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Old February 28th, 2013 #41
Leonard Rouse
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Originally Posted by John from Canada View Post
You're just babbling Leonard. I have already pointed out that the vast majority of futures contracts are speculative. Due in part to the fact that only a small amount of oil is actually traded in these markets.

Nonsense. The point of having a benchmark is to account for variations in quality and processing costs in oil from different regions. The problem with trading only a few preferred grades of oil is that it creates a shortage where none exists.
The difference between us is that I come with facts and you come with conjecture. Cite your sources. Provide some data.

Otherwise, you're just another religious fanatic.
 
Old February 28th, 2013 #42
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Since the rise in oil correlates with the rise in other commodities, how do you explain that? Are all the others also being putatively manipulated?

I mean, John, you have a very specific (if ill considered) theory on oil pricing. How do you account for gold? Corn? Cotton? They're all trading in historically high ranges (nominally). Live cattle are at higher levels than ever. Are they all fixed?
 
Old February 28th, 2013 #43
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Originally Posted by Leonard Rouse View Post
Since the rise in oil correlates with the rise in other commodities, how do you explain that? Are all the others also being putatively manipulated?
We're told the high price of oil is due to growing demand in China. It's normal for the price of oil and copper to increase when a country the size of China is growing at the rate of 10% a year.

But suppliers have been able to keep up with growing demand. Partially due to the fact that China does not buy all of their oil on the spot market. They have trade agreements with Venezuela, Iran and countries in Africa where they are producing their own oil. This is the real nature of the "world market". Private agreements, fueled by weapons and diplomacy. China only turns to the spot market when they can't get the oil any other way.

My question to you is how much of the world's oil consumption is handled through these commodities markets that determine the benchmark price, and how much of it is not?

Price ultimately boils down to supply and demand. If only a limited quantity of oil is traded in the commodities market, then the price will increase as if there were a shortage, even when there is no actual physical shortage.
 
Old February 28th, 2013 #44
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Originally Posted by John from Canada View Post
We're told the high price of oil is due to growing demand in China. It's normal for the price of oil and copper to increase when a country the size of China is growing at the rate of 10% a year.

But suppliers have been able to keep up with growing demand. Partially due to the fact that China does not buy all of their oil on the spot market. They have trade agreements with Venezuela, Iran and countries in Africa where they are producing their own oil. This is the real nature of the "world market". Private agreements, fueled by weapons and diplomacy. China only turns to the spot market when they can't get the oil any other way.

My question to you is how much of the world's oil consumption is handled through these commodities markets that determine the benchmark price, and how much of it is not?

Price ultimately boils down to supply and demand. If only a limited quantity of oil is traded in the commodities market, then the price will increase as if there were a shortage, even when there is no actual physical shortage.
Though you keep asserting this (in bold), you never cite any evidence. It's because you don't have any.

You also side-stepped the question: Why have all commodities have risen? You have to ignore the question because to answer it exposes your oil theory as bogus.

Talk is cheap. Your theory--totally without evidence--supposes futures are wildly divorced from the true value of actual oil. If you really believed what you were saying, you'd be buying cheap physical oil and selling overpriced futures against it for delivery, becoming rich beyond your wildest dreams. No one is stopping you but you. You aren't because you can't.
 
Old April 10th, 2014 #45
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Old November 13th, 2014 #46
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The other half of the energy story and also a big influence on prices, says Hoenig, is the advancement in the U.S. energy industry, and the production of great oil companies particularly in the United States. "We like to rail against fossil fuel companies, but it is their advancements in oil extraction and fracking that have brought oil and natural prices to historic lows.”
http://finance.yahoo.com/news/oil-ma...211726433.html
 
Old December 4th, 2014 #47
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pink oil millennium still not arrived

http://gawker.com/oil-is-so-cheap-no...hat-1665118995
 
Old December 4th, 2014 #48
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Quote:
Price ultimately boils down to supply and demand.
Economist: low demand necessitates higher prices, but as demand increases, prices fall. Look at the computer business, or the home video business. The first computers and VCRs had very small markets and were therefore extraordinarily expensive. But then demand grew and the price could come down, leading to even greater demand.

Me: But doesn't low demand necessitate lower prices, to incentivize buyers?

Economist: Yes, that is true as well.

Me: So low demand means high prices …

Economist: Correct.

Me: … and low demand also means low prices?

Economist: Correct.

Me: What about supply? What does low supply do?

Economist: Low supply leads to high prices.

Me: And high prices lead to low demand?

Economist: They lead to low demand except when they lead to high demand.

Me: I see. What does high supply do?

Economist: It leads to low prices, to get rid of the stuff.

Me: Doesn't high supply also reflect low demand, which leads to high prices?

Economist: No, high supply reflects high demand, which leads to low prices.

Me: So high demand leads to high supply, which reflects low demand, which means low prices.

Economist: Yes. It means high prices.

Me: It means high prices or low prices?

Economist: Yes.

Me: Given what you said about computers and video, why does the popularity of an item actually lead to a higher price for that item? If no one wanted iPads, they would be $20 a pop. (And their price is coming down now as interest in them, i.e., demand, is slackening.)

Economist: You are neglecting the cost of inventing and making iPads, which has to be taken care of.

Me: So there are factors in economics other than supply and demand?

Economist: No, there is only supply and demand. Price ultimately boils down to supply and demand.

Me: But, what about costs?

Economist: You are a fundamentally confused ignoramus who lacks the proper credentials. Good day.
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Last edited by Sean Gruber; December 4th, 2014 at 05:40 PM.
 
Old December 5th, 2014 #49
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Default Right now, the price averages 68 and a half dollars a barrel:

I haven't yet seen the prices at the pump, today. But, yesterday, a liter of diesel costed 1,20€. I'm going to dig up the pump price during the last time oil costed this much. Will edit.

http://www.oil-price.net/



Here we go. The last time oil costed $70 a barrel was in 2007:

http://books.google.nl/books?id=yUss...%C3%9F&f=false

Quote:
...Die Rohölpreise haben sie für ein Barrel (0 1 faß mit 159 liter) Rohöl von 70 US-Dollar im August 2007...
According to the following site, diesel was much less expensive @ $70 a barrel than it is presently at between $68 and $69. Just more proof that the industry is quick to adjust the price of already refined oil to current crude oil prices. But, not the other way around. (Please move this thread to the "Scams" sub-forum):

http://www.zufall.de/dieselpreis_con...lng=en&src=ifr

Quote:
...15. August 2007 93,46 Euro...
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Last edited by Samuel Toothgold; December 5th, 2014 at 04:24 AM.
 
Old December 5th, 2014 #50
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funny how that peak oil stuff works.
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Old December 5th, 2014 #51
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Quote:
Originally Posted by Sean Gruber View Post
Economist: low demand necessitates higher prices, but as demand increases, prices fall. Look at the computer business, or the home video business. The first computers and VCRs had very small markets and were therefore extraordinarily expensive. But then demand grew and the price could come down, leading to even greater demand.

Me: But doesn't low demand necessitate lower prices, to incentivize buyers?

Economist: Yes, that is true as well.
This economist exists only in your imagination. The market when consumer VCRs were introduced was anything but low demand. The early adopters created huge demand, that's why there was no shortage of customers ready to pay $1000 in 1978 dollars for a video recorder, despite having no market for prerecorded videotapes.

When the early adopter market was saturated lowering prices expanded the market to less technical users. At the same time the creation of a prerecorded videotape market, with a consequent boom in video rental stores, made the product much more useful to the average consumer.

As prices fall - or rise - the composition of the market changes. To understand the price of a specific product you need to know all the factors impacting supply and demand. The price of an innovative product is a lot harder to predict than a commodity. That's why you can buy oil futures but not ipad futures.
 
Old December 5th, 2014 #52
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Quote:
Originally Posted by Sean Gruber View Post
Economist: low demand necessitates higher prices, but as demand increases, prices fall. Look at the computer business, or the home video business. The first computers and VCRs had very small markets and were therefore extraordinarily expensive. But then demand grew and the price could come down, leading to even greater demand.

Me: But doesn't low demand necessitate lower prices, to incentivize buyers?
Prices are determined by supply and demand in the market at that time. But markets change over time - supply changes, and demand changes.

Prices of tech goods fall because producers find ways of making it cheaper and better. If the market grows bigger, then more producers want a slice of the market, and all producers want to out-compete their rivals, so they invest more so they can produce better and cheaper, so prices fall over time.

The same has happened in the oil market. The price was so high that it was worth inventing and developing fracking - that increased the supply of oil - and that's one of the reasons the price of oil has fallen.

Quote:
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Economist: You are a fundamentally confused ignoramus
Your imaginary economist has a point there.
 
Old December 5th, 2014 #53
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Originally Posted by Samuel Toothgold View Post
I haven't yet seen the prices at the pump, today. But, yesterday, a liter of diesel costed 1,20€...
The local discounter's price was 1,21. The majors like Shell are usually higher. Shell has an electronic price board which is subject to immediate change. When the price board shows 1,21€ as you're driving in, it coud jack up to 1,36, by the time you reach the pump. Shell does price gouge, after a certain evening hour.
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Old December 5th, 2014 #54
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Gas is $1.99 a gallon in Oklahoma.


Quote:
West Texas Intermediate (WTI), also known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing.

It is the underlying commodity of Chicago Mercantile Exchange's oil futures contracts. The price of WTI is often referenced in news reports on oil prices, alongside the price of Brent crude from the North Sea.

Cushing, Oklahoma is a major trading hub for crude oil and has been the delivery point for crude contracts and therefore the price settlement point for West Texas Intermediate on the New York Mercantile Exchange for over three decades.
West_Texas_Intermediate West_Texas_Intermediate
 
Old December 6th, 2014 #55
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Quote:
Originally Posted by Samuel Toothgold View Post
The local discounter's price was 1,21. The majors like Shell are usually higher. Shell has an electronic price board which is subject to immediate change. When the price board shows 1,21€ as you're driving in, it coud jack up to 1,36, by the time you reach the pump. Shell does price gouge, after a certain evening hour.
The diesel price isn't directly linked to the gasoline price because the ratio of gasoline to diesel fuel from crude oil varies, as does the relative demand for diesel and gasoline.

The most significant manipulation of the fossil fuel market comes from state owned oil companies conspiring to raise and lower production.
 
Old December 6th, 2014 #56
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Okay, let's compare gasoline prices now and then, as crude oil costed 68 1/2 dolars per barrel.
Quote:
Originally Posted by Sam Emerson View Post
...The most significant manipulation of the fossil fuel market comes from state owned oil companies conspiring to raise and lower production.
Who's state owned, besides Q8 and Statoil? The highest price fluxuations I've ever witnessed in Europe were commited by Texaco and Shell. The latter obtaining perhaps most of it's crude from third world wells.
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Last edited by Samuel Toothgold; December 6th, 2014 at 03:15 PM.
 
Old December 6th, 2014 #57
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Venezuela announces budget cuts and other financial measures in the wake of OPEC decision

By Alexander Fangmann
6 December 2014

The decision by the Organization of the Petroleum Exporting Countries (OPEC) oil cartel to maintain daily production levels at 30 million barrels per day has exacerbated Venezuela’s financial and political crisis.

The country is heavily dependent on the oil sector, which makes up 96 percent of its export revenue, and which it relies upon to fund imports and government spending. With oil prices plunging from around $100 per barrel to around $60 per barrel, budget deficits have risen to unsustainable levels and led to dwindling financial reserves.

The move by OPEC, driven by Saudi Arabia and the Persian Gulf monarchies, is an attempt to undercut the profitability of US-based shale oil producers and force them out of the market. It was opposed by Venezuela, Russia, Angola, Nigeria, and several other countries that require high oil prices to balance their budgets.

Economists believe that Venezuela requires an oil price of $100 per barrel to stabilize its finances—a figure President Nicolás Maduro has referred to as a “fair price”—and the International Monetary Fund estimates that $120 per barrel is needed to fully balance the budget.

A report in the Financial Times noted that a Venezuelan economic consultancy estimates that Venezuela loses $700 million in yearly revenue for every one dollar decline in the price of oil, with total revenue falling to $43 billion from $77 billion for the year. The current fiscal deficit, the difference between what the government spends and the revenue it takes in, is thought to be about 17 percent.

Financial markets and analysts have responded, with the trading value of Venezuelan bonds set to mature in 2027 falling to 51.5 cents on the dollar—the lowest in five years. The cost of credit default swaps, which insure bondholders against a Venezuelan default, have risen to 49.51 percent, the highest in the world, reflecting an 83 percent likelihood of Venezuela defaulting on its debt sometime in the next five years.

Venezuela was already reeling from the global economic crisis, with an inflation rate of over 63 percent earlier in the year and shortages of staple consumer goods. After the announcement, the bolivar fell to a new low of 155.8 per dollar on the black market, down 50 percent from the previous month. Foreign currency reserves are at an 11-year low, at $22.3 billion, after the government transferred $1.3 billion in Chinese loans to the Venezuelan Central Bank to shore up finances.

Financiers are demanding swifter action from the Maduro government. Jane Brauer, from Bank of America, clearly upset with the current tempo, wrote, “The Venezuelan government has not been very responsive, not acting fast enough to adjust, and not calming the markets with executable plans to respond to these external pressures.”
Phillip Blackwood, a managing partner at EM Quest Capital LLP, was quoted in Businessweek, saying, “They’ve been dragging their feet, but it’s inevitable they will have to make adjustments.”

On December 2, following the OPEC decision, President Maduro, not one to upset the financiers, announced that in order to “maximize resources,” the government would cut the budget by 20 percent in “discretionary and luxury spending,” although he claimed that he would not touch social spending or the so-called Bolivarian misiones.

“This commission is going to take an axe and chop wherever we need to,” Maduro said. In regard to areas targeted for cuts, he said, “I have ordered a revision of salaries of ministers and state enterprises, starting with the president of the republic.” With this formulation, among the targets could be workers at PdVSA, the state-owned oil company.

Venezuela has also moved to adjust its currency exchange mechanism, which currently overvalues the bolivar, leading to a parallel black market exchange rate. Maduro recently stated, “We’re going to be delivering a blow to the parallel dollar, which does so much damage.” The first move in this direction was the recent announcement that gives the central bank the ability to legalize the black market exchange rate. While this would exacerbate inflation beyond its already high levels, it would give the government more bolivars per dollar, allowing it to ease its budget deficit at the expense of workers’ living conditions.

At the same time, the government has moved to quickly increase the country’s reserves by liquidating assets, including debt owed to it by allies for subsidized oil, and by seeking additional financing from China.

Several sources have reported that Venezuela has effectively ended the Petrocaribe program, which saw the country providing subsidized oil to friendly Caribbean countries on favorable loan terms. According to these reports, Venezuela is selling loan debt owed to it by the Dominican Republic to Goldman Sachs for 41 percent of its value in exchange for a lump-sum payment, and is pursuing plans to do the same with oil debt owed by Jamaica.

Lazard, the investment firm reportedly behind the deal, was the same company involved in plans to sell Venezuela’s US-based Citgo refining operations, until the Venezuelan government announced it had abandoned those plans. However, ConocoPhilips, which is seeking compensation for assets nationalized by Venezuela in 2007, is alleging in a Texas-filed lawsuit that Venezuela still plans to sell its US-based subsidiary in order to avoid paying any judgments.

In addition to these measures, Maduro has also dispatched Finance Minister Rodolfo Marco to China to attempt to secure further loans. China has supplied about $50 billion in credit to Venezuela since 2007 in a bid to shore up its energy needs. By agreeing to more loans, Venezuela would be effectively committing to handing over an even larger percentage of its yearly output to China, even as yearly production has declined due to lack of investment in infrastructure.

The massive inflation and shortages of goods have led to a drop in support for Maduro and the ruling chavista regime. A November poll by the firm Datanalisis shows approval dropping to only 24.5 percent, down 5.7 percent from September and 26 percent from just after his election in April of last year. According to the poll, 85.7 percent of the population believe the country is heading in the wrong direction.

http://www.wsws.org/en/articles/2014.../vene-d06.html
 
Old December 7th, 2014 #58
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Originally Posted by Sam Emerson View Post
The most significant manipulation of the fossil fuel market comes from state owned oil companies conspiring to raise and lower production.
There's more motive for private multi-nationals to do this than public companies. Reading jew neo-liberal/globalist propaganda on Breitbart doesn't change this fact. State owned companies often charge high prices for exporting it, but within their domestic markets countries like Venezuela and Iran have dirt-cheap oil. As a nationalist, I think that's how it should be, especially when the consumers of your oil (USA) are your enemy.

The state owned oil company in Iran offers gasoline for 10 cents a liter, compared to the US average of 76 cents per liter offered by private corporations. Now, you might begin your kneejerk tirade about the evils of socialism at this point, but hear me out.

Private oil in the USA receives generous subsidies. Between 2002-2008, your heroic John Galt frackers received $72 billion in free taxpayer money. Considering the fact that the USA is the world's top oil producer, has a vast domestic market where demand is perpetual and high, and taking into account the free money given to private oil capitalists to play with by the taxpayer, oil should be cheaper than it is now. But it isn't.

These unscrupulous oil capitalists are happy to use our money for the risk, but fix prices for their own advantage (no shit) and keep the profits. The Iranians on the other hand, actually get something worthwhile from national investment allocated to their state oil company. The reason American oil is being exported to such a large extent for so cheap is because the US is trying to financially isolate and destroy Russia, whose oil exports give them leverage in Europe and generate revenue. If tomorrow Russia falls and Putin is replaced by a friend of ZOG, big oil will be given the green light and will happily stick the gas pump up your ass.

Libertarians don't trust the state to control their oil, but somehow they believe wholeheartedly in the honor system when it comes to private capitalists whose sole intent is to make as much money as they possibly can, regardless of what it takes, from a resource that literally fuels civilization. This is how oil capitalists are able to extort us on tax-day and at the pump. Selling oil is like selling air in the modern world. Yet instead of meeting national goals to take advantage of the oil boom and reduce the price of oil (and thus everything else), oil companies are exporting it to meet some neo-liberal and geopolitical goals.
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Last edited by Joe_Smith; December 7th, 2014 at 07:56 PM.
 
Old December 7th, 2014 #59
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To all the oil company fans here:

How does it make sense to simultaneously export large quantities of oil while importing it as well? Wouldn't the common sense approach, from a national perspective, be to either ban exports and instead release the surplus within the domestic market (thus lowering the price), or simply produce a certain amount and import the rest with conservation in mind?

Oh , but that can't happen. America's oil refineries are privately owned and demand imports, even if it defies reason when the alleged surplus is so great its flooding the global market and bringing OPEC and Russia to their knees. "Socialist" Obama, by the way, is the one who lifted the 4 decades long ban on exporting American oil.

This is all under the assumption that fracking is actually sustainable and profitable, which it isn't. If you cut tax payer subsidization and state-dispensed 0 interest loans from private fracking initiatives, you won't have $50 dollar barrels of oil coming out of South Dakota, that is if they even stick around. Reality is, these oil capitalists you libertarians are getting all giddy about like they're the Beatles at Heathrow, are only a few degrees away from the nigger welfare parasite red herring you routinely bring up to attack "socialism".

These assholes are making billions for themselves while gambling with our money without any accountability, and in most of the US they've barely put a temporary dent in gas prices.
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Last edited by Joe_Smith; December 7th, 2014 at 08:01 PM.
 
Old December 8th, 2014 #60
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The diesel price isn't directly linked to the gasoline price because the ratio of gasoline to diesel fuel from crude oil varies, as does the relative demand for diesel and gasoline...
Here in Europe, the percentage of vehicles which run on diesel is much higher than in the Kwa.
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