Quote:
Originally Posted by 125shifter
I have two takes on this and I don't know which is correct and I doubt we'll ever find out:
The fact is costs have gone up with virtually no increase in supply as one would expect with increased prices.
Is this because there's no more supply to be had and prices are reflecting this limited supply OR is this because nobody wants additional oil and prices are just going up because traders want to see how high they can push it without affecting demand?
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It's because there is already enough to go around. They make as much as we need and a little bit more. Oil and gas are readily available. If they made more than they could sell, where would they put it? They only have a limited amount of storage space.
The supply isn't the reason for the increase in price. Actually in the US they made more gas than we need and it kept the price down to the point where they were losing up to 5 cents for every gallon they made in January and into part of February.
It's all about oil, and the fundamentals do not support the current price at all. According to the fundamentals oil shouldn't be much higher than it was last year at this time. But it's doubled. A few wall street brokerage houses started what resembles a pyramid scheme and lots of smaller investors jumped on and it snowballed. I watched the game unfold and jumped in a few times and made about $20k, but I've been out for a few months because it was dirty and out of control and because I thought the bubble was ready to burst.