Price of oil drops 24% in 2 months

[Kuciwalker]

I am, but not by you. By CT

[Solly]

Originally posted by Victor Galis


It does. The only problem is determining when we will hit "peak oil." He believes it is imminent, while other people might think it's centuries away. I personally believe it will be reached within my lifetime, though not any time soon (I'm only in my 20s).

Economists predict 6 recessions out of every 3. Odin predicts about 30..

[Flubber]

Originally posted by chegitz guevara
Because you dismissed energy price manipulation as a conspiracy theory. What, do you have the memory of a goldfish?

Che

In local markets I can see some conspiracies and price-fixing being way more possible.


In a global market like oil, it gets way harder. A lot of the major producers hardly talk to each other-- Here's the top 10

#1 Saudi Arabia 8,711,000 thousand barrels / day
#2 Russia 7,286,000 thousand barrels / day
#3 Iran 3,804,000 thousand barrels / day
#4 Mexico 3,590,000 thousand barrels / day
#5 Norway 3,408,000 thousand barrels / day
#6 China 3,300,000 thousand barrels / day
#7 Canada 2,738,000 thousand barrels / day
#8 Kuwait 2,270,000 thousand barrels / day
#9 Nigeria 2,256,000 thousand barrels / day
#10 Iraq 2,200,000 thousand barrels / day

I doubt you could get this group to agree on the shape of a table to meet at. While any of them might cut production to support price, that is a pretty open and obvious step and I sincerely doubt that you could get any 3 of them to agree on the best long term price for their own national interest.




BUt the main reason I don't see a conspiracy in the price spike for oil is that it doesn't make sense. A true conspiracy would work to elevate prices slowly and steadily and in ways that did not draw so very much attention.

THis price spike caused spikes in labour markets, demand for oil services and in commodity prices and was fundamentally unstable. Frankly is was good for some short term profit but none of the major oil countries or companies should be thinking in the short term. A monopolistic conspiracy would want stability most of all and conspiring to create instability in the market would not be in their interests.


Sorry che. The simplest explanation here is the best. The price went up because supply was restricted for a while when demand was increasing and people were a bit scared about other supply situations. The market shifted and now withless supply fears and some thoughts of economic downturn that may lessen deman, the price is coming down. It was a wild ride

[Dinner]

Originally posted by Kuciwalker
There you have it, people: the conspiracy theory loonies STILL believe it.

That's an idiotic statement. The companies involved later plead guilty in court and were fined with some executives going to jail. How in god's name could you have missed one of the major news stories of 2002-2003?

[LordShiva]

Prices spiked in India, too, which imports directly from nationalised oil companies in OPEC. Hard to blame Exxon for that.

[Kuciwalker]

Since when am I arguing about Enron? I'm talking about the recent looniness related to the high gas prices.

[lord of the mark]

Originally posted by chegitz guevara
Since most of the price hike was driven largely by speculation, there's no reason for prices not to fall. All it means is that consumers were screwed for no reason. Congress should force the ****ers to give us our money back.

Electricity is only movable over power lines, the power lines into Calif were extremely constrained, which was what made possible the price manipulation in the Calif electricity market. Theres no such analog in the oil market, and there was a rise in price globally, as well as increases in refiner premiums in the US. Orchestrating the global price rise would have been just about impossible, and the rise seems to have been in response to real uncertainties. There have been accusations in the past of refinery capacity being held off the market, but if anyone serious alleged that recently, Id like to see a cite.

Also, seeing as Enron is kaput, and that, AFAIK, they were never big players in oil markets (as distinct from NG markets) and that the oil markets work rather differently from elec markets (where product can be dispatched instantly, and there are time of day prices) I doubt very much these are "the same guys"

[Flubber]

Note I am doublechecking that source of the top 10

I got it here http://www.nationmaster.com/red/grap...ion/AFR&nofb=1 but I am wondering where Venezuala is on the list . They don't seem to appear high enough.

So don't accept the top 10 but my point about the diversity of the producers stands.

[lord of the mark]

Originally posted by chegitz guevara
Since most of the price hike was driven largely by speculation, there's no reason for prices not to fall. All it means is that consumers were screwed for no reason. Congress should force the ****ers to give us our money back.

actually any speculators who drove up the price by buying forward are pretty screwed as well.

a good portion of the money of course ended up in the pockets of oil exporters - IE the govts of Venezuala, Iran, Russia, etc. Id be very interested in how Congress forces them to give us our money back.

[Flubber]

Originally posted by lord of the mark


actually any speculators who drove up the price by buying forward are pretty screwed as well.

a good portion of the money of course ended up in the pockets of oil exporters - IE the govts of Venezuala, Iran, Russia, etc. Id be very interested in how Congress forces them to give us our money back.

I can be pretty certain that Canada doesn't plan to give any back-- People wanted our oil-- we told them the price and they paid

No "do-overs"

[DanS]

Originally posted by Flubber
Note I am doublechecking that source of the top 10

I got it here http://www.nationmaster.com/red/grap...ion/AFR&nofb=1 but I am wondering where Venezuala is on the list . They don't seem to appear high enough.

So don't accept the top 10 but my point about the diversity of the producers stands.

That list doesn't sound right. For one, there are 3 extra 0s at the end of all of them. Also, the U.S. isn't on that list, even though the US is a major producer.

[Flubber]

Originally posted by DanS


That list doesn't sound right. For one, there are 3 extra 0s at the end of all of them. Also, the U.S. isn't on that list, even though the US is a major producer.

yup

So reject the accuracy of the list. I don't have time to find an accurate one. Besides I was just trying to illustarte the point that there are diverse oil producers. The list was really not necessary

[DanS]

Here's a good one with 2004 figures...

http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html

[Flubber]

Che

If everything is a conspiracy why are the natural gas companies and countries permitting natural gas prices in North America to go so very very low?

Its a localized market where price-fixing is much easier than oil

[Flubber]

Originally posted by DanS
Here's a good one with 2004 figures...

http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html

THat looks better. The rest stay pretty much the same more or less. BUt the US and Venezuala are pretty notable omissions