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Yippee — Oil tops $138

Discussion in 'Sports and News' started by JayFarrar, Jun 6, 2008.

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  1. dreunc1542

    dreunc1542 Active Member

    I talked to one guy who runs a gas station and he's seriously considering stopping the sale of gas at his station because he ends up losing money, especially with so many people using credit cards to pay.
     
  2. Smash Williams

    Smash Williams Well-Known Member

    But that gallon of gas the station buys nest week was produced at a lower price. The cost of that barrel has nothing to do with the price on the futures market. It has everything to do with the price of the market six or seven months ago (or whenever the oil company locked in the prices on its current contract).

    The credit card fees thing I get.
     
  3. dixiehack

    dixiehack Well-Known Member

    That $4 Coke at the ball game was produced at a lower price too. Doesn't stop them from taking advantage of supply and demand, and it doesn't stop the people up the line from the service station owner (and that's a lonnnnnnnng line) from doing the same thing.
     
  4. Smash Williams

    Smash Williams Well-Known Member

    Dixie - to be clear, I'm not blaming the service station owners for artificially inflating the prices. I'm blaming the people further up the line for raising the prices when the higher costs aren't in play yet. That's why when oil companies cry "supply and demand!" I roll my eyes. Increased demand is raising the price on the futures market, not on the oil they've already promised to buy at a certain price.
     
  5. The Big Ragu

    The Big Ragu Moderator Staff Member

    Smash, The oil price you read about at the end of the day is a spot price. It's how much a barrel of crude is costing on the market today.

    But when the futures price rises, the spot price has to rise. There's a phenomenon called contango. A futures price has to take into account all kinds of costs the spot price doesn't: things like the interest payments you are not collecting in order to keep your money tied up, the cost of warehousing the oil, etc. Those extra costs are the only differences there should be between the future price and the spot price. Otherwise, arbitragers can buy or sell the future price and sell or buy the current price and make a guaranteed profit if there is a disparity.

    This arbitrage opportunity always creates rational pricing in the market.

    If the futures price increases due to anything--for example, due to political instability in Nigeria--as a result, the spot price increases to create rational pricing. When the future price goes up based on the fear, arbitragers jump into the market and sell the future price and buy the spot price to make that guaranteed profit. And that drags the spot price up so it is in line with the future price--with just contango and no other price difference factored in.

    This kind of rational pricing makes it way all through the market, which is why the price at the gas station goes up. The price goes up immediately based on the arbitrage opportunity for people in the refined oil business. They already know the future price is going to rise, so it creates an opportunity for them to exploit. But when they start buying already refined gas today to try to make a guaranteed profit on the difference between it and the higher price they know it will be in the future, they have the effect of driving up the current price.

    Supply and demand. Just like everything. Supply has stayed the same. Demand has increased. So prices go up.
     
  6. I demand lower prices.
     
  7. Armchair_QB

    Armchair_QB Well-Known Member

    As long as you understand that whoever you vote for is a goddamn liar. There's no way any president can do that.
     
  8. Some Guy

    Some Guy Active Member

    I was hoping there was some sort of magic wand he could wave, or something.
     
  9. zagoshe

    zagoshe Well-Known Member

    Whine, whine, whine --scare tactic, scare tactic, scare tactic, fear monger, fear monger fear monger -- that's all you got -- that's it -- and frankly you are beginning to bore the hell out of me.

    There is nothing new about any of the bullshit you are trying to shovel in here -- "Without government our world would collapse. Without the government taking its "fair share" we would have no roads, no schools, no bridges ---- and you would be paying to use highways then what?"

    What if we privatized highway operations and maintenence? Who knows, oh wait, I know, perhaps a 1/2 hour commute wouldn't take three hours because half the fucking road is blocked off so a bunch of government-funded union workers can stand behind orange cones and lean on their shovels.......(not too mention the fact that under your way, the roads are still full of pot-holes and bridges still collapes anyway, so why not give it a try? It can't be worse....)

    Again, all of your nonsensical liberal whining every time someone even suggests cutting the budget is so, so, 1960's and 1970's it is really quite sad. You probably need to check with your government before you post here, because you obviously believe you can't function without it.

    I'll issue the same challenge to you as I have to other mushhead liberal whiners (none of whom have taken me up on it, by the way) -- starting tomorrow, keep track of every penny you pay in taxes -- be it sales tax, gas tax, sales tax on gas, utilities taxes, income taxes, SSI, medicare taxes, inheritance taxes -- every single dime -- and at the end of the year, see if you are still convinced that the government couldn't do with a little -- or a lot -- less.

    Until such time, STFU.

    Or continue on your ridiculous course -- and have Hillary's No. 1 Kool Aid drinker on these threads, a man who is still trying to find some way she can win, cheerleading for you -- of issuing "smackdowns" that amount to little more than typical liberal whining and fear-mongering that, if big daddy government has to do with a little less, our whole lives will collapse around us.

    Of course, I'm sure before you respond, you'll need to consult your local government agency to figure out what to say.......
     
  10. jgmacg

    jgmacg Guest

    Sorry, zag, but the subject of the thread is the runaway price of gasoline. You seem to think that the 47 cents taken by the government is somehow more meaningful to the average American pocketbook than the other $3.53 a gallon most of us are paying. Which, again, merely makes the case that you're an obsessive, a one-note loudmouth, and something of an idiot.

    Are taxes too high? Sure. Always have been. Is government inefficient? Sure. Always has been. And having made that point 3,982 posts ago, you and Harry Browne haven't said a fucking thing since.

    Stop blaming the government for the fact that you've never figured out how to earn a better living. And try unballing your fists before you type - maybe you'll win an argument here one day.
     
  11. zagoshe

    zagoshe Well-Known Member

    No, whiner, what I am saying is that the government CAN do something about the price of gas without any magic wands and without blaming the great liberal boogey man known as "big oil", who takes 3.5 times less profit than big government.

    And your silly personal attacks about my income level -- which you have no fucking clue -- and calling me an idiot proves you have nothing but a bunch of 1960's big-goverment bullshit marching orders and party lines to bring to the table.

    But I know, I know -- if the government does with less we won't have roads to drive on and bridges will collapse and anyone who says some of our economic problems are due to an out-of-control government that wastes more than it actually spends is a Harry Browne clone living a libertarian pipe dream.

    I mean -- are you actually saying that if the government came out tomorrow and announced it was making gas prices 20 cents cheaper per gallon by taking less -- the American public would say "no, keep it...."

    What a douche you are.

    Do better, please.
     
  12. jgmacg

    jgmacg Guest

    Zag, sorry, but since you seem incapable of reading what anyone actually posts here - instead of parroting the script you and Harry Browne having running on a loop in your resentful heads - every post you make is a personal attack. Hence your several banishments and your reputation here as a velvet brain in an iron glove. Again, why not try to harness your persistent bitterness in service of something positive? Or do you simply enjoy pissing the rest of us off with your ill-founded non sequiturs and assertions of wised-up Libertarian superiority? Perhaps I'd have a rosier view of our interactions if you didn't persist in attributing to me things I've never said. For the sixth time, I've agreed that government is wasteful and that our tax money could be better spent. You seem to keep missing that as it races past.

    In any case, I'd be more inclined to believe your moral and ethical stand against usurious taxation if you were posting from a federal prison, having been sent up the river for refusing to pay your taxes. Yet you seem to be free, so you must be as big a sucker as the rest of us.

    So let me get this straight, the government you so loathe is now supposed to intervene by eliminating taxes in order to serve the short term benefit of consumers?

    And having done so, when the price of gasoline continues to rise, and rise again - past the point at which you lifted the tax in the first place - what then?
     
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