An Inconvenient Truth

[DudleySmith]

It appears you are the one talkin out your ass

it appears you're a clueless idiot.

 

[DudleySmith]

They can buy some contracts but not enough to change prices. Commodities investors are simple people like you and I. Regular folks just trying to make an investment for profit. Here is how it works:

You find ten barrels of crude oil in an old shed of a property you just bought. You have no actual use for them, so you put them on e-bay. You set the sell date and whatever people bid your oil for, that's what you sell it for no questions asked. As more people want to buy your oil, the price increases. That's how the market works.

So fuel prices are not set by companies, they are set by the tens of thousands of small time investors bidding oil up or down.

lol they allow day traders to gamble and screw around, not set prices they pay for anything. Less than 5% of contracts are ever delivered. lol

 

[DudleySmith]

They can buy some contracts but not enough to change prices

lol the suppliers can't change prices???? Rubbish. you only need to control 20%-40% of global supplies to effect wild changes in prices, and of course if you're an insider you can make out like bandits. Which is why market gamblers like Black Rock and others love having board seats on big oil companies. It also gives financial speculators leverage over the economies of entire countries.

 

[DudleySmith]

So fuel prices are not set by companies, they are set by the tens of thousands of small time investors bidding oil up or down.

They only set prices they pay, not the prices producers pay themselves or what the prices are of crude actually delivered, which is maybe 5% of those futures contracts, if that.

 

[DudleySmith]

Read the article and it all has very little effect on the Global Price of Oil...

As soon as the say Keystone pipeline you are proving your ignorance on the subject...

Do you understand that the world produces 77m barrels of Oil a day... OPEC alone is 30m... US is 12.4, the best ever did is 12.8...

Keystone offers not extra Oil, but if you bust a gut and produced 1m a day more... OPEC will just drop 1m...

OPEC increases and contracts supply to a amount they deem fit... US produce more, they produce less... US doesn't have the reserves to compete indefinitely, it too costly to produce..

And the sludge Keystone delivers is more expensive to refine and the transportation fuel produced for barrel is lucky to top 20% of a barrel equivalent; it's effect on gas prices in the U.S. is nil. It's just a Canadian govt. pipeline they didn't want to run across their own country's land to tidewater because it's nasty and toxic stuff.

 

[Ray From Cleveland]

lol the suppliers can't change prices???? Rubbish. you only need to control 20%-40% of global supplies to effect wild changes in prices, and of course if you're an insider you can make out like bandits. Which is why market gamblers like Black Rock and others love having board seats on big oil companies. It also gives financial speculators leverage over the economies of entire countries.

The market has rules and one of them is they can't buy contracts enough to change the global prices. Back during covid when prices were in the buck something a gallon range oil companies were losing money. Trump got OPEC to cut down production so the market didn't crash. The oil companies had no real control over it.

It's just like when Dementia got prices to spike. Oil companies were making record profits. Again, they had no control over it. You win some and lose some but in the end, it all brakes even.

 

[80zephyr]

No, they're set by a handful of companies, who collude to put prices where ever they are all comfortable with, whether nationally owned like the Saudis or semi-privates like Exxon and BP. When they cut prices, it's to keep market shares out of the hands of outsider, then they raise prices again after the competition is routed. That's why they're called oligarchies.

Then why do they ever lower it?

 

[Ray From Cleveland]

lol they allow day traders to gamble and screw around, not set prices they pay for anything. Less than 5% of contracts are ever delivered. lol

There are no day traders in the commodities market. The commodities market is completely separate from the stock market.

In the stock market you are actually buying part of a company and share in their profits or losses. In the commodities market, you are buying the product itself. If you buy 10 bushels of corn, you own those 10 bushels. If you do not sell those 10 bushels by the expiration date, they will deliver those 10 bushels to your door step. Same thing with oil. If you buy an oil contract for 10 barrels of oil and don't get rid of that contract by expiration day, they will deliver that oil to your house.

 

[ColonelAngus]

I am in Florida and not close to drowning.

 

[DudleySmith]

Then why do they ever lower it?

Same reason Standard Oil did, to kill competitors off with monopoly power. Standard controlled over 80% of the market, which was more than enough; they could afford to leave 20% of the marginal refinery products to others, no big deal. There are also political reasons, like squeezing Russian and Venezuelan companies and small indies.

 

[DudleySmith]

There are no day traders in the commodities market. The commodities market is completely separate from the stock market.

The same people, and most of the ownership of companies like Marathon and BP are financial speculators, not oil company operators; their only interest is in trading. Small speculators buy futures too, don't know why you think they don't, you said you trading them yourself.

 

[DudleySmith]

There are no day traders in the commodities market. The commodities market is completely separate from the stock market.

In the stock market you are actually buying part of a company and share in their profits or losses. In the commodities market, you are buying the product itself. If you buy 10 bushels of corn, you own those 10 bushels. If you do not sell those 10 bushels by the expiration date, they will deliver those 10 bushels to your door step. Same thing with oil. If you buy an oil contract for 10 barrels of oil and don't get rid of that contract by expiration day, they will deliver that oil to your house.

I know wht commodity trading is, you aren't schooling me, just your peer group who obviously have no idea.

 

[22lcidw]

They were loosing money at the time... Oil prices were too low to make it profitable to produce oil...

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We are blue in the face telling people. Oil is a global commodity, it can be shipped to all major markets in the would for about 1c a gallon...

The US government or people own none of the oil found in their country, they are only just geographically closer and thus have only < 1c advantage f buying it over the export market..

So if OPEC+ want to reduce supply then prices go up... They produce 30m+ barrels a day and other can't fill that supply...

American Oil Companies were not so obvious but it was reported that they lobbied for the higher oil prices in strange unison....

Big Oil does lobby together... If we don't think that is coordination then we would be fools.

Excuses for every issue known to humanity.

 

[Ray From Cleveland]

I know wht commodity trading is, you aren't schooling me, just your peer group who obviously have no idea.

Judging from your replies, no, I don't think you do fully understand.

 

[hadit]

American oil companies handle their oil, drilling, pipelines, marketing, and transportation.

But they don't set the global price of oil, which is my point.

 

[hadit]

So you don't know. I already knew that.

And you don't either, as evidenced by your non-answer.

 

[CowboyTed]

Basically, the US sets the cap on the price, as when it goes high enough, we can produce the more expensive stuff and keep it in line.

You know that the US Government doesn't produce Oil... Private companies do... US Government can't increase oil supply..

So you want to cap the price at say $60, those companies will just sell to export for the market value which might be $90...

Are you suggesting that US Government take over the Oil Companies?

 

[CowboyTed]

But they don't set the global price of oil, which is my point.

No but they got Trump to set a global restriction on supply by leveraging the supply of arms to Saudi Arabia....

There is setting and massively manipulating the price of Oil for your backers..

 

[hadit]

You know that the US Government doesn't produce Oil... Private companies do... US Government can't increase oil supply..

So you want to cap the price at say $60, those companies will just sell to export for the market value which might be $90...

Are you suggesting that US Government take over the Oil Companies?

I'm not talking about the US government, I'm talking about the US oil companies that are sitting on large quantities of expensive to extract oil, and when the price gets high enough, they can produce more, which will divert revenue from OPEC+ to American companies. That is not the US government setting any kind of cap through legislation.

 

[hadit]

No but they got Trump to set a global restriction on supply by leveraging the supply of arms to Saudi Arabia....

There is setting and massively manipulating the price of Oil for your backers..

Okay, so TRUMP! controlled the price of oil. Does that not also mean that Quid Pro is responsible for oil prices on his watch?