Oil, Gas speculation, out of control manipulation

[frogger]

Sammy hates unfettered capitalism.

[sammyg2]

OK, the time to short valero was last December

Valero's up about 6% today and tesoro is up even more, I'm a-l-m-o-s-t- ready to jump back in. But not quite.

[Rondinone]

Simply put, the article is wrong. Here are the current supply numbers for the US:

http://tonto.eia.doe.gov/oog/info/twip/twip.asp

Clearly, there is not a glut in crude supplies in the US. Crude is average, gasoline stocks are above the 5-year average (hence the low crack spread) while distillates are very low due to european diesel demand (even after a mild winter!).

Here are the OECD stocks:

http://www.iea.org/Textbase/stats/surveys/OIL_WEB.XLS

Clearly, they are consistent for the last two years. Not a glut.

Add our consistent demand to rising third world demand, minus FLAT PRODUCTION FOR THREE YEARS, and you have rising prices.

IT'S NOT SPECULATORS, it is geology. You should get used to the new price paradigms, they're here to stay.

[Hugh R]

I believe it's called a "Cartel" same as DeBeers with diamonds and the Department of Agriculture. If I have an orange tree in my backyard and set up a roadside stand to sell those oranges in front of my house, technically, the DOA can stop me because, according to them, I could be interfering with interstate commerce. It's not just the arbitragers (speculators). My rudamentary knowledge of economics says that those speculators can't collectively drive up the market unless they are a cartel. Otherwise they're just traders trying to make a profit. At some point, they have to cover their options.

[red-beard]

A few things to helpus understand the price of Gasoline:

10% of the fluid in Gas is enthanol. It is not there for any "green" reason, it is the replacement to MTBE. The run up in the price of enthanol and the ethanol demand has nothing to do with global warming and a push to get away from oil. It is about our government mandating the use of Ethanol to reduce ozone levels.

Next, the value of our dollar has had more effect on the price of oil. I sell a lot of stuff overseas, and in dollar terms, we're doing great. But track it vs. the price of gold, we're not doing that well.

Our government is restricting where we can drill, what we can do, etc, right when we need more supply to help push the prices down. Why? environmentalists? I doubt it.

And the oil industry outside the US is a cartel. In the US, it would be illegal.

[Mo_Gearhead]

For those that missed my post some weeks back:

In 2000 the entire ‘futures market’ in oil was about 9 Billion dollars. In 2007 that market had grown to 250 Billion! That figure amounts to several months of oil demand for the entire world!

It is abundantly clear that 'speculation' has a LOT to do with the price of oil/gasoline today. These are people 'trading paper', they do not, nor do they ever intend to, take delivery of even one barrel of oil.

It will collapse of its own accord (like the housing bubble) some day.

[Jim Richards]

Capitalism rocks!

[jyl]

A month or so ago, I read an article about how, in some commodities markets, near-expiration futures were actually cheaper than the physical commodity. I assume that is because most of the players in the commodities markets today are hedge funds and other financial players, who only want the paper, not the goods. The last thing they want is for a railcar of coal to pull up to their Manhattan or London office. Because there are so many of them, the arbitrage that is supposed to prevent these price discrepancies isn't working.

[TyFenn]

Back in January, I recommended that you prepare to combat this by buying BEFORE the speculators jumped - so YOU could sell to THEM...


Unleaded Gasoline

Anyone here holding gasoline? It was down at 2.26 around this time or shortly afterwards - now, touching 3.00. Each contract is 42,000 gallons - each penny of movement is $420. 3.00 - 2.26 = .74 - .74 x $420 = $31,080 per contract. That will offset some high prices, no?

[Mo_Gearhead]

Unreal! Last night I'm channel surfing. Some guy that wrote a book about the oil 'mess' is there with Bill O'Reilly (Fox). Now O'Reilly always struck me as a reasonably intelligent guy, but at times he can rub me the wrong way and he can come off as a know-it-all.

O'Reilly states (I do not have the transcript/exact verbiage) that he thinks ONE guy somewhere (?) sets the price of a barrel of oil, daily (????) The author tried to impart to him the market aspect (supply/demand) and he basically brushed him off and stood by his fantasy?? Amazing.

[Jim Richards]

Originally Posted by Mo_Gearhead

Now O'Reilly always struck me as a reasonably intelligent guy

WTF?

[Jim Richards]

Interesting read from DoJ's website:

Remarks Prepared for Delivery by Attorney General Michael B. Mukasey on International Organized Crime at the Center for Strategic and International Studies
Washington, D.C.
April 23, 2008 - 1:30 P.M.

snipped

First, we learned that organized crime, in addition to being as varied and dangerous as ever, has a remarkable ability to adapt to changing conditions. As a result, the challenge we face with the new breed of organized criminals is quite different from the one we faced a generation or two ago. They are more sophisticated, they are richer, they have greater influence over government and political institutions worldwide, and they are savvier about using the latest technology, first to perpetrate and then to cover up their crimes.

This new group of organized criminals are far more involved in our everyday lives than many people appreciate. They touch all sectors of our economy, dealing in everything from cigarettes to oil; clothing to pharmaceuticals. These criminals invest some of the millions they make from illegal activities in the same publicly traded companies as we hold in our pension plans and 401(k)s. They exploit the internet and peddle their scams on eBay, and they're responsible for a significant chunk of the spam email we get.

When I use the term "international organized criminal," I do not mean to suggest that these are only foreign citizens, or to place blame for the problem on other nations. I am referring to the globalization of crime and to groups with members and associates around the world, including here in the United States.

I would like to talk for a few minutes about the specific threats identified in our assessment. As you would expect, much of our analysis relied on classified intelligence and on-going investigations, so I will not be able to go into too much detail; but I can give you some examples from operations we've already concluded.

The first threat we identified was that international organized criminals control significant positions in the global energy and strategic materials markets. They are expanding their holdings in these sectors, which corrupts the normal functioning of these markets and may have a destabilizing effect on U.S. geopolitical interests.

Organized crime has put down deep roots in various parts of the globe. So-called "iron triangles" of corrupt business leaders, corrupt government officials, and organized criminals exert substantial influence over the economies of many countries. This is a grave concern for U.S. law enforcement, and we have responded.

One of the most well-known recent examples is the case of Semion Mogilevich – also known as the "Brainy Don"--and several members of his criminal organization who the United States charged in a 45-count racketeering indictment in 2003. According to published reports, even after the indictment, Mogilevich continued to expand his criminal empire in a new direction. He was said to exert influence over large portions of the natural gas industry in parts of what used to be the Soviet Union.

The arrest of Mogilevich by Russian police in January is a positive sign. But we continue to watch the growth of organized crime and its penetration into some of these markets with great concern.

snipped

[HardDrive]

Originally Posted by Mo_Gearhead

Now O'Reilly always struck me as a reasonably intelligent guy....

Wow.

[Mo_Gearhead]

QUOTE : WTF??
Wow?
____________________

Apparently we have a gap in judgment at to what constitutes 'reasonable intelligence'?

His observation that he thinks ONE GUY, sitting somewhere(?), sets the price of a barrel of oil, EVERY DAY, may indeed enhance your gentlemen's concise arguments.

...I am reconsidering.

[sammyg2]

O'reilly is an intelligent guy. he just says stupid things to get ratings. I'm sure he knows lots of what he says is BS but it is entertainment.

[bell]

Originally Posted by nostatic

motorcycles get excellent gas mileage

this is the TOP post of the year so far

[Shaun @ Tru6]

Originally Posted by nostatic

motorcycles get excellent gas mileage

what do you think of this one:

http://boston.craigslist.org/nwb/mcy/653589438.html

Taking the MA riding class in 2 weeks.

[hardflex]

my Yamaha xs850 gets about 40 mpg, not that much better than a car. Do the new injected bikes do far better?

[nostatic]

Originally Posted by Shaun 84 Targa

what do you think of this one:

http://boston.craigslist.org/nwb/mcy/653589438.html

Taking the MA riding class in 2 weeks.

It won't be fast, but it is cool. As long as the mechanicals are in good order should be fun. Enjoy the riding class, and in the meantime buy these books:

http://www.amazon.com/Proficient-Motorcycling-Ultimate-Guide-Riding/dp/1889540536/ref=pd_bbs_2?ie=UTF8&s=books&qid=1209085607&sr=8-2

http://www.amazon.com/Total-Control-Performance-Street-Techniques/dp/0760314039/ref=pd_bbs_sr_4?ie=UTF8&s=books&qid=1209085607&sr=8-4

http://www.amazon.com/Total-Control-Performance-Street-Techniques/dp/0760314039/ref=pd_bbs_sr_4?ie=UTF8&s=books&qid=1209085607&sr=8-4

I'm getting a tad over 40mpg with the Aprilia. Pure freeway edges close to 50mpg. It is ride-by-wire and gives good performance/economy. Carbs will likely get you less of each and require more tweaking, but the price of entry is a lot lower.

[Shaun @ Tru6]

thanks Todd, there is a lot to choose from out there. Found a 1975 CB 400, needs battery, carbs cleaned, otherwise ready to go. it's a 4 cylinder, which seems a little odd. Will go to library to see if they have those books, thanks.

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