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Gas to hit $4 a gallon in August

Discussion in 'Anything goes' started by Mmmm_Donuts, Jul 16, 2006.

  1. Doom and gloom

    Doom and gloom Active Member

    So Israel is kicking the shit out of Hezbollah.

    Can we expect the oil "futures" to drop tomorrow?

    About as much as I can expect my company to hire four workers in each department.
  2. JayFarrar

    JayFarrar Well-Known Member

    I keed, I keed. Well, at least I do. I can't speak for the others.
    At some point I'd like to have a civil discussion about why very complex things must be simplified to the point of stupidity.
    Economics, climate change, anything. But I know, what I ask for may very well be impossible.
  3. JRoyal

    JRoyal Well-Known Member

    I never said their wasn't informed speculation in the futures market, Ragu, just that it is pure speculation. And it is. I can gather up all the information on two NFL teams that I want, but when I conjecture about the score in their game, it's still pure speculation. Informed speculation, but no crystal ball involved.

    I've done a poor job putting down my thoughts on this, and maybe I am totally ignorant of the futures market, but the countries producing oil and the oil companies see definite gains every time they can make the traders in the futures markets think the sky is falling. So they do. They say that there's angst in this country, so there might be a disruption. This pipeline might get cut off. Prices go up. But, barring Katrina, there haven't been many if any major disruptions. So, I have to ask, if "when it comes to geopolitical factors, the market is damned good at pricing in the exact perfect amount of risk," how does that explain the market being so antsy about all of these disruptions that haven't come to be? If they're wrong every time, is that still the perfect amount of risk? Or is the nature of politics in the world right now just that nobody knows what the hell is gonna happen anywhere, so everyone's hedging their bets every time something happens? You seem to know a heck of a lot more about futures than most of us, so explain it.

    And no one's mortgaging their house because of what's going on with Iran. Bush is just crazy enough to actually go to war and force Iran to pull its oil out of the market, and if not there is still the possibility of UN sanctions (though I doubt that would happen really with China and Russia getting veto power). With that threat looming, it's too dangerous of a bet to make.
  4. The Big Ragu

    The Big Ragu Moderator Staff Member

    You're underestimating free markets. If they were so easily manipulated, no one would ever invest in them. You'd be an idiot to risk your money. If they were fixed, as you are suggesting, everyone would know it and you wouldn't be able to generate money on both sides of the fence, which is essential for the market to operate. Why would anyone bet against something they know is a sure thing?

    There is no way a handful of people or corporations can artificially drive up the price of the most in-demand commodity in the world. Not even for a day, but certainly not forever. Why would the Chinese, whose demand for oil is staggering put up with a bunch of U.S. executives fucking them? Too many businesses would be looking for cheaper oil and there'd be SOMEONE out there willing to break the oligopoly and undercut the others. That person would make a fortune.

    Honestly, if oil prices were really somehow being driven up artificially by greedy oil executives, you'd have a ton of very smart people who are not beholden to those executives buying oil futures right now at the inflated price, and at the same time selling futures at a ridiculously low price. They'd then just waiting for the whole scheme (which is ridiculously fantastical) to fall apart. They'd just have to wait for all the risks built into the futures price to not come to fruition and then when the price comes down (it inevitably would have to), pocket the difference.

    You're right about one thing and I have said this over and over on these threads. There are people getting rich from oil, and those are the people who have it. We don't have it. We sure as hell have a huge demand for it. Saudi Arabia and Iran are the two largest oil producers. There is huge worldwide demand, in which we are competing against everyone else for oil. There is a limited supply, in which a handful of countries hold all the cards. Think about it, who do you think is getting rich?
  5. JackS

    JackS Member

    When I read stuff like the U.S. continues to set records for gas consumption and the average MPG on new cars remains flat, I have absolutely no sympathy for the idiotic American consumer. $4 per gallon? Hell, make it $10.
  6. BTExpress

    BTExpress Well-Known Member

    But I MUST have a 300 hp engine so I can go from 0 to 60 in 4.3 seconds (that's soooo important) . . . so I can get to the next stoplight a few seconds sooner . . . and so I can cruise the "fast lane" at 80 mph while cursing out all those assholes only doing 65 ("Get out of my fucking way!!!!!") . . . and I can at least dream of driving 140 mph, even though no American road will permit it.

    And then, when my gas gauge is on "E" a few days later, I will blame the government.
  7. kleeda

    kleeda Active Member

    And I see this little great nugget today for all you "alternative source of fuel" people.

    Read on Al's Morning Meeting today over on the Poynter site that drought throughout the Midwest plus demand for corn and wheat is driving grain prices to near record levels.

    Why is corn going so nuts? As much as 20 percent of domestic production is being targeted for ethanol fuel this year. Now there's a comforting thought ... availability of gasoline (ethanol) is as volatile as the weather.

    Please get those drilling rigs humming boys, Boom's Hummer needs some juice.

    And all you guys blaming the oil companies for being gouging fat cats, you too can be a tycoon. It's called the stock market. Most of the big oil companies pay a nice annual dividend per share. Don't know what a dividend really is? You shouldn't post on this thread.
  8. Inky_Wretch

    Inky_Wretch Well-Known Member

    That's a fine mindset until your carriers quit en masse because they are losing money delivering the paper.
  9. dixiehack

    dixiehack Well-Known Member

    And furthermore, ethanol could only supply 12% of the need for fuel in America, and that would mean using the entire domestic corn corp.

  10. JackS

    JackS Member

    We'll have a lot bigger problems than delivering newspapers if consumers don't wise up.
  11. Angola!

    Angola! Guest

    Has anyone else noticed a big jump in prices in the last couple of days? I filled my tank up last week for $2.74 per gallon and today it was up to $2.99 per gallon. That is a pretty big jump in one week.
  12. kingcreole

    kingcreole Active Member

    And here's the bitch - the price of oil has dropped two days in a row, yet gas prices went up ($2.89 to $2.95 here).

    They sure don't mind raising gas prices when the price of oil goes up. But even a small drop in oil ... nothing at the pump.

    By the way, serious question here: Anyone know why the price of a quart of oil is about the same as it's always been? Oil changes? The price of oil changes at the local Midas haven't changed since I've moved here nearly three years ago.
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