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Old 01-13-2009, 02:20 PM
 
Location: NW MT
1,436 posts, read 2,981,849 times
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He who thinks oil prices are determined by supply and demand is a fool !

Did Speculation Fuel Oil Price Swings?, 60 Minutes: Speculation Affected Oil Price Swings More Than Supply And Demand - CBS News

Housing bubble... Energy bubble... where's the next bubble people ?
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Old 01-13-2009, 02:30 PM
 
Location: Fort Myers Fl
2,305 posts, read 2,750,396 times
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It was obvious the price of oil was not supply & demand over last summer. Once congress started investigating the price spike it seemed to start going down. Just another reason I am slowly downsizing my trucking company and spending more time with trading. After paying the high prices for diesel I realized the market is a much more profitable buisness. Plus I enjoy it and I will no longer have employees. "A one man operation"
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Old 01-13-2009, 02:30 PM
 
Location: WA
5,471 posts, read 21,902,211 times
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60M may have leaned a little too far towards a conspiracy that does not really exist.

Oil price varies because of 1) the value of the dollar changes, 2) trades on the open market that do include a lot of speculation, hedging, fear premium, etc., and 3) the actual supply and demand.

Like any commodity the price can be moved by large scale manipulation but it usually will revert to a normal range.
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Old 01-13-2009, 02:45 PM
 
Location: NW MT
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Quote:
Originally Posted by cdelena View Post
60M may have leaned a little too far towards a conspiracy that does not really exist.
I highly doubt it. All along MANY people were screaming how oil prices are a product of supply and demand and the value of the dollar and to get over it when someone suggested differently. Well, I never agreed with that and still don't !

Manipulation will ALWAYS play a roll in oil pricing, some minimal and unnoticed at times, some major and still unnoticed and some noticeable. I don't think it can be stopped no matter what regulations and monitoring is put in place.
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Old 01-13-2009, 02:49 PM
 
4,172 posts, read 6,103,833 times
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Quote:
Originally Posted by cdelena View Post
60M may have leaned a little too far towards a conspiracy that does not really exist.

Oil price varies because of 1) the value of the dollar changes, 2) trades on the open market that do include a lot of speculation, hedging, fear premium, etc., and 3) the actual supply and demand.

Like any commodity the price can be moved by large scale manipulation but it usually will revert to a normal range.
Agree, although I would also add OPEC's willingness to cut production and middle-east wars to the list.
Contrary to 60min's belief, item (2) above is a shorter term phenomenon since longer term, item (3) is probably the biggest influence. Recently, when the global demand dropped, the manipulators lost money and could not influence the market significantly.
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Old 01-13-2009, 04:19 PM
 
Location: NW MT
1,436 posts, read 2,981,849 times
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Quote:
Originally Posted by calmdude View Post
Recently, when the global demand dropped, the manipulators lost money and could not influence the market significantly.
Ah, according to the data CBS new collected, recently the demand dropped, the supply peaked... and so did the price of oil ! Supply and demand had absolutely nothing to do with it !

I hardly think CBS would falsify data and have it verified by those they interviewed confirming it. And lets not forget how much influence OPEC had on the price of oil when it fell off the cliff a few weeks ago... the whole time they were announcing production cuts, price kept falling ! And it's still in the basement.
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Old 01-13-2009, 04:24 PM
 
4,172 posts, read 6,103,833 times
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Quote:
Originally Posted by Stephan_K View Post
Ah, according to the data CBS new collected, recently the demand dropped, the supply peaked... and so did the price of oil ! Supply and demand had absolutely nothing to do with it !

I hardly think CBS would falsify data and have it verified by those they interviewed confirming it. And lets not forget how much influence OPEC had on the price of oil when it fell off the cliff a few weeks ago... the whole time they were announcing production cuts, price kept falling ! And it's still in the basement.
I was implying that in the longer run - years and not months, the world supply-demand influences the prices much more than other factors which are more shortlived.

Edit: the difference between S and D is very important. When the differential is tight, market reacts more violently since the world (near to its peak production a few months ago) did not have the ability to simply increase production quickly. Actually, 60min did another story this year on the construction of a production processing facility in Saudi and the amount of time and effort involved. Right now, the S is more than D, so prices are low.
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Old 01-13-2009, 04:26 PM
 
13,025 posts, read 19,219,878 times
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Quote:
Originally Posted by Stephan_K View Post
Ah, according to the data CBS new collected, recently the demand dropped, the supply peaked... and so did the price of oil ! Supply and demand had absolutely nothing to do with it !

I hardly think CBS would falsify data and have it verified by those they interviewed confirming it. And lets not forget how much influence OPEC had on the price of oil when it fell off the cliff a few weeks ago... the whole time they were announcing production cuts, price kept falling ! And it's still in the basement.

No CBS would never falsify data *cough cough* Rathergate *cough cough*

Now speculation DID have a huge impact on oil prices, but that itself is also driven by supply and demand, or rather the speculation of supply and demand. There is no conspiracy on oil prices, it's all market driven. But it's your own defintion of what is "market driven". It all comes down to what investors, OPEC, etc THINK will be the future supply vs. the future demand.

And the comment of "well congress was doing investigation on oil prices and that caused oil to come down" is about as laughable as trusting CBS as an unquestionable news source.
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Old 01-13-2009, 04:31 PM
 
268 posts, read 374,190 times
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gee we let in an administration who is in bed with the oil companies and oil prices go through the roof, who would have thunk it

And I wonder what was said at those secret meetings with Cheney and the Oil companies, I am sure they talked about how we can become more energy and efficient how they can make energy and oil cheaper for all Americans, after all that is what a public servant is supposed to do, I doubt they were worrying about their profits and the profits of the people on wall street, that would be an unamerican thing to do
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Old 01-13-2009, 05:49 PM
 
13,025 posts, read 19,219,878 times
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Quote:
Originally Posted by lostdestroyedlife View Post
gee we let in an administration who is in bed with the oil companies and oil prices go through the roof, who would have thunk it

And I wonder what was said at those secret meetings with Cheney and the Oil companies, I am sure they talked about how we can become more energy and efficient how they can make energy and oil cheaper for all Americans, after all that is what a public servant is supposed to do, I doubt they were worrying about their profits and the profits of the people on wall street, that would be an unamerican thing to do
Let me guess, you usually post in the political forums don't you? I suggest you return to it. You will find more rabid partisan fans that won't challenge you for facts.

The Washington Post story on the "secret meetings": “Though the report was roundly criticized by environmental groups at the time, some energy experts say that in retrospect it appears better balanced than the administration’s actual policy,” reported the Post. Cheney’s report “correctly forecast higher energy prices, stressed energy efficiency and conservation, and pushed for boosting domestic conventional energy supplies and increasing use of renewable energy. Although it advocated wider drilling and omitted climate-change measures, it also said that ‘using energy more wisely’ was the nation's ‘first challenge.’ "
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