oil hits two year high

[mwalsh]

Currently the price is a reflection of the uncertainties rather than actual oil shortage. So, if the Libya/Bahrain etc issues get resolved, the price may ease back. If the Libyan unrest becomes a civil war (or the unrest spends to other countries) price will claimb. Interesting days for an oil trader.

It has always stuck in my craw that gas prices at the pump go up on fuel that is already in local gas station tanks - oil that was purchased and refined months ago, when the price of options on oil being purchased today is for delivery at least 4 weeks away. Now maybe it's because I don't quite understand the way it works, but it still has always stunk to me. :twisted:

That's aside from the fact that I've never believed Wall Street types should be able to bid on commodities futures of any type when they have absolutely no interest or desire in taking delivery of what they're bidding up. :twisted:

 

[sproqitman]

It has always stuck in my craw that gas prices at the pump go up on fuel that is already in local gas station tanks - oil that was purchased and refined months ago, when the price of options on oil being purchased today is for delivery at least 4 weeks away. Now maybe it's because I don't quite understand the way it works, but it still has always stunk to me.

Gas stations operate on razor-thin margins. They typically make more profit on hot dogs and soda than they do on gasoline. So they raise prices early when prices are rising to have enough cash to buy the next tankerful of gasoline. Similarly, they drop prices late when prices are falling to try and recover some of their losses (when prices are high, people buy less gas (and hot dogs and soda)).

Refiners, on the other hand, have the storage capacity to buy oil when it's cheap and refine when it's more profitable (up to a point).

There's smarter people over on The Oil Drum http://www.theoildrum.com/ that can tell you more than you really want to know about the oil industry.

 

[AndyH]

That's aside from the fact that I've never believed Wall Street types should be able to bid on commodities futures of any type when they have absolutely no interest or desire in taking delivery of what they're bidding up. :twisted:

I used to see it that way. I now know a couple of longer-term investors and some short term traders (and have recently started trading the foreign exchange market) and can say that one can make money when a stock or commodity rises, falls, or moves sideways. Most traders follow the trend, they don't make it. Only the very largest funds or organizations have the buying power to move a stock or commodity price, and they have legal limits on how much and how often they can buy or sell.

The price moves are a combination of fundamentals (supply/demand, company strength/weakness, etc.) and mob psychology. Traders are in the business of analyzing what's happening, not wagging the dog.

 

[TRONZ]

The problem with business is that "business is business"! Business is NOT social responsibility, honesty, integrity or accountability. Business is the bottom line $! Pure and simple. Love it or hate it.

 

[hodad66]

The problem with business is that "business is business"! Business is NOT social responsibility, honesty, integrity or accountability. Business is the bottom line $! Pure and simple. Love it or hate it.

That's obviously why SCOTUS gave corporations the right
to vote with unlimited dollars. No morals, no national pride
simply greed as they crush the "working class" in their constant
quest for higher profits. After all, they need all that money to
pay their fantastic CEO's. :shock:

 

[mwalsh]

Love it or hate it.

I choose hate it.

 

[AndyH]

The problem with business is that "business is business"! Business is NOT social responsibility, honesty, integrity or accountability. Business is the bottom line $! Pure and simple. Love it or hate it.

That's obviously why SCOTUS gave corporations the right
to vote with unlimited dollars. No morals, no national pride
simply greed as they crush the "working class" in their constant
quest for higher profits. After all, they need all that money to
pay their fantastic CEO's. :shock:

Business CAN be socially responsible, honest, have integrity and accountability - and some are. Many/most aren't.

A question, though -- how many of you/us are self-employed, or work for a city/state/federal government? For those that are left - have you ever worked for a business run by someone poor or middle class? Have you ever left a business - quit- because the company didn't meet your honesty/integrity/responsibility goals/needs/desires?

Maybe a poll, evnow? Where do we work?

 

[AndyH]

First indication that price may be coming down soon. Don't blame this 'speculator' newsletter. They're not gearing up to increase prices - they're positioning to profit as the price drops.

The Energy Select Sector SPDR Fund (Ticker: XLE) has been in a well-defined
upward trend but prices have gotten a little overbought on the charts.

http://www.themarketguys.com/

 

[bowthom]

I think it's time "we" put restrictions on charging for the mere movement of money. It adds to the cost of everything and serves no useful purpose. Speed traders, hedge funds etc. Stuff like the county not setting up their own internet billing / payment system. We (taxpayers) pay for employees to handle our paper checks, banks have employees to handle them too all within the system. But, use bill-pay or some other means to pay your taxes for example, results in a 2.5% fee added because of their use of a third party. This third party vendor makes 500 million dollars in the 3 weeks of november processing Mult Co property tax payments. All done instantaneously by a machine. Speed traders just got another new server building close to wall street so their computers can be faster than the competition to make even more money on the movement of money. Buying and selling huge amounts of stock following trends. We have no chance to compete and it makes everything we buy just that much more expensive. This practice removes billions of dollars from the normal flow of money transactions and is a huge parasite to an already sluggish economy.

 

[AndyH]

What A Coin Toss Has To Do With The Housing Market
http://www.npr.org/blogs/money/2011...a-coin-toss-has-to-do-with-the-housing-market

Heard a great piece on 'All Things Considered' this afternoon. It's technically a look at why the recovery from the housing bubble is going as slowly as it is. But as someone that transitioned from government service to entrepreneur (and has the white hair to prove it!), I can confirm that the 'coin toss game' applies to much more than just the housing market.

Fire can burn down our house but we choose to learn the risks, manage them, and continue to use fire. Same for investing and trading. When we don't know how to manage the risk, all we have is fear - and that fear causes us to want to remove or regulate the perceived evil influence. Learning to manage the risk lets us use fire, lets us drive, and can let us invest.

Enjoy!

 

[edatoakrun]

Back on-topic, by going to this link:

http://online.wsj.com/mdc/public/page/mdc_commodities.html?refresh=on

You can use the interactive chart (sorry, I can't get the chart to post) to compare oil and natural gas prices.

Over the last 2 years, natural gas (electricity feedstock) prices have declined almost 40%, while oil prices (gasoline feedstock) have increased over 80%.

Highest price gas I saw in Redding CA was $3.99.9 yesterday.

But Gasoline futures were up another 9 cents just this morning...

 

[TRONZ]

$4.05 for premium down at the corner. At a stoplight, was watching an employee changing the Chevron prices again at 10am. Why would he be changing prices in the middle of the day??? I would bet NOT to lower them!

BTW - The metaphore of playing with fire is a good one. However, does very little to protect the people that choose to NOT play with fire from getting burned. Starting with Reagan then Bush and Bush, the wealthy discovered that playing with fire is much better by borrowing the money in the name of the people (those that will get burned). Since we the people are responsible for paying it all back there is little downside for the wealthy and their collection of torches. Stoke up the fire and say you got it all figured out this time, eh .

 

[AndyH]

$4.05 for premium down at the corner. At a stoplight, was watching an employee changing the Chevron prices again at 10am. Why would he be changing prices in the middle of the day??? I would bet NOT to lower them!

BTW - The metaphore of playing with fire is a good one. However, does very little to protect the people that choose to NOT play with fire from getting burned. Starting with Reagan then Bush and Bush, the wealthy discovered that playing with fire is much better by borrowing the money in the name of the people (those that will get burned). Since we the people are responsible for paying it all back there is little downside for the wealthy and their collection of torches. Stoke up the fire and say you got it all figured out this time, eh .

Maybe in another thread...I'd like to understand what you're saying about the 'non players' but I don't. Help!

http://gasbuddy.com/
http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=24

http://www.GasBuddy.com/gb_retail_p...alifornia&city3=Texas&crude=y&tme=24&units=us

 

[TRONZ]

@AndyH, I was reading your "fire" metaphor as "Wall Street/Pure Capitalism/Players". I, like many, do not believe that EVERYTHING in the world should be for profit, part of a trade and unregulated. EX; I do not care to put a price on the love I feel for my children. True Idealism, Spirituality, etc are not for sale. That makes me and others "Non-Players". Unfortunately, we have all learned that everyone is at risk when greedy people play with "fire". The modern Corporate business model seems to be; Profit - At All Costs (to others). I think you would probably agree.

 

[AndyH]

@AndyH, I was reading your "fire" metaphor as "Wall Street/Pure Capitalism/Players". I, like many, do not believe that EVERYTHING in the world should be for profit, part of a trade and unregulated. EX; I do not care to put a price on the love I feel for my children. True Idealism, Spirituality, etc are not for sale. That makes me and others "Non-Players". Unfortunately, we have all learned that everyone is at risk when greedy people play with "fire". The modern Corporate business model seems to be; Profit - At All Costs (to others). I think you would probably agree.

Thanks - I agree completely.

My personal focus and intent for the fire metaphor isn't pointed at Wall Street as much as it's pointed at us. Business and markets in their various forms are vehicles - tools - not inherently good or bad. I don't expect I have a chance to bend the IRS to my desires, but I'm finding that the same rules that give corporations tax benefits can work for me - same for markets. I enjoy target shooting but not hunting - and I enjoy learning about and practicing business and investing with no desire to emulate Gordon Gekko or the Koch bro's.

I'm enjoying learning, but also enjoying teaching my 8-year old that he has the power and ability to use the system to get what he wants in life. It's a much better use of energy - creating rather than wasting it on fearing the IRS or hating business. But none of this means I'm going to stop writing to congress-critters or supporting UCS or the Sierra Club, either. :lol:

Thanks Tronz! And others - thanks for your patience.

I'll bet the 'coin toss' piece on our discomfort with selling in a down market is a factor in keeping oil prices higher longer than it might if all the trading was done by computer.

 

[occ]

The problem with business is that "business is business"! Business is NOT social responsibility, honesty, integrity or accountability. Business is the bottom line $! Pure and simple. Love it or hate it.

Sorry to digress again...

Have you seen the documentary on Mondragon Experiment?

http://hir.harvard.edu/the-mondragon-experiment

http://video.google.com/videoplay?docid=7565584850785786404#

 

[TRONZ]

It would be a VAST stretch to describe Mondragon as a typical corporation. The first paragraph of the Harvard Article essentially states my viewpoint clearly and then develops it as an example of how a Corporation SHOULD function (Thank You Mondragon!). A couple relevant points taken from your article are below;

"One reason for Mondragon’s freedom of operation compared to conventional corporations is that it does not rely on stock markets for capital."

"Mondragon contrasts radically with the majority of large global business corporations."

I think we should compare typical corporations to typical corporations and not hold up a radically a-typical Corporation to let all the others off the hook. AND if you look at the Title above, this thread is about Oil Corporations .

 

[DaveinOlyWA]

last 3 gas purchases

2/10 $3.159
2/23 $3.299
3/3 $3.479

its getting there

 

[occ]

It would be a VAST stretch to describe Mondragon as a typical corporation. The first paragraph of the Harvard Article essentially states my viewpoint clearly and then develops it as an example of how a Corporation SHOULD function (Thank You Mondragon!).

EXACTLY.

But I didn't want to discourage anyone from clicking the links...to see for themselves how American corporation is not the only nor the best way (far from it) to achieve a capitalistic yet equitable society. Mondragon is not new. IMHO, I believe we currently have a capitalistic but very unfair society.


....now back to our regular programming...

 

[AndyH]

These things are tools - corporations, markets, IRAs, 401Ks, cars, trains, boats. They're vehicles designed for a particular type of movement. We can fill each with nuns or criminals.

Are corporations the problem? Or is it the crooks that use a corporation to steal that we should avoid?

---
Gas prices range from 3.19 to 3.49 in S.A. this morning. Diesel's ranging from 3.55 to 3.99. I'm glad the 6 gallons of diesel in the tank will last into April - maybe prices will come down a bit by then.

If it stays up, it might be time to dust off the biodiesel supplies. Or - wait! - drive a Leaf! :lol: