Exxon record profits again

[Doc_Bob]

Oil prices will go down when the world uses less of it. Ditto the comment on the military "securing" oil. If China/India are using more and more oil, even though the US uses the most oil per capita in the world, oil prices will stay high even if the US drops consumption, as prices for anything are set at the margin. The margin meaning marginal cost, ie the "next" purchase. If world pumping capacity is about equal to world demand, prices will be volatile and high. If demands drop enough below capacity that a nice cushion occurs, volatility and price will drop.

But hey, many of us are still driving big trucks right? I'll pay whatever gas costs, until I either can't afford what I'm paying, or the benefit I get for paying so much is less than the cost, in my individual opinion.

Mega Dittos!!!!!!!!!!!!!!! Why is it that so few people understand what you have just said and want to blame someone for the reality of supply and demand.
Bob
Bob

 

[Sully2]

OIL prices and the resulting cost of gasoline and diesel..etc..etc..wont EVER drop UNTIL...crude oil isnt traded anymore on the stock exchange like any other commodity!!!

If "someone" has the capital behind them to bid $85 a barrel for ALL the crude pumped for a period of time...what do ya think fuel prices will be then?

$3 a gallon fuel costs are all dividded up per..
.14 cents for the gas station selling it
.30-79 cents for taxes( depending on where you live)
.60 cents for the refinerys
$1.65 for the people who drill for it..transport it..and TRADE IT on the stock market!!!

 

[jayhaitch]

However if oil wasn't traded on a commodity exchange, what's the alternative? A fixed price? OK, who sets the price? Imagine the political bribery, death threats, deal making, etc, that would go on at the price-setting meeting. And besides, who decides who decides? I mean, who gets the power to decide what the fixed price will be?

Commodity exhanges are the fairest way to set prices, because it's the most free way to settle price: suppy vs demand. We may not like the result, but the alternative is far worse.

 

[Sully2]

However if oil wasn't traded on a commodity exchange, what's the alternative? A fixed price? OK, who sets the price? Imagine the political bribery, death threats, deal making, etc, that would go on at the price-setting meeting. And besides, who decides who decides? I mean, who gets the power to decide what the fixed price will be?

Commodity exhanges are the fairest way to set prices, because it's the most free way to settle price: suppy vs demand. We may not like the result, but the alternative is far worse.

ANY fixed price..regarless of how high...can be adapted to by the end consumer...but SPECULATION is the part that cant be handeled.

Remember when gold was $40 an ounce?..remember when it was $800 an ounce? I remember BOTH ( and I aint that old..not by a long shot)

"Imagine the political bribery, death threats, deal making, etc, that would go on at the price-setting meeting.".....Do you think all of those arent going on presently??...

The way to flat ..outright STOP oil speculators is to force them...to HOLD the material for a period of time...instead of bidding it up and once that mark is passed..SELLING it right away.

I can buy a US savings bond...but Im required to RETAIN it for a period of time...not turn right around and sell it the next day if the interest rates goes up. Same way with a "CD"..you buy it at "X" interest rate..and even if the rate doubles the very next day..."Sorry Charlie"..you come back in 36 or 48 months and get your money and THEN get a new CD.

 

[jayhaitch]

I understand what you're saying, yet speculation occurs everywhere all the time. Do you own mutual funds that invest in stocks? You're speculating. You're hoping the share price rises giving you a capital gain, and then the unit value of the fund increases. You're not speculating if you only buy CD's, or stable (as much as that's possible.....) blue chips stocks paying a good dividend. What about all these people buying houses they really can't afford, in the hope that they'll sell it higher. It's been tried: the tech boom, and bust. Buy high and sell higher is the greater fool theory. But I digress.

Yes gold was fixed under the Bretton Woods agreement, along with fixed exchange rates for currencies. It was broken by Nixon to pay for the then unpopular Vietnam war by allowing inflation, as opposed to increasing taxes to pay the billion dollars a day it was costing then. Has volatility increased? You betcha. The $800 80's gold was a speculative boom, that busted. No body wanted gold for 20 years. Now the bloom is off stocks, many naiive "investors" read: speculators, got their head handed to them, so now commodities are more interesting. Plus there's a real demand side to commodities that wasn't present before. Anyway, I fully agree speculation is unsettling, but you can only stop it by vigorous force. Even the old Soviet Union had speculation, unofficially: the black market, where everything was available, for an artificially inflated price.

How do we, western hemisphere folks, impact oil prices? By using less of it. Biodiesel, E85, increased home energy efficiency, more electricity generation (which means nuclear or coal, as natural gas is too valuable for all it's other uses to just burn for generation), driving less, smaller cars. Or just pay more

 

[HomeBrew2]

Sully,

Just a couple of questions/comments:

1. Wasn't the price of oil non-market driven in the '70's when we had gas rationing/VERY limited supplies? I'm half crocked right now and may not be remembering well. All I know is that right now, I can get gas anywhere ... I could not in the '70's.

2. Who the heck buys a 3 or 4 year CD ?!! Ya know, the inverted yield curve an all ...

Cheers!

 

[HomeBrew2]

Sully, sorry, I forgot, it seemed you had a question ... the reason a party that buys a cd is required to hold it for a certain time is, as I understand it, two-fold, first, the buying party is willing to assume NO risk and needs a guarantee of return of principle and interest. Second, the party offering he cd HAS to assume more risk than the party buying the cd so they can recover costs and actually make money on the transaction. I believe that the free-market system works as such: the party that assumes the most risk, has the opportunity to make a better than "cd" rate of return, and has an equal chance (maybe more) of losing some or all of his investment. It's the latter part that many are not comfortable with. I hope I was helpful in your dilema.

 

[Sully2]

Sully,
Just a couple of questions/comments:
1. Wasn't the price of oil non-market driven in the '70's when we had gas rationing/VERY limited supplies? I'm half crocked right now and may not be remembering well. All I know is that right now, I can get gas anywhere ... I could not in the '70's.
2. Who the heck buys a 3 or 4 year CD ?!! Ya know, the inverted yield curve an all ...
Cheers!

As to #1..there WAS NO GASOLINE shortage...ANYWHERE. While its true the GAS STATIONS could NOT GET any gasoline...there was NO gas shortage. It was contrived to simply get the price of gas UP... Example ( and not about gasoline)...remember the ELECTRICAL SHORTAGES that Califronia experienced back in 1999.. I have a dear friend that worked ( retired in 2004) for an electrcic company out there ( he lives in Modesto) and he told me in Jan of 2000...that the shortage was all "BS"... and 3 years later good old Ken and the boys from Enron go on trial! ( of course that rotten SOB did himself in earlier this month in his ski lodge in Colorado..natural cause..yeah..right. He was just scared ****less of being some guys "girlfriend" in the big house.)

 

[Sully2]

How do we, western hemisphere folks, impact oil prices? By using less of it. Biodiesel, E85, increased home energy efficiency, more electricity generation (which means nuclear or coal, as natural gas is too valuable for all it's other uses to just burn for generation), driving less, smaller cars. Or just pay more

If we decide to use LESS oil...the people that pump it will just cut back on production...and the dilemma will just continie on for even longer.

 

[HomeBrew2]

As to #1..there WAS NO GASOLINE shortage...ANYWHERE. While its true the GAS STATIONS could NOT GET any gasoline...there was NO gas shortage. It was contrived to simply get the price of gas UP... Example ( and not about gasoline)...remember the ELECTRICAL SHORTAGES that Califronia experienced back in 1999.. I have a dear friend that worked ( retired in 2004) for an electrcic company out there ( he lives in Modesto) and he told me in Jan of 2000...that the shortage was all "BS"... and 3 years later good old Ken and the boys from Enron go on trial! ( of course that rotten SOB did himself in earlier this month in his ski lodge in Colorado..natural cause..yeah..right. He was just scared ****less of being some guys "girlfriend" in the big house.)

Umm, "there WAS NO GASOLINE shortage...ANYWHERE", but "GAS STATIONS could NOT GET any gasoline" ... the net result to me, sir, was a FREAKING SHORTAGE. Recently, I have experienced no shortage. I would be perfectly happy to attribute that to black magic but if you can make a better argument, please do. I am always in "learning mode".

As to the ELECTRICAL SHORTAGES: we fixed that prob at the ballot box. Please note the RECORD high temps in Kalifornia these past few weeks with no REAL probs. Yes, some local probs as should be expected.

Rest assured though, THERE WERE NO ELECTRICAL SHORTAGES AT MY COMPOUND BECAUSE I HAVE A GENERATOR AND HAVE HAD UNINTURRUPED ACCESS TO FUEL ... the latest was last weekend in the 113° temp ... just a local prob. I simply used my el-cheapo Generac genny back-fed thru my house BECAUSE I HAVE MANY GALLONS OF (EXPENSIVE) GASOLINE ON HAND.

I am actually waiting for your comments on my analysis of the "market" as it relates to oil, other comodities and the odd 3-4 year CD. I am always willing to learn new things.

Cheers!