The price of oil

[Kidlicious]

Re: The price of oil

Originally posted by DanS
Daniel Yergin saying that lots of capacity is coming online and that he expects prices to moderate.

Well of course he expects prices to moderate. He has unbound optimism in technology and the free market. But what are his numbers, are they accurate etc...

[Vince278]

Originally posted by Vanguard
The price of gas will probably go down for six months. Then it will spike again to even higher levels.

The market is responding to the growing wealth gap in the US . It is rapidly becoming less efficient as the disparity in profit between serving the wealthy and the poor widens.

Finally! A post involving oil prices. I was beginning to wonder if anyone (including the starter) knew what the title of the thread was. I think I'll go elsewhere now.

[DanS]

Bubye!

[Lawrence of Arabia]

the economist's editor in chief resigned a few weeks ago. it will be interesting to see what stance the new editor takes on the 2006 midterms and the war in iraq.

[DanS]

Who cares? It's a Brit pub.

[Dauphin]

Do Brits not get a vote in Congress yet?

No (Iraq-esque) wars without representation.

[One_more_turn]

Large speculators set the price of oil, they are currently net long the crude oil future. If you want more details, check cftc.gov under the Commitment of Trader report.

Goldman Sachs, Morgan Stanley, George Soros, Jim Rogers all belong to Large Speculators.


Commercial Hedgers are the oil producers, they are currently net short the crude oil future.

Exxon Mobil, BP, Chevron all belong to Commercial Hedgers. Encana, the largest Canadian oil company, thought that oil price topped last year, sold short crude future heavily, and took a huge loss.


Last year, Goldman published a report saying that crude oil could hit $105/barrel in case of supply disruptions. This year, Soros expected $260/barrel under extreme conditions.

[Kidlicious]

Originally posted by One_more_turn
Commercial Hedgers are the oil producers, they are currently net short the crude oil future.

Isn't that because they are hedging?

[One_more_turn]

Yes. Oil companies usually go short the crude futures since they can deliver the real stuffs.

But airlines, refiners, chemicals, and other oil consuming industries are Commercial Hedgers, too; and those guys must long the crude future. For example, Southwest Airlines did very well in recent years because they locked in the price of jet fuel at the equivalent of $35 crude oil until 2009.

[Flubber]

Originally posted by One_more_turn
Yes. Oil companies usually go short the crude futures since they can deliver the real stuffs.

But airlines, refiners, chemicals, and other oil consuming industries are Commercial Hedgers, too; and those guys must long the crude future. For example, Southwest Airlines did very well in recent years because they locked in the price of jet fuel at the equivalent of $35 crude oil until 2009.

And oil companies were always happy to do that to lessen their price risk. For instance, most of the companies would be willing to enter into long-term contracts to provide crude at $70 today. While it eliminates their price upsside, it does the same for the downside and essentially transfers the price risk to the consumer/customer

[Kidlicious]

Another thing that is interesting is the record price for gold. Most of it is because oil profits are being invested in gold. It appears to me that this would be a bad investment is the price of oil comes down.

[Dauphin]

Sales of gold jewellery has gone down, diamond demand has gone up though.

[Dinner]

Originally posted by DanS
No. I tend not to link them because they've written a couple of articles before that have been so transparently and thoroughly wrong that even I have been able to spot it. I mark this up to broken editorial controls.

On the other hand, the subject matter that they cover is interesting.

More likely that translates into "I didn't like what they said." What they said was very likely to have been absolutely correct but you didn't like it because it didn't agree with your conservative principles.

[TCO]

Originally posted by Lawrence of Arabia

They are good for macro pussies who blather on and on and don't know how to calculate CAGRs or WACCs or monopolist best pricing.

what is the exact amount of utility that you derived from this post?

indiferencr balk bkla bka

Iy got me off.

[DanS]

Originally posted by Oerdin
More likely that translates into "I didn't like what they said." What they said was very likely to have been absolutely correct but you didn't like it because it didn't agree with your conservative principles.

I don't think you have a possible basis for affixing a likelihood to that statement.