Skeptomania - Paranormal / UFOs, etc.

paul68 · Shaved Ape

http://news.yahoo.com/s/ap/20080715/ap_on_bi_ge/oil_prices

See, here is the glaring example of why it's all bullshit.

So prices "plummet" over 6 bucks, biggest drop in years.

Now, reverse that, and tomorrow you'd see gas prices jump ludicrously over a matter of hours.

We've seen it, over and over and over.

So, does this mean gas will be dropping in price hour after hour tomorrow?

Of course not.

So why is it, it can rise, and all of a sudden, we see it at the pump literally in a matter of hours.

But it can drop, and we see no reduction?

Yaish · Intel Chief

Because that doesn't play into oil companies making record profits. Now profit isn't a bad thing, but lets call it like it is. The oil companies are making money hand over fist because they keep raising prices. It's just certain economic conditions that exist right now that allow them to continue to do so arbitrarily.

paul68 · Shaved Ape

"But it does underscore investor uncertainty about the sustainability of sky-high prices and their potentially long-lasting effects on the broader economy."

And there it is. THAT is it, entirely. The price of oil is being artificialy inflated through what I imagine are some pretty clever means. Since I don't know jack really about how the price of commodities are manipulated, I'm woefully ill equipped to speculate, or even form a suspicion as to how. But then again, if all these "experts" can't nail it down, or more likely wont, I doubt any of us can either. BUT. I do believe 100% that oil should be at least half as exspensive as it is.

Gren · God Of Oreos

Yesterday's $6+ drop corresponded to an announcement by Brazil of their intent to increase production. The prospect of more supply equates with lessened demand. Since Brazil is a significant but not huge supplier of crude oil, the effect was minimal. The drop was caused when oil futures traders, aka speculators, jumped in to buy oil futures at the price at the time of the announcement, which drove the price down. The small drop reflects Brazil's smallish market share and the number of traders who decided to jump on it.

Those traders who did jump in now have contracts for crude oil at the rate listed when they jumped in. Those won't affect the price of gasoline at the pump unless and until they are sold and actualized, and the price of crude oil at that time will determine whether the trader, the speculator, made a good or bad decision. Basically they buy when they buy in hopes that they can later turn a profit, hence the term 'speculators', of course.

The jumps up and down in the crude oil market reflect what's happening in terms of the buying and selling of oil futures at the given moment. These contracts are most often sat on, held, until the trader feels it's now a good time to resell at a profit. He/she can hold them too long and get screwed too.

The price of gasoline at the pump depends on the costs of the refining, transportation to market, local supply and demand, etc. Pump prices don't quickly follow market prices because the gas at the pumps was refined from crude oil bought and sold in the futures market long ago, and the crude oil bought and sold yesterday that caused a $6 per barrel drop won't make it to the market for quite a while, by which time the costs of importing, refining, transporting, etc., will have changed, sometimes for better, sometimes for worse.

Confuses the shit out of me.

paul68 · Shaved Ape

Gren, Brazil's oil workers are threatening strike, which was said to have a negative impact, forcing prices higher, which was offset by this drop.

Edit** They are already on strike.

The oil companies have conceded already, that supply and demand is not as responsible a driving force for prices as once was thought. Demand has actually dropped, and is expected to drop further as more action is taken to reduce dependancy, around the world.

Which is even more confusing, since we are supposed to see the price drop as demand drops.

What you've said is the sensible take on it, but doesnt seem to mirro what actually happens.

For example, if it takes months for prices of crude to hiut at the pump, then why can Iran talk about nukes, and that night we hear oil prices rose due to mid east fears, and the next day, gas jumps 6 cents at the pump? THATS what I dont get.

Gren · God Of Oreos

Hey, I don't much understand it either. I'm beginning to wonder if anyone does, lol. What I posted above came from a financial planner who 'plays' with commodities futures on the side. Those were mostly his words.

wrphhi

asmodee

I remember a couple years ago when the prices were just starting to really climb if ANYTHING about oil was in the news, there was a 10 cent price hike the next day. Hell, one time there was GOOD news about oil and it still went up. I don't know if this played out everywhere, but here about 3 or 4 years ago the prices went up on the RUMOR that prices were going to go up. One gas station raised their prices really high and the others took a considerable jump based simply on a rumor that the prices were going to skyrocket. That one gas station had to pay a $10,000 fine for price gouging and make it right for any customer who presented a receipt for gas on that day.

The reason is simple. They're always looking for an excuse to raise prices as soon as possible. When it comes time to lower prices, however, they play it safe, take their time and make sure that things are going the way they think they are, all the while collecting double the profits while they are spending less but making the same.

paul68 · Shaved Ape

Powers wield sanction threat after Iran stalemate

http://news.yahoo.com/s/nm/20080719/ts_nm/iran_nuclear_dc_34

2-3 days. Gas prices will resume a climb.