U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-15-2009, 11:12 AM
 
Location: Londonderry, NH
41,478 posts, read 52,773,149 times
Reputation: 24677

Advertisements

Are you trying to tell me that markets are like a school of herring trying to avoid losses until they bunch up so much a baleen whale comes along and swallows the entire shoal. I think, as far as the market is concerned, the whales were doing the bunching just like in the ocean.
Reply With Quote Quick reply to this message

 
Old 01-15-2009, 12:13 PM
 
Location: Visitation between Wal-Mart & Home Depot
8,308 posts, read 35,220,010 times
Reputation: 7116
Quote:
Originally Posted by GregW View Post
Are you trying to tell me that markets are like a school of herring trying to avoid losses until they bunch up so much a baleen whale comes along and swallows the entire shoal. I think, as far as the market is concerned, the whales were doing the bunching just like in the ocean.
I think you just convinced me...
Reply With Quote Quick reply to this message
 
Old 01-15-2009, 06:13 PM
 
59 posts, read 77,474 times
Reputation: 22
Quote:
Originally Posted by thebigr View Post
I said Congress investigating not the CFTC, was when prices started to decline soon after. Do you believe it was supply and demand for the rapid rise in crude prices in 08?
Congress relied on the CFTC to do the investigation!

I do believe it was supply and demand that caused the the rise and fall of crude prices last year. Speculation can certainly affect the price in the short term (less than a month) and increase volatility but it cannot inflate the price in the futures markets for longer periods of time because there is a WTI contract that expires every month. Unfortunately most people making these accusations don't fully understand the oil industry and the futures markets. If someone has proof that speculation caused the runup to $147, I'm more than willing to listen. However, so far just about all of the evidence points the other way.
Reply With Quote Quick reply to this message
 
Old 01-15-2009, 11:21 PM
 
Location: NW MT
1,436 posts, read 2,980,952 times
Reputation: 548
Quote:
Originally Posted by KevinM782 View Post
If someone has proof that speculation caused the runup to $147, I'm more than willing to listen. However, so far just about all of the evidence points the other way.
Are you kidding me ???? CBS just showed you the data and the people to back it up !

Demand was decreasing, supply was increasing, oil prices climbing for a year and peaking at the lowest demand and highest supply levels ! And you think that was priced accordingly to supply and demand ??? Alrighty then...
Reply With Quote Quick reply to this message
 
Old 01-15-2009, 11:52 PM
 
Location: WA
5,471 posts, read 21,898,832 times
Reputation: 6157
Quote:
Originally Posted by Stephan_K View Post
Are you kidding me ???? CBS just showed you the data and the people to back it up !
...
Yes, those were the same people that destroyed AUDI US sales with the ‘unintended acceleration’ claims that were proven false. They lost all credibility with me and the little I saw of their oil manipulation report shows that they left out most of the facts and selected interviews to create drama for ratings. Look elsewhere for the full truth.
Reply With Quote Quick reply to this message
 
Old 01-16-2009, 05:48 PM
 
59 posts, read 77,474 times
Reputation: 22
Quote:
Originally Posted by Stephan_K View Post
Are you kidding me ???? CBS just showed you the data and the people to back it up !

Demand was decreasing, supply was increasing, oil prices climbing for a year and peaking at the lowest demand and highest supply levels ! And you think that was priced accordingly to supply and demand ??? Alrighty then...
You have to realize that CBS is not in the business of telling the truth. They are in the business of getting as many people to watch their shows as possible. The best way to do that is to report on something that will make people angry, like oil. The story completely ignores some facts and distorts many others.

For example, they talk about the price of oil going up $25 in one day. Sept. 22 was the day the October contract expired. It went up because too many people were speculating with short positions (betting the price of oil would go down). They got stuck and pushed the price up when they were forced to cover their positions in order to avoid making delivery. This is a perfect example of why the speculators can't keep the price artificially high. If there were too many long speculators pushing the price up last year you would have seen the price drop by a large amount right before expiration. I checked every expiration in the first half of last year and this did not happen. The settlement price at expiration is the price with no speculation because everyone involved is either delivering or taking delivery of oil. If there is a contract expiring every month, how could the rise in price be due to speculation???

CBS also ignores the fact that demand growth was far outpacing supply growth and had been for a while. This also was reducing OPEC's spare capacity to historically low levels. All of this adds up to more expensive oil. The problem with oil is that it is what is known as an inelastic good. Small changes in the quantity demanded and supplied have a big effect on the price. Just think about how high the price of gasoline had to go before Americans really started cutting back.
Reply With Quote Quick reply to this message
 
Old 01-17-2009, 06:58 AM
 
Location: Fort Myers Fl
2,305 posts, read 2,749,372 times
Reputation: 917
Quote:
Originally Posted by KevinM782 View Post
You have to realize that CBS is not in the business of telling the truth. They are in the business of getting as many people to watch their shows as possible. The best way to do that is to report on something that will make people angry, like oil. The story completely ignores some facts and distorts many others.

For example, they talk about the price of oil going up $25 in one day. Sept. 22 was the day the October contract expired. It went up because too many people were speculating with short positions (betting the price of oil would go down). They got stuck and pushed the price up when they were forced to cover their positions in order to avoid making delivery. This is a perfect example of why the speculators can't keep the price artificially high. If there were too many long speculators pushing the price up last year you would have seen the price drop by a large amount right before expiration. I checked every expiration in the first half of last year and this did not happen. The settlement price at expiration is the price with no speculation because everyone involved is either delivering or taking delivery of oil. If there is a contract expiring every month, how could the rise in price be due to speculation???

CBS also ignores the fact that demand growth was far outpacing supply growth and had been for a while. This also was reducing OPEC's spare capacity to historically low levels. All of this adds up to more expensive oil. The problem with oil is that it is what is known as an inelastic good. Small changes in the quantity demanded and supplied have a big effect on the price. Just think about how high the price of gasoline had to go before Americans really started cutting back.

So what your saying is on Sept. 22 speculators had to short there positions so they would not have to take delivery of actual crude oil causing the price to jump $25.

Correct me if I am wrong but that does not sound like supply and demand, it sounds like speculation.
Reply With Quote Quick reply to this message
 
Old 01-17-2009, 09:16 AM
 
59 posts, read 77,474 times
Reputation: 22
Quote:
Originally Posted by thebigr View Post
So what your saying is on Sept. 22 speculators had to short there positions so they would not have to take delivery of actual crude oil causing the price to jump $25.

Correct me if I am wrong but that does not sound like supply and demand, it sounds like speculation.
No, the speculators were already short. (There were too many people betting on the price of oil falling.) They had to buy futures contracts to avoid having to make delivery of oil. This bid the price up $25. My point is that the price at expiration is the price without any speculation because all of the speculators, both long and short have exited the market. After this happened on Sept. 22 the settlement price was about $121. If speculators had been unfairly bidding up the price when oil was rising, we would have seen the opposite of Sept. 22, a huge plunge in the front month contract in the days before expiration. That didn't happen.
Reply With Quote Quick reply to this message
 
Old 01-17-2009, 09:29 AM
 
Location: Ocean Shores, WA
5,081 posts, read 13,274,480 times
Reputation: 10709
The price of oil, and most everything else, depends mostly on GREED and STUPIDITY.
Reply With Quote Quick reply to this message
 
Old 01-17-2009, 05:20 PM
 
Location: NW MT
1,436 posts, read 2,980,952 times
Reputation: 548
Quote:
Originally Posted by Fat Freddy View Post
The price of oil, and most everything else, depends mostly on GREED and STUPIDITY.
And this is so hard for people to understand why ?????
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top