Another stupid question on speculators

Discussion in 'Economy' started by JRK, Apr 19, 2012.

  1. JRK
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    JRK Senior Member

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    Exxon makes 8% profit about every year
    How is it they can do that with the price of oil at a level that is driven by pure speculation?
    and
    Who is it that ends up with these speculated cost?
    The Saudis?
    The driller?

    Lets start there
     
  2. Mr. H.
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    Mr. H. Diamond Member

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    Exxon is so freakin' huge, one or more segments could lose mony and they'd still return that 8%. They're quite diversified.

    Not sure what you mean by speculated cost.
     
  3. Rocko
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    Rocko Gold Member

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    I think he means who the speculators are :confused:.
     
  4. Staidhup
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    Staidhup Gold Member Supporting Member

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    Not too clear as to the point? Oil and natural gas prices are dictated by foreign oil cartels, driven by supply/demand. Exxon purchases oil on the open spot market, drills, distributes natural gas, refines what they produce and purchase, but most importantly distributes with a built in profit margin. So they make money and speculators that purchase leases and run wildcat exploration outfits make and loose the big bucks. The art of management is to insure continual supply and contain operating costs.
     
  5. Staidhup
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    Staidhup Gold Member Supporting Member

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    When they drill and develop a new unproven field based on geologic research they are speculating that the reserves are sufficient to cover the development and transportation expense at the same time make a profit (risk reward). Is that what you mean by speculator?
     
  6. Trajan
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    Trajan conscientia mille testes

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    the big money is from the institutional hedgers, not speculators. *shrugs*
     
  7. francoHFW
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    francoHFW Platinum Member

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    Hedge fund speculators- Pub cronies, dupe...duh. Change the channel.
     
  8. JRK
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    JRK Senior Member

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    Both of your threads were excellent
    I am trying to get the Libs to figure some of this out them selves, to think in-side the box
    BHO claims the speculators are the reason Gas is 4.00 a gallon. If this is the case some-one, some-where is making huge profits.
    I would like the Libs to have identified that group and explain to us why, the why Obama has not pointed these figures out to us, to identify that place were real cost meets a speculated, driven up cost that is not real
    I seen a Lib on CNBC yesterday that stated oil is 30.00 inflated. That would mean 30% profit for some-one

    Another words if there leasing the off shore wells
    If a large drilling company has a cost of 70 dollars a barrel to obtain and deliver the product for a price of 102 a barrel, call them out
    If a hedge fund is creating an atmosphere where they know it cost 70.00 a barrel to obtain a barrel of oil, yet they bid 102 on the open market, let the SEC to ask them to come visit them
    Fix the problem you have to first identify it. BHO keeps telling us that speculators are the reason fuel cost are so hi
    then fix it
     
    Last edited: Apr 19, 2012
  9. JRK
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    JRK Senior Member

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    They would have to be involved in the product from its origin for it to help them. The only thing that would them would be volume of cash
    8% on 1.00 is 1/2 of what 8% on 2.00. This is the record profit analogy BTW

    My point is if the price of crude oil is artificial, some-one is making huge profits. If its a hedge fund then they would be involved from cradle to death
    That could be pin pointed and BHO could back his claim up with and exact example

    GS has 52.00 a barrel in cost and there selling it for 102. BHO could make there life a living hell for it
     
  10. waltky
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    waltky Wise ol' monkey Supporting Member

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    It's election year...
    :cool:
    Price of oil still falling as supplies grow
    16 May`12 — The price of oil continues to decline on the expectation that world markets will be flush with extra supplies this year.
     

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