even with high demand is because the price was not fixed. I'm adding a link to a supply and demand explanation on another website that explains it. Simply put, the optimal price will balance supply and demand. The market allows this to happen daily. Look at the graph in the website, and select a price below the market price. You'll see that a shortage will be created. That's econ 101.

http://www.netmba.com/econ/micro/supply-demand/
 
Oil is never a market priced only product. You have politics, military, back door deals going on.

How do we get oil below $80 when the market is $80? Threaten to remove military sponsorship or crack down of radical rebels will do the trick. Same on how to increase oil price: just cause some problem in the ME or a couple nuclear test, the price will go up.

It is never only market, for something so important to the health of nations in the developed world.
 
Originally Posted By: ZZman
Originally Posted By: Steve S
Originally Posted By: ZZman
I thought we were going to curb this garbage!

http://news.yahoo.com/s/mcclatchy/3467023
Who is we?


I thought the government was going to watch this better and put some rules in place.


Won't happen the politicians have been bought and paid for.

To think other wise is .......... well stupid
 
Originally Posted By: Texas Aggie
Originally Posted By: ZZman
Texas Aggie:

So if I am a kid and I want to be an oil speculator later in life I should learn early in life how that works by running my lemonade stand that way.

I start the price at 50 cents a glass. As the day gets hot and more customers show up I raise my price to 75 cents. Why? Because demand went up.......I must raise prices!

My costs didn't change....I just want more profit.

If a price was set and agreed upon it doesn't matter what the dollar does. The price is the price and that was what was agreed upon. You took that chance when you made that deal that one side or the other might come out better.

Who cares if there was or is high demand for oil. The point is are or was there any shortages. Is there a bidding war over that last bit of available oil?.....NO. Everyone could get oil. There were no shortages. The 147.00 a barrel was finanicallly produced not demand/supply produced. The only shortages that might occur would be artifically created by companies holding back hoping to get prices up. But if the price was already set and agreed to there would be no reason to hold back.

Please explain to me Economics 101. Why will there be shortages if price does not go up? If they can sell all they want at the current price and are making a profit why do they have to make even more at the expense of people held hostage by having to buy it.


ZZman:

What you're forgetting in your lemonade example is that you only have a finite supply of lemonade. As the temperature increases, you'll have a higher demand. If you keep the price low, you'll sell out before noon, and profits will be down. Raising the price will slow demand, allowing your supply to keep up with your demand. And my question would be, what's wrong with profit? If you're out in the hot sun, making an effort, shouldn't you be rewarded for that effort? If not, why get out of bed in the morning? You could be playing video games with the kid next door.

Also, what you're saying about setting the agreed upon price is incorrect. People agree on the price of oil millions of times per day in the market, you're referring to fixing the price. That was tried in the '70s and didn't work out too well.

The reason that there were no shortages even with high demand is because the price was not fixed. I'm adding a link to a supply and demand explanation on another website that explains it. Simply put, the optimal price will balance supply and demand. The market allows this to happen daily. Look at the graph in the website, and select a price below the market price. You'll see that a shortage will be created. That's econ 101.

http://www.netmba.com/econ/micro/supply-demand/


Bull

we regulated long distance phone charges and now we can call for a nickel or less

Where have you been ?
What political party do you listen to ?

Wake up .
 
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Originally Posted By: Texas Aggie



ZZman:

What you're forgetting in your lemonade example is that you only have a finite supply of lemonade. As the temperature increases, you'll have a higher demand. If you keep the price low, you'll sell out before noon, and profits will be down. Raising the price will slow demand, allowing your supply to keep up with your demand. And my question would be, what's wrong with profit? If you're out in the hot sun, making an effort, shouldn't you be rewarded for that effort? If not, why get out of bed in the morning? You could be playing video games with the kid next door.

Also, what you're saying about setting the agreed upon price is incorrect. People agree on the price of oil millions of times per day in the market, you're referring to fixing the price. That was tried in the '70s and didn't work out too well.

The reason that there were no shortages even with high demand is because the price was not fixed. I'm adding a link to a supply and demand explanation on another website that explains it. Simply put, the optimal price will balance supply and demand. The market allows this to happen daily. Look at the graph in the website, and select a price below the market price. You'll see that a shortage will be created. That's econ 101.

http://www.netmba.com/econ/micro/supply-demand/


Maybe he has a finite supple and maybe he doesn't. He could always buy more at the store. And why didn't the kid do well if he sold out early and could go home and play video games. wouldn't 25 cents a cup profit be good enough? Now it is not good enough so he has to make 50 cents?

Why is the price of oil agreed upon everyday? How can factors change that much? Why does it change up and down? Almost always when these prices were agreed upon it was on with information that may or may not affect oil in the future or was agreed upon as an investment choice not a supply/demand choice.

If the companies want to make money they pump oil and sell it. If the price was set they would have no reason not too because they could not raise prices by artifically slowing supply. But why would they if they didn't have to worry about the price going down either?

If the price stayed stable demand would probably stay the same or probably even increase. That would make the oil companies happy. More pumped...more proft made.

If oil was based purely on supply and demand and not other factors then I might agree it is working as it should.
 
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