Posted on 03/05/2012 6:41:53 PM PST by U-238
Betting that the price of oil will go up is a no brainer with ObaMao in the white house. Anyone who has money to invest can place that bet.
Turning on the spigot from Canada would have just the opposite effect, thereby hurting ObaMao's buddies like:
What’s your 2 cents Thackney?
Too many people believe that supply and demand versus price means they move equally and linearly.
A small move in demand nearly equaling the total available supply will create a skyrocket in demand, of any product that doesn’t have much elasticity in demand.
The spot market is a market for actual users of the the oil. It is not a market for speculators unless they have storage capacity and see a significant contango. Even then, it is quite limited before storage capacity runs out or becomes too expensive.
Given that the spot market is not a speculators market, and that the spot market nearly always matches the near month futures market, I do not see how the claim of price driven by speculators and not real supply/demand holds any water.
“Given that the spot market is not a speculators market, and that the spot market nearly always matches the near month futures market, I do not see how the claim of price driven by speculators and not real supply/demand holds any water.”
Thank you kind Sir.
Guess donations from Wall Street are down so Barry is doubling down on his finger pointing game via “journalism”.
Ahem ! http://www.freerepublic.com/focus/f-news/2854740/posts (see my #28 #29 there)
Did you mean demand or price?
I meant demand.
If demand is nearly equal to available supply, a bump up in the demand can send the price climbing very fast, if there was little to no spare capacity in supply.
Then I'm not sure I understand your statement. My reference was to the second "demand" in your statement. If you had said "A small move in demand nearly equaling the total available supply will create a skyrocket in price" I would agree with you otherwise I'm not sure I understand what you're saying. Why would a small increase in demand create a major increase in demand?
Thank you. I did mess that up.
If demand climbs when it is near or at available supply, a small increase in demand can create the price to skyrocket.
Then I agree with what you’re saying. However there is one entity that can rig the market and that is the US Government or its financial surrogates which is not beyond the bounds of possibility.
If you dont think the futures market drives prices look at what happened in India today. They banned the export of cotton.
If you’re saying that demand didn’t change much because of price, then I’d still want to see graphs showing how nearly equal production and supply were in the summer of 2008, and that was why everybody was fighting for the last tanker, which would be an astonishing coincidence with the known SemGroup disaster but an acceptable rebuttal.
Then I’d want to see how all of a sudden, again coincident with the SemGroup bankruptcy, and even as demand remained constant, the world was suddenly so awash in crude oil that its price collapsed by 80% in a six months.
The difficulty in even the US Government trying to rig that market is: "it is not the only market".
Crude oil and other petroleum products are traded in multiple cities around the world. Greatly restricting or otherwise playing games with one market would only drive the traders to the others, and it would be done in hours if not minutes. All can be reached electronically.
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