- Joined
- Oct 17, 2009
- Messages
- 3,928
- Reaction score
- 1,559
- Gender
- Male
- Political Leaning
- Libertarian
Speculators are not interested in long term anything, they can't take delivery on any oil and it costs them to hold those tankers out in the bay. All Obama is doing is calling their bluff and taking the wind out of their greedy sails. Bush had the Saudi's increasing production before his re-election bid which did the same thing. I doubt they will do the same for Obama after he got Bin Laden out of his cushy digs.
Emergency reserves should be used in emergency shortages. Not to save a politicians political image.
Exactly.. and if there is a confrontation in the ME.. we may need those strategic reserves ..
Apparently you have no clue who oil speculators set the price of oil. It is ALL based on future supply. If they think in the future there will be more oil, then oil now is worth less. If they think in the future less oil will be available, it sends up the price now.
To say they don't care about long term anything is really quite ignorant.
We are having a fit over the fact gas has doubled since obama took the reigns and seems too be trending up yet again.
Even Lisa see's the absurdity of this move, that should impress you libs.
You know what's interesting though is that you libs constantly deny drilling more oil in US would stabilize prices but suddenly releasing a little from our reserves will do just that. You guys need to pick a story and stick with it.
When the increase in oil prices is primarily speculation-driven, yes, it can have exactly that effect.
More drilling will not have a significant influence on actual oil supply, nor would a tiny percentage increase in oil supply 5-10 years from now have any effect on speculators this year.
"Picking a story and sticking to it" is exactly the opposite of what one should do because the real world isn't that simple.
P.S. The Obama administration isn't as anti-oil as you think they are.
Since it largely is speculation driven, any additional production could potentially lower prices. So could threatening to open up the SPR. If the speculators think there will be more supply, the price will go down.
Since it largely is speculation driven, any additional production could potentially lower prices. So could threatening to open up the SPR. If the speculators think there will be more supply, the price will go down.
Speculation today is driven by geopolitics (Mid East). Threats by Iran probably have a great deal to do with the price of gas at our pumps.Since it largely is speculation driven, any additional production could potentially lower prices. So could threatening to open up the SPR. If the speculators think there will be more supply, the price will go down.
I don't think alot of you understand what speculating is. In it's simplest terms I am filling up every 50 gallon drum I have tomorrow with diesel, all 6 of them because I am speculating diesels going to do nothing but go up for a while. Same thing with airlines trucking comps etc. They try too lock in prices if they see them going up by purchasing Tens of thousands of gallons at a set price. As more comps do this the price goes up. If on the other hand something makes them think the price will go down, for instance if the pres of USA says he is going too open drilling up, these comps will quickly try to unload the high price fuel they have ordered and the price falls. It's not a perfect system but it works.
I don't think alot of you understand what speculating is. In it's simplest terms I am filling up every 50 gallon drum I have tomorrow with diesel, all 6 of them because I am speculating diesels going to do nothing but go up for a while. Same thing with airlines trucking comps etc. They try too lock in prices if they see them going up by purchasing Tens of thousands of gallons at a set price. As more comps do this the price goes up. If on the other hand something makes them think the price will go down, for instance if the pres of USA says he is going too open drilling up, these comps will quickly try to unload the high price fuel they have ordered and the price falls. It's not a perfect system but it works.
For the last few weeks all we've heard is the price of gas is going up, it will be over $5, the poor won't be able to afford it, it will stall the recovery and send the economy to a spiral. Well golly, if this isn't an emergency, what have y'all been crowing about?
If even the threat of tapping the reserves slows speculation, it's a good thing, not for Republicans, but for the country!
Re speculation
One has to consider the time frames of the oil contracts. The vast majority of speculators do not want to have delievery of the oil. The close the oil contract comes to the present date, the less speculation is going on. The spot price will have very little speculation, as the majority of bidders are those that want and need the oil for actual productive uses.
As the most publicized oil prices are the spot prices, future production will have little impact as it is oil that will not be avaliable for years to come
These brokers never take delivery it is true but they do buy up huge quantities of oil, on paper anyway and then resell it too people who do take delivery. In a sense they are alot like someone who sells stuff on e-bay for other people. They provide a service for a fee and our always trying to get the best price for their customers so they buy buy buy when oils going up and dump dump dump if they think oil prices will fall. I don't really see how any other system would be better, this really does provide liquidity in the market. As for spot prices they reflect what people try too see in their crystal balls.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?