Article

2008-07-15 Home Front Economy

Oil prices plunge more than $10 a barrel

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Posted by tu3031 2008-07-15 12:29|| || Front Page|| [4 views ] Top

#1 a number of people are predicting that the Chicoms will stop subsidizing gasoline consumption or, at least, drastically reduce it subsequent to the summer Olympics.

Posted by mhw">mhw 2008-07-15 13:34|| http://hypocrisy-incorporated.blogspot.com/]">[http://hypocrisy-incorporated.blogspot.com/] 2008-07-15 13:34|| Front Page Top

#2 no thanks to the incompetent pukes in the U.S. congress.

Posted by Broadhead6 2008-07-15 13:58|| 2008-07-15 13:58|| Front Page Top

#3 "Oil prices plunge more than $10 a barrel"

Expect Iran to photoshop another "missile test" to scare prices back up.

Posted by crosspatch 2008-07-15 14:01|| 2008-07-15 14:01|| Front Page Top

#4 The Oil price represents the future expectation of demand.

If it falls without dollar movement it means that traders are expecting oil demand to fall.

This basically means they are expecting people to be poorer.

Posted by Bright Pebbles 2008-07-15 14:15|| 2008-07-15 14:15|| Front Page Top

#5 US Public pressure to drill increases, President Bush says DRILL and backs it up with words and deeds: he removes the execute ban.

Prices drop $10 in a day.

Cause and effect.

OK all you who said drilling will have no short term impact, care to admit those of us who said the opposite were right? Care to read up on the marketplace, and how futures work, and how speculators exploited it with cheap money (margin)?

Futures are being driven by speculation and supply-demand of contracts, not supply-demand of oil.

That's a fundamental cause of this mess.

Increasing supply, even the threat of it, will drop prices since that removes one of the things they depend on- continued constrained supply in the face of rising demand.

The other parts needed are the remove the ability to trade futures on margins, and to restrict the market participants to those who either produce or consume the oil, or their direct agents.

Get a marketplace that will base the price on supply and demand of the commodity in question, not the supply and demand for contracts by speculators. Bring the market back to producers and consumers.

Posted by OldSpook 2008-07-15 15:24|| 2008-07-15 15:24|| Front Page Top

#6 Oil is being used in much the same role that gold has been in the past. The idea being that oil would maintain value in the face of dollar fluctuation. We have major financial institutions buying and storing large quantities of oil for use as a hedge against the dollar. Gold can't be used in that context anymore because the supply of it is too small. Purchasing a few hundred million dollars with of gold has a greater impact on market prices than a few hundred million dollars worth of oil does.

But it does cause some change and that change is amplified when thousands of individuals sitting on the sidelines suddenly jump into the market. The financial institutions are in it for the long term. The intend to take delivery and store the oil. The speculators simply want to turn a quick buck and be out of the contract before it expires. So the speculators are easily spooked out of the market if they believe prices will stabilize or if they believe OTHERS will believe prices will stabilize. It is a psychological game with the speculators.

If Iran launches another photoshop, it might send "supply jitters" into the market and lead speculators to believe the market will rise. This might cause them to flock back in and the market does indeed rise ... and the bet one makes is that one can get out of the market with a profit before it falls again.

But after Iran's last fisaco, this might not fly anymore.

Posted by crosspatch 2008-07-15 15:56|| 2008-07-15 15:56|| Front Page Top

#7 It came back. Down 16 cents.

Posted by tu3031 2008-07-15 15:57|| 2008-07-15 15:57|| Front Page Top

#8 The other parts needed are the remove the ability to trade futures on margins, and to restrict the market participants to those who either produce or consume the oil, or their direct agents.

It's a nice idea but the net effect of those moves would be to relocate lucrative futures trading to foreign markets where we exert no control. If the money's going to be made it might as well be made here.

Posted by AzCat 2008-07-15 17:30|| 2008-07-15 17:30|| Front Page Top

#9 Yeah, Queen Nancy Pelosi said that drilling would not have any effect before 10 years. This woman is incompetent and out of touch. She doesn't understand economics or markets. No wonder Washington limousine liberals are so eager to spend, spend and spend and regulate, regulate, and regulate.

Posted by JohnQC 2008-07-15 19:30|| 2008-07-15 19:30|| Front Page Top

#10 Yes, I am aware crude oil has recently fallen nearly $10. per barrel. I just wish it had not fallen so fast.

Posted by Obama 2008-07-15 21:18|| 2008-07-15 21:18|| Front Page Top

#11 President Bush says DRILL and backs it up with words and deeds: he removes the execute ban.

Prices drop $10 in a day.

Cause and effect.

I didn't read the link itself, but funny how the article doesn't even mention your point, isn't it?

Posted by Raj 2008-07-15 21:19|| 2008-07-15 21:19|| Front Page Top

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