So you think oil and gas are up because of those evil speculators?

[TheGutterMaster]

It does boil down to instability in the Middle East. That, and the fact that drilling is so limited here. We need to invest in more Refineries too. There is really no way around it. Delay is hurtful. We need to be building more on Natural Gas too. I am really mixed with Nukes, considering Current Events, like 250 miles from major population centers seems too close, right now. Hydro-Electric??? Clean Water is going to be in short supply soon enough, Reservoirs are just so multi-use. For every reason to not build on that I can probably come up with 10 positive reasons. I sincerely believe that there are Powers that be, that are more into controlling us, than they are into serving the Public interest.

Well this all boils down to whether you want to sacrifice our environmental future for short term reductions in gas prices.

Green jobs are being shipped to china and they are becoming an economic powerhouse. If we could just invest more in green energy and not in more oil refineries, that could reduce global demand for oil and prices could come down, while at the same time becoming environmentally friendly. The oil industry has made large amounts of profits for years and i dont think it would hurt them that much if we invested in green energy.

If investing in green energy costs more money than so be it. To me it is worth more than just cheap short term investments oil.

I see this as a decision to buy a hybrid or a Hummer. A hybrid may be more expensive, but it will save you long term costs on gas.

 

[bigrebnc1775]

Actually I will qualify. Oil is high in part due to a political risk premium because of instability in the ME. Oil rose ~$10 in two days when war started in Libya, and continues to hit new highs. If peace were to suddenly break out and all the protesters went home, oil would fall $15-$20.

One thing I mention later in this thread that has been over looked the last time gas nation wide hit 4.00 per gallon oil pre barrel hit 140.00 we arr at that nation wide 4.00 pre gallon but no where near the 140.00 a barrel mark Plus demand is not as high as it was when oil was at 140.00 a barrel and 4.00 gallon

That's a function of refining spreads, I believe.

Maybe so but it is worth mentioning and comparing the prices from both year.

 

[bigrebnc1775]

One thing I mention later in this thread that has been over looked the last time gas nation wide hit 4.00 per gallon oil pre barrel hit 140.00 we arr at that nation wide 4.00 pre gallon but no where near the 140.00 a barrel mark Plus demand is not as high as it was when oil was at 140.00 a barrel and 4.00 gallon

Surprisingly, refiners are actually exporting about 20% of finished product.
There's a bigger demand overseas, and U.S. demand is waning and they expect an even bigger drop in domestic demand.

I'll try to find the link.

Found:

Oil Companies Are Making More Money and Less Fuel

Does that profit have the same value as it did in 2008?

 

[bigrebnc1775]

Think again. Well I was looking at the price of silver ad gold I also notice oil and here's what I noticed.
112.85 a barrel


Change due to Weakening of USD
+0.12 +0.11%

Now here's the tell tell story
Change due to Normal Trading

-0.13 -0.12%

Meaning oil would not be at this price if we did not have a weaken dollar Not much sales for oil it seems. Now who's at fault for the weaken dollar? The FED maybe?





Gold, USD, Price gold, Silver, US Dollar, Oil, Platinum - Kitco KGX

Oil prices are up throughout the world from Britain to China. Crude oil priced in US dollars have risen nearly 40% in the last year while the dollar has lost between 5 and 10% against most foreign currencies. So yes, the falling dollar adds to our cost, but it is not the primary cause of the price rise. Oil prices have been jumping because of concerns about supply disruptions in the Mideast, but it turns out there is a glut of oil supply. Prices are rising because speculators are buying up futures. Just as we have seen in the past, when speculators bid up the future prices, the market falls like rock within a year.

oil prices are up but no where near the 140.00 2008 mark. But the price pre gallon is the same as 2008. 4.00

 

[KissMy]

It does boil down to instability in the Middle East. That, and the fact that drilling is so limited here. We need to invest in more Refineries too. There is really no way around it. Delay is hurtful. We need to be building more on Natural Gas too. I am really mixed with Nukes, considering Current Events, like 250 miles from major population centers seems too close, right now. Hydro-Electric??? Clean Water is going to be in short supply soon enough, Reservoirs are just so multi-use. For every reason to not build on that I can probably come up with 10 positive reasons. I sincerely believe that there are Powers that be, that are more into controlling us, than they are into serving the Public interest.

Well this all boils down to whether you want to sacrifice our environmental future for short term reductions in gas prices.

Green jobs are being shipped to china and they are becoming an economic powerhouse. If we could just invest more in green energy and not in more oil refineries, that could reduce global demand for oil and prices could come down, while at the same time becoming environmentally friendly. The oil industry has made large amounts of profits for years and i dont think it would hurt them that much if we invested in green energy.

If investing in green energy costs more money than so be it. To me it is worth more than just cheap short term investments oil.

I see this as a decision to buy a hybrid or a Hummer. A hybrid may be more expensive, but it will save you long term costs on gas.

You have to compare apples to apples. Buying tiny little Hybrid Smart Car that has a horrible dependability rating & comparing the mileage to an awesome Hummer is ludicrous. But if you compare a more expensive Hybrid Hummer to a standard Hummer you will likely never recover the additional cost in fuel savings before the expensive environmentally polluting battery dies after which the point is moot.

 

[editec]

The value of the dollar relative to other currencies and commodities isn't the problem.

The international price of oil is up as speculators bid up the price.

Inflation will be the problem however, when/if the dollar falls against other currencies.

Wow, I never thought I'd ever find anyone in the universe that agreed with me on those points. We agree that a falling dollar isn't the problem, that inflation is not now the problem, and that inflation won't be affected by the dollar. Seems you and I are in a very small select group on those points.

The idea that oil prices are up because of speculator's bids is like saying oil prices are up because the numbers used for prices are bigger. Please tell me what your take is as to why speculators are raising their bid prices. Also, when we say 'speculators', we're talking about commodity option/future traders right?

I suspect that most reality based thinkers (lets call that "the market") if agree with you, expat.

AFter all it isn't like phemomena this isn't a well understand fact of economic life.

It's the economic mechanisms effecting the price of oil just as they price of any commodity.

The price of oil is going up for everybody, right now regardless of what currency they use

If you're an American, it's going priced in USDs.

If you're German the price is going up priced in USDs too, since petrodollars are what people use internationally to buy oil.

So your EUs will be converted (or valued at) the current excahnge rate of the EU to the USD when you puchase that oil.

So if the USD happens to be going down against the EU, when you convert your EUs into petro dollars to make that oil purchase, you won't really enjoy much benefit of the falling dollar relative to the EU because even though you'll have gotten more USDs for your EUS, the price of oil will still cost more of those USDs.

The fact that some people here are attempting to make the argument that that isn't true, is really their problem, not yours.

We are saying something here that is not subject to debate.

Facts is facts... and market pricing mechanisms aren't any kind of mystery.

Now it is certainly possible that the USD is losing real value and that the rising price of oil is factored into that price.

But when that happens we also see a drop in exchange rates against other currencies, too.

But it is equally possible (and in this case, more sifnificant to price than the fluxuating price of the USD) that the speculators believe that the market for oil is climbing while the supply is threatened.

And this is mostly what's causing these rises in futures prices at THIS time.

The price is going up if you buy it with dollars, Marks, Euros, Yuans, Francs, whatever.

Not because of exchange rates, not because those currencies are losing value, but because the specualtors believe that the demand is up and the supply is threatened.

Now if the supply demand picture stabilized the price could STILL go up, in USDs too.

But only if the USD was losing value against other currencies.

Then, while a German, for example, would have to buy his oil using petro dollars it would not cost him more because when he converted his Euros to dollars he'd have gotten MORE of them to pay for the oil.

 

[edthecynic]

Look at the price of oil in 08 and now
Weekly All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)

And the dollar index then and now
http://www.federalreserve.gov/releases/H10/Summary/indexn96_b.txt

Do I really need to add more?



Well, I will add more, I think instability in the Middle East was happening in 08;wasn't that when Israel was really threatening to blow up Iran's nuclear plant ; and there is instability there now. If a bull goes into a China shop, let's just say, I'm placing my bets on the bull.

Exactly, Iran had just tested a new longer range missile when oil peaked at $147+ in July 2008 over speculation of an Israeli attack.

But according to your dollar index link the dollar is at 98.6% of its July 2008 value, so gas selling at from $4 to $5 today with oil at around $113 cannot be from the loss of value in the dollar.

The price of gas reflects the fact that as a monopoly Big Oil can charge any price they want!!! They have jacked up their prices since the GOP took over the House because they know their shills like Crybaby Boner will protect them from any government attempts to stop them.

 

[Mr. H.]

Surprisingly, refiners are actually exporting about 20% of finished product.
There's a bigger demand overseas, and U.S. demand is waning and they expect an even bigger drop in domestic demand.

I'll try to find the link.

Found:

Oil Companies Are Making More Money and Less Fuel

Does that profit have the same value as it did in 2008?

I doubt it. Is that a rhetorical question? Where you headed with it?
Inquiring minds want to know.

 

[bigrebnc1775]

Found:

Oil Companies Are Making More Money and Less Fuel

Does that profit have the same value as it did in 2008?

I doubt it. Is that a rhetorical question? Where you headed with it?
Inquiring minds want to know.

I'm heading some where with it an no where. If the dollar is continully devalued the purchase price will cost more.

 

[sparky]

meanwhile......

Exxon Earns Whopping $11 Billion in First Quarter - DailyFinance


An investigation into possible manipulation of gasoline prices has uncovered "disturbing'' revelations, Attorney General Eric Holder said today.

"There are a couple things that … are disturbing,'' Holder said, declining to elaborate.

He indicated the information would be reviewed by a fraud task force formed last week.

'Disturbing' revelations in probe of possible gas price manipulation -


you can fuel some of the people some of the time.......

 

[Toro]

Word is that whenever one oil company raises their prices, all of them raise their prices.

Since BP's main oil line is located in Libya, and there were supply disruptions because of the violence going on there, they jacked up their prices. But other companies jacked up their prices as well.

I actually highly doubt this has to do with Libya, i think it has more to do with how unregulated speculation is with oil.

And once oil prices go up, you start to see a trend where food and other commodities go uo as well. Lets hope that oil goes down at the end of May like economists are predicting. You cant really count on them though because they were wrong about the current gas prices.

BP doesn't have a "main oil line." I don't think they are the biggest oil producer in Libya. I think that is ENI.

 

[Toro]

Look at the price of oil in 08 and now
Weekly All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)

And the dollar index then and now
http://www.federalreserve.gov/releases/H10/Summary/indexn96_b.txt

Do I really need to add more?



Well, I will add more, I think instability in the Middle East was happening in 08;wasn't that when Israel was really threatening to blow up Iran's nuclear plant ; and there is instability there now. If a bull goes into a China shop, let's just say, I'm placing my bets on the bull.

Exactly, Iran had just tested a new longer range missile when oil peaked at $147+ in July 2008 over speculation of an Israeli attack.

But according to your dollar index link the dollar is at 98.6% of its July 2008 value, so gas selling at from $4 to $5 today with oil at around $113 cannot be from the loss of value in the dollar.

The price of gas reflects the fact that as a monopoly Big Oil can charge any price they want!!! They have jacked up their prices since the GOP took over the House because they know their shills like Crybaby Boner will protect them from any government attempts to stop them.

There is no doubt that the dollar is playing into oil price strength. The value of oil in euros, yen, loonies or gold has not risen as much as it has in dollars. The dollar has been in decline for a decade. Dollar weakness is a big reason why investors are flocking into commodities, including oil.

 

[editec]

Look at the price of oil in 08 and now
Weekly All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)

And the dollar index then and now
http://www.federalreserve.gov/releases/H10/Summary/indexn96_b.txt

Do I really need to add more?



Well, I will add more, I think instability in the Middle East was happening in 08;wasn't that when Israel was really threatening to blow up Iran's nuclear plant ; and there is instability there now. If a bull goes into a China shop, let's just say, I'm placing my bets on the bull.

Exactly, Iran had just tested a new longer range missile when oil peaked at $147+ in July 2008 over speculation of an Israeli attack.

But according to your dollar index link the dollar is at 98.6% of its July 2008 value, so gas selling at from $4 to $5 today with oil at around $113 cannot be from the loss of value in the dollar.

The price of gas reflects the fact that as a monopoly Big Oil can charge any price they want!!! They have jacked up their prices since the GOP took over the House because they know their shills like Crybaby Boner will protect them from any government attempts to stop them.

There is no doubt that the dollar is playing into oil price strength. The value of oil in euros, yen, loonies or gold has not risen as much as it has in dollars. The dollar has been in decline for a decade. Dollar weakness is a big reason why investors are flocking into commodities, including oil.

Yes if the USD is declining against all other currencies then the price of oil in USD will reflect that change in value.

If the USD is not declining against other currencies than it will not UNLESS the price of oil is climbing due to market forces.

Seriously, I cannot believe that we're debating this.

What next? a debate about whether the sun rises in the east and sets in the west?

 

[expat_panama]

specualtors believe that the demand is up and the supply is threatened.

Another possible explanation is that traders are human, times are volatile and scary, so pricing is erratic. I like your explanation better for three reasons. First, demand has been down becuause of the contracting economy and as things loosen up demand will (as usual) increase faster than supply. Another reason is crazy politics in the middle east. The third cause is even crazier politics in the US.

The most unreasonable 'reason' given is Obama's goofy line that oil's up because of greedy speculators making money cheating. We're supposed to believe that somehow speculators are spending their own money to buy oil for more than it's worth (which bids up the price), so they can sell the oil (without bidding back down the price?!?) at a profit (to people who don't trade in oil?!?).

Marxists are crazy.

 

[Toro]

Exactly, Iran had just tested a new longer range missile when oil peaked at $147+ in July 2008 over speculation of an Israeli attack.

But according to your dollar index link the dollar is at 98.6% of its July 2008 value, so gas selling at from $4 to $5 today with oil at around $113 cannot be from the loss of value in the dollar.

The price of gas reflects the fact that as a monopoly Big Oil can charge any price they want!!! They have jacked up their prices since the GOP took over the House because they know their shills like Crybaby Boner will protect them from any government attempts to stop them.

There is no doubt that the dollar is playing into oil price strength. The value of oil in euros, yen, loonies or gold has not risen as much as it has in dollars. The dollar has been in decline for a decade. Dollar weakness is a big reason why investors are flocking into commodities, including oil.

Yes if the USD is declining against all other currencies then the price of oil in USD will reflect that change in value.

If the USD is not declining against other currencies than it will not UNLESS the price of oil is climbing due to market forces.

Seriously, I cannot believe that we're debating this.

What next? a debate about whether the sun rises in the east and sets in the west?

It's not just a unit of account issue. Many investors see that the government is deliberately debasing the dollar so they want to own real assets. Commodities are real assets. So if investors want to express a negative view on the dollar, one way is to buy commodities.

The dollar is the global anchor to which all other fiat currencies are attached. Thus if the government is debasing the dollar, it will ultimately drag down all fiat currencies. So you buy real assets to maintain the real value of your wealth.

 

[rdean]

How come right wingers don't understand what "investment" means. You could throw you're money into gold or silver, but they don't do anything. They don't grow. They are not inventions. They don't create jobs.

So you think oil and gas are up because of those evil speculators?

Not just oil and gas. Everyone knows this to be true. There is no shortage. Republicans deregulated Wall Street and they won't stand by and let it be regulated again. They get too much money.

Besides, after the attacks on Planned Parenthood, women's rights, education and the elderly, the Republican leadership cares even less about the American middle class than the Republicans on the USMB do.

 

[Big Fitz]

He seems to understnad whats going on

YouTube - Walmart CEO- 'There is no sign of recovery'

I thought it was very telling when he said in an interview "The retailers who know how much high prices are going to hurt their business may in a few weeks to months no longer be able to protect the public from the rising costs."

That was both a good moment to be so honest for him, because it showed me, at least another side of that retailer. But the scary part was that some of them out there WERE protecting us from increased costs.

 

[edthecynic]

Look at the price of oil in 08 and now
Weekly All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)

And the dollar index then and now
http://www.federalreserve.gov/releases/H10/Summary/indexn96_b.txt

Do I really need to add more?



Well, I will add more, I think instability in the Middle East was happening in 08;wasn't that when Israel was really threatening to blow up Iran's nuclear plant ; and there is instability there now. If a bull goes into a China shop, let's just say, I'm placing my bets on the bull.

Exactly, Iran had just tested a new longer range missile when oil peaked at $147+ in July 2008 over speculation of an Israeli attack.

But according to your dollar index link the dollar is at 98.6% of its July 2008 value, so gas selling at from $4 to $5 today with oil at around $113 cannot be from the loss of value in the dollar.

The price of gas reflects the fact that as a monopoly Big Oil can charge any price they want!!! They have jacked up their prices since the GOP took over the House because they know their shills like Crybaby Boner will protect them from any government attempts to stop them.

There is no doubt that the dollar is playing into oil price strength. The value of oil in euros, yen, loonies or gold has not risen as much as it has in dollars. The dollar has been in decline for a decade. Dollar weakness is a big reason why investors are flocking into commodities, including oil.

The question is not whether the falling dollar has played into the fact that gas is $4 to $5 a gallon today while oil is around $113 a barrel when it was $4 a gallon in 2008 with oil at $145+ a barrel, but how much!!!
It takes $1.04 today to buy what $1.00 bought in 2008, so the declining dollar can't account for high price of gas today.

But a monopoly can charge any price it wants for gas irrespective of supply and demand or market forces.

Inflation Calculator: Bureau of Labor Statistics

 

[Toro]

Exactly, Iran had just tested a new longer range missile when oil peaked at $147+ in July 2008 over speculation of an Israeli attack.

But according to your dollar index link the dollar is at 98.6% of its July 2008 value, so gas selling at from $4 to $5 today with oil at around $113 cannot be from the loss of value in the dollar.

The price of gas reflects the fact that as a monopoly Big Oil can charge any price they want!!! They have jacked up their prices since the GOP took over the House because they know their shills like Crybaby Boner will protect them from any government attempts to stop them.

There is no doubt that the dollar is playing into oil price strength. The value of oil in euros, yen, loonies or gold has not risen as much as it has in dollars. The dollar has been in decline for a decade. Dollar weakness is a big reason why investors are flocking into commodities, including oil.

The question is not whether the falling dollar has played into the fact that gas is $4 to $5 a gallon today while oil is around $113 a barrel when it was $4 a gallon in 2008 with oil at $145+ a barrel, but how much!!!
It takes $1.04 today to buy what $1.00 bought in 2008, so the declining dollar can't account for high price of gas today.

But a monopoly can charge any price it wants for gas irrespective of supply and demand or market forces.

Inflation Calculator: Bureau of Labor Statistics

That's why the oil companies are not monopolies. They can't charge whatever they want. Exxon, the largest private oil company in the world, accounts for 5% of global oil production. The reason why the gas price is $4 is because of refining capacity dynamics that differ from 2008.

The dollar affects the price of crude, not the price of refined products.

 

[edthecynic]

There is no doubt that the dollar is playing into oil price strength. The value of oil in euros, yen, loonies or gold has not risen as much as it has in dollars. The dollar has been in decline for a decade. Dollar weakness is a big reason why investors are flocking into commodities, including oil.

The question is not whether the falling dollar has played into the fact that gas is $4 to $5 a gallon today while oil is around $113 a barrel when it was $4 a gallon in 2008 with oil at $145+ a barrel, but how much!!!
It takes $1.04 today to buy what $1.00 bought in 2008, so the declining dollar can't account for high price of gas today.

But a monopoly can charge any price it wants for gas irrespective of supply and demand or market forces.

Inflation Calculator: Bureau of Labor Statistics

That's why the oil companies are not monopolies. They can't charge whatever they want. Exxon, the largest private oil company in the world, accounts for 5% of global oil production. The reason why the gas price is $4 is because of refining capacity dynamics that differ from 2008.

The dollar affects the price of crude, not the price of refined products.

EXXON is not the only oil company that the Rockefeller Family oil monopoly controls.

But to argue your refinery point, refining capicity is just about the same as in 2008, 17,593,847 barrels per day in 2008 and 17,583,790 now, a .057% difference