tag:blogger.com,1999:blog-11719208.post741911301321352828..comments2023-11-05T04:36:14.223-08:00Comments on The Mess That Greenspan Made: Hayward and Butler on speculation in oil marketsTimhttp://www.blogger.com/profile/16530974968126497397noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-11719208.post-5476923253460692222008-06-12T13:18:00.000-07:002008-06-12T13:18:00.000-07:00Oil relates to gasoline and diesel prices and that...Oil relates to gasoline and diesel prices and that is what the entire conversation is in regards to. Take a look at GasBankUSA, located on the web at http://www.gasbankusa.com. They discuss fixed price gas and how you can lock in a price even if gasoline prices go up. Interesting concept.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-88129774976991391402008-06-12T11:54:00.000-07:002008-06-12T11:54:00.000-07:00We've got plenty of oil. We don't have plentiful ...<A HREF="http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=ayj1uo_gdNI4" REL="nofollow">We've got plenty of oil. </A><BR/><BR/>We don't have plentiful oil production. Oil is much harder to reach which makes it more profit prohibitive than it has been in the past. Prices have to rise to justify the risks and costs to get it out of the ground.<BR/><BR/>PUD (Proven Undeveloped Reserves) mean nothing - they're kind of like repackaging junk loans into AAA tranches - if its not developed, it's not making its way to the market. Even a PDR (Proven Developed Reserve) doesn't necessarily mean that the oil is flowing out of the ground.<BR/><BR/>Iraq is not producing what it should.<BR/><BR/>There is a squeeze in the market, but methinks this is mostly caused by OPEC crimping supply. I'd do the same thing if I had fears that my country's only major export was a finite resource that is rapidly becoming depleted.<BR/><BR/>Fear of running out of oil will drive the market. That fear is fueled by rising worldwide demand.<BR/><BR/>Oil is also a political tool as well. <BR/><BR/>I've got to side with Ted Butler that the speculators are the shorts. The market has got to run its course. Too much money has been created... it has to go somewhere.Danhttps://www.blogger.com/profile/14611189349119964821noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-84416517000427550162008-06-12T10:06:00.000-07:002008-06-12T10:06:00.000-07:00The stated "fact" that consumption has outstripped...The stated "fact" that consumption has outstripped demand is obvously and provably false. Fact: there is no shortage of oil. Nowhere in the world is oil being rationed. Period. End of argument. <BR/><BR/>In a true market, when demand outstrips supply, prices are bid up and only those willing to pay the higher price wins the commodity. Those without the money get nothing. But with oil, EVERYONE is getting their deliveries. <BR/><BR/>The charts in this article are obviously wrong. It is IMPOSSIBLE for consumption of oil to be above production. That would only be possible if there were some massive tanks filled with previously pumped oil (like the US Strategic Oil reserve) which was being drawn down to support the additional consumption. However there is no such storage. In fact total world storage capacity is negligible-- a supply measured in days.<BR/><BR/>The bulls**t argument that demand is outstripping supply is such utter crap, yet gets repeated ad nauseum without supporting fact, both in blogs and the mainstream media. The truth is that the entire runup in oil prices is due to speculation and/or collusion. Those are the only factors in a market economy that can affect price when actual supply and demand are more or less in balance (LIKE THEY ARE RIGHT NOW!)<BR/><BR/>So who are these speculator and/or collusionists. Well... speculators, of course. And OPEC. When prices were low OPEC countries cheated on their production quotas, pumping more oil to make more money. Now that prices are artifically high, the reverse is happening. Countries are CUTTING BACK production to sustain the windfall profits, and to maintain their reserves. We're stuck in a spiral that needs to be broken.<BR/><BR/>Now that the facts are done, let me throw in my 2 cents as to what we should do. The US should announce a crash Manhattan-style program to replace oil with wind/solar/geothermal energy production. We should dedicate whatever money/tax breakes is necessary to get off oil in 10 years. Not only could we tell OPEC to go screw themeselves, we go back to being an oil exporter, like in the good old days.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-8178783014325734172008-06-12T09:43:00.000-07:002008-06-12T09:43:00.000-07:00Great graph. Production flatlined since '04.Great graph. Production flatlined since '04.jessehttps://www.blogger.com/profile/02155122147972263497noreply@blogger.comtag:blogger.com,1999:blog-11719208.post-82808705815939939412008-06-12T09:27:00.000-07:002008-06-12T09:27:00.000-07:00Since when did low fuel prices or low anything pri...Since when did low fuel prices or low anything prices become an entitlement. People need to grow up first. Then, they might catch on to what is really sucking on their purses.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11719208.post-43842564845409216462008-06-12T09:18:00.000-07:002008-06-12T09:18:00.000-07:00Interestingly, if you look at the production and c...Interestingly, if you look at the production and consumption data in the charts above and in the Statistical Review, crude oil consumption has exceeded production for the last ten years, but it wasn't until the gap started growing beyond a million barrels a day or so that prices began to rise. The gap last year was almost four million barrels a day.Timhttps://www.blogger.com/profile/16530974968126497397noreply@blogger.com