Shockjock1961
Champion Author
Illinois
Posts:20,124
Points:2,186,135
Joined:Apr 2006
|
Message Posted: Mar 16, 2012 8:41:20 PM
One of the main reasons is that the eastern part of the US purchases crude priced to the Brent Crude benchmark, which is priced significantly higher then the Cushing benchmark ($127 vs $107 per barrel)...
|
loaloa
Rookie Author
Los Angeles
Posts:74
Points:128,440
Joined:Apr 2007
|
Message Posted: Mar 16, 2012 8:19:04 PM
answer is simple, this year is election year, oil company need more money for their investment
|
DI
Champion Author
Twin Cities
Posts:20,195
Points:4,149,310
Joined:Apr 2001
|
Message Posted: Mar 16, 2012 7:50:13 PM
The simplest explanation is that there's no direct correlation between the price of crude and the price of gasoline. Go to the Gas Buddy Historical Price Charts. Check "Show Crude Oil Price" and click the "Quick Charts" "6 Years" link.
Note, amongst other things, how in 2008 gasoline prices didn't climb nearly as much as crude oil prices did. Estimates were that gasoline prices would have been in the $7-8/gal. range if they had.
|
GBMAX
Champion Author
Phoenix
Posts:4,653
Points:1,901,605
Joined:Feb 2005
|
Message Posted: Mar 16, 2012 4:46:25 PM
No
|
Nitecrew
Champion Author
Fresno
Posts:8,887
Points:2,116,525
Joined:Feb 2003
|
Message Posted: Mar 16, 2012 4:42:34 PM
"Several oil refineries have shutdown for some reason. So the supply of gasoline is fairly low"
So that's why we have record exports of gas!!!!!!!!!!!!!!!
|
forresj
Champion Author
Wilmington
Posts:2,789
Points:544,230
Joined:May 2005
|
Message Posted: Mar 16, 2012 11:14:41 AM
Several oil refineries have shutdown for some reason. So the supply of gasoline is fairly low.
|
tattoo666TX
Champion Author
Texas
Posts:2,567
Points:344,480
Joined:May 2011
|
Message Posted: Mar 16, 2012 10:21:57 AM
GREED
|
mingaa57
All-Star Author
St. Louis
Posts:733
Points:317,715
Joined:May 2011
|
Message Posted: Mar 16, 2012 10:18:03 AM
...concerns about a potential military action, by either Israel or even the U.S., against Iran caused high oil prices. Second, some oil refineries in the U.S. were closing, according to an EIA report. Third, oil and gas prices tend to rise every spring, in anticipation of increased demand during the summer driving vacation season.
|
brerrabbitTX
Champion Author
Houston
Posts:1,030
Points:18,285
Joined:Mar 2011
|
Message Posted: Mar 15, 2012 4:16:23 PM
And my comments about an alternative energy site was not directed at the CFTC link it was directed at the other link.
My comment concerning the CFTC information was "that highlights the fact that Goldman has 451,997 short contracts. What about their long positions of 419,324? That means they are only short 32,673."
And keep in mind that if you are short your bet is the price is coming down, not going up. If you are betting the price is going up then you want to be long. Long= you bought and own at a price, to make money the price has to go up. Short= you sold contracts and to make money the price has to come down.
So all I am saying is that taking a document out of context from the CFTC in an effort to show that Goldman is driving the price up by speculating it would be better to show that Goldman was massively long and therefore wanting the price to go up. In the case you give they want the price to go down.
I am also saying that you have to keep in mind that traders, and "speculators" can make money with prices going up or down. They are in no way bias to one side of the market. All a trader wants is volitility (prices moving a lot) because that's where they make money. In a flat market they cannot make money.
Because of this, and the fact that the average person does not understand that the market is a zero sum game, and does not understand that you have to look at net positions, not just one side or the other (buys or sales) you cannot take information out of context to make a point.
|
Had2Happen
All-Star Author
Scranton
Posts:993
Points:49,400
Joined:Sep 2005
|
Message Posted: Mar 15, 2012 4:00:07 PM
brerrabbitTX: That report about who held what in oil futures, was not from an alternative energy site, it was from the CFTC.
"This report clearly shows that in the summer of 2008 when gas prices spiked to more than $4 a gallon, Goldman Sachs, Morgan Stanley, and other speculators on Wall Street dominated the crude oil futures market causing tremendous damage to the entire economy,"
CFTC Report Reveals Rampant Speculation in Oil Markets
If you look at the address bar on the report, you will see it comes from Sen. Bernie Sanders office.
|
brerrabbitTX
Champion Author
Houston
Posts:1,030
Points:18,285
Joined:Mar 2011
|
Message Posted: Mar 15, 2012 12:37:31 PM
So everyone here thinks it is solely speculators driving the price up and points to information that highlights the fact that Goldman has 451,997 short contracts. What about their long positions of 419,324? That means they are only short 32,673. What about the fact that if you add everthing up both longs and shorts that due to the nature of a commodity market it's a zero sum game? In a commodity market doesn't there have to be a buyer for every seller? Last time I checked that was how it worked. Does the reach of the CFTC extend to the London commodities market? Does that mean they can make and enforce rulings in that market as well? What about offshore OTC markets? Can they regulate those as well? As long as Brent trades as a commodity so will WTI even if government regulators ban the trading of WTI on the NYMEX exchange. You just trade basis (the diff for Brent to WTI) and use the Brent contract as a proxy for WTI.
Finally while I am not one to go around casting aspurgeons at peoples links and sources, would you expect no less of an article and conclusion from the publisher of a alternative energy publication and website.
We are all frustrated with the prices but like it or not oil is a commodity traded in the global market. Find a way to cap the price domestically and the oil will find a way to the market that pays the most. And if Brent continues to trade and WTI does not the oil will find the best market regardless of where it comes from. Face it, if want continued oil here in the US we will have to pay what other buyers are willing to pay for it otherwise we won't get it.
[Edited by: brerrabbitTX at 3/15/2012 1:38:31 PM EST]
|
Grouse82
Rookie Author
Chicago
Posts:7
Points:5,890
Joined:Mar 2012
|
Message Posted: Mar 15, 2012 12:21:57 PM
While I understand the cause of the price of oil going up, I can't understand the apparent disconnect between the price of oil and the price of gas. Gas is going up at a higher rate than oil, compared to 2008, and yet we have a surplus of gas.
|
mikezztop
Rookie Author
Austin
Posts:8
Points:139,460
Joined:Nov 2005
|
Message Posted: Mar 15, 2012 11:57:53 AM
Speculators are driving the prices up much faster than supply vs demand. Obama can't reign in Wall Street due to is need for a $1 Billion campaign fund. If he had approved Keystone the futures market would not be so unstable. The only hope is that this decision makes him a 1 termer.
|
f250jbh
Sophomore Author
California
Posts:208
Points:184,875
Joined:Oct 2008
|
Message Posted: Mar 15, 2012 10:56:17 AM
WOW OIL FUTURES just went down on the announcement that USA and G Britten are releasing oil from there Reserves TEMP price drop WTI down 1.06 to 104.25 so far
|
Had2Happen
All-Star Author
Scranton
Posts:993
Points:49,400
Joined:Sep 2005
|
Message Posted: Mar 15, 2012 10:37:46 AM
You're welcome f250jbh: You'll find this interesting too.
2008 oil futures contracts
|
f250jbh
Sophomore Author
California
Posts:208
Points:184,875
Joined:Oct 2008
|
Message Posted: Mar 15, 2012 10:21:39 AM
Thanks @Had2happen Really good article Here in Part ......According to the Energy Information Administration, the supply of oil and gasoline is higher today than three years ago, when the national price for a gallon was $1.90. And while the national price of gasoline has almost hit $4, the demand for oil in the U.S. is at its lowest level since April of 1997.The global supply of oil is not the issue. According to the letter written by the Senators the world supply of oil has outpaced the demand while at the same time the price of Texas light sweet has risen 12%. Oil speculators are now in control of 80% of the oil futures market, double what it was ten years ago..........
|
Had2Happen
All-Star Author
Scranton
Posts:993
Points:49,400
Joined:Sep 2005
|
Message Posted: Mar 15, 2012 10:03:22 AM
Maybe this by Sen. Bernie Sanders can explain some of it.
Oil Speculators Are Now In Control Of 80% Of The Oil
|
OceanArcher
Champion Author
Mississippi
Posts:5,713
Points:1,329,350
Joined:May 2004
|
Message Posted: Mar 15, 2012 9:20:15 AM
Are we suggesting that our dollar's value has fallen that much in so short a time?
|
brerrabbitTX
Champion Author
Houston
Posts:1,030
Points:18,285
Joined:Mar 2011
|
Message Posted: Mar 15, 2012 8:59:08 AM
I can give you numerous reasons but quite frankly it's a waste of my time, because no one believes them and I get called a big oil shill or cheerleader. The answers are all out there and easy to find. Focus on export markets, value of the US dollar 2008 vs 2012, and the effect of increased Canadian Oil. Some of the answers can be found looking around these issues but I will let you come to your own conclusions.
|
grampi47
Champion Author
Illinois
Posts:5,939
Points:78,865
Joined:Apr 2006
|
Message Posted: Mar 15, 2012 7:54:09 AM
I'm sure the big oil cheerleaders will say the price of gas isn't tied to the price of crude, but isn't it curious how gas prices go up immediately when the price of crude goes up?
|
pper
Champion Author
Grand Rapids
Posts:3,089
Points:670,845
Joined:May 2011
|
Message Posted: Mar 15, 2012 7:49:34 AM
Obama wants gas prices high so that alternative energy looks cheaper.
|