"CRUDE" oil, an absolute must see program !!!

Like I bin sayin, It's all them iggorant college edjimicated boys in nappies playing around in markets where they don't know oil from ****, as long as they get their whopping phat commissions... & **** the rest of the world...

All of the futures market is a swindle to sucker the amateurs and screw anyone silly enough to think of playing... Insurance is exactly the same - legalised and formalised betting on outcomes - hedged to ensure they NEVER loose, even when they are caught cheating and fiddling the books...

 

There is a fundamental misunderstanding of market dynamics here. Oil is too important NOT to be traded freely and openly. Oil is priced largely correctly based on the fundamentals of supply and demand looking forward. In fact it has only just reached the price that is starting to trigger a decent exploration response from the non NOC majors. Why is it when the price moves higher we always want to restrict it and choke the capital flow to those that are best suited to solve the problem. Oil companies gross about 9%, not much when you consider the massive investment involved! our problem is we believe we are entitled to cheap energy... we'd rather scapegoat than face the facts, its getting harder to find hence we need to pay more and work harder to get it.

Charlie... CFD's are rarely hedged in the market, they are mostly off market "bets"... its like saying betting on a horse influences its ability to run. Futures can be used to influence price but commodities laws are in place to prevent this and the bodies that over see these markets know what to look for and will act if manipulative practices drive the price of oil higher. Believe me the US gov would squash any entity trying this like a bug in a second.

The other thing to keep in mind is that history shows the primary trend in any commodity or instrument always dominates. Any attempt to fight it always results in defeat, usually humiliating.

No folks this is real, even if you don't like it--- get wise and realise that energy is going to be more expensive until we make that next technological leap.

 

You really need to understand what's driving it in the short term vs the long term. It is a shark pit in many ways, that's the effect of leverage and the nature of the instrument, but in the mid to long run it can't make oil cheaper or dearer than it needs to be, in the very short term anything can happen but that goes for all markets and its a part of "price discovery".

 

Central Banks create inflation... end of story. Markets respond to inflation, don't mix the symptom up with the disease. All we ever seem to hear is meaningless jabber about the symptoms all the while nobody talks about the massive amounts of new money that CB's globally are pooring into our systems, the disease, all created from thin air. You cannot print wealth...but I can steal yours if you give me the keys to the money presses

 

Arrr **** Heinz, you just spoilt some really stupid debate, I was hoping for a bite, and instead got shot down without even a wimper... Ahhh well that is what happens when one pirates a thread... It has been moderately active in drivel and other dungeon areas -

 

Inflation = increase in money supply. i.e. The disease.
Rising prices (CPI = Consumer Price Index) i.e. The symptom.

Why we persist in labeling the symptom with the name of the disease I don't know. It leads to all sorts of misunderstandings, you know prices rise sometimes because for supply and demand issues and that is in no way inflationary.

And as for the damn nonsense that tax cuts are inflationary that we have had fed out here recently..... arrrgh! Who are these people saying these things and what have they done with their brains?

 

Oh... sorry. I woke up all grumpy and serious this morning... go ahead, don't mind me

 

You sleep in Heinz, or are you somewhere else? Have you seen this - I can't figure it out... it looks like 7 subs, just submerged & making waves? http://www.boatdesign.net/forums/showthread.php?p=192815#post192815

 

I reckon its whales, good source of oil and all...

Whats that screeching?

OK Joyce I was..... well no... now that you put it like that... it was a joke dear.

Gawd she is grumpier that I am.

 

In Singapore there is two prices in Loyang. Oil company prices and everybody else. I gasped at the quotation to refurb my liferaft, Oh sorry we thought you were with the oil company.

Cheaper oil may encourage them to spend more reasonsably.

Just about every one I know in Pattaya where I live (--sometimes ) is in oil,-- from top men to pushers to drillers. They ern more money than they can throw away. They talk of unbelievable wastage. One of my mates (navigator) has a contract that gives him a pay rise every month.

Its not like they have any competition is it, Oh lets by oil from Mars.

 

Beanz,

I respect your knowledge and your well reasoned conclusions. My point, though, which the Oxford article seems to support (The entire article is a long read, meant for serious readers, unlike mass media), is that there are flaws in the pricing of oil, so it is NOT priced correctly based on the fundamentals of supply and demand looking forward.

There is no question that rising demand and a lack of new "easy" fields means that the days of sub $20/bbl crude are long gone. The recent decline in the value of the USD is another factor contributing to higher prices. That factor alone will reduce the price somewhat when it turns around.

Speculation influences the price, however, and there are corporate economic players with the financial clout to manipulate markets to their advantage. Economic analysts far more qualified than I are recognizing this. Real and accurate information is scarce, for a variety of reasons, mostly related to the attempts of so many players who think that restricting information gives them an advantage. The net result is that the market is not pure, and simple supply and demand become only one of several factors affecting price.

 

With all due respect most academics are clueless when it comes to markets. How did they decide that the pricing is not correct? Based on the fundamentals? Or their estimate of future demand? Firstly the fundamental data in the oil market is notoriously obscure, the major industry players guess and the NOC's just plain lie. Really its not a judgement that any individual is placed to make, on that score alone they simply cannot be correct. Secondly who placed them in the position to estimate say China's future needs? They are building a strategic reserve at the moment because they want a buffer, how the heck can a economist factor those desires and wants into their models? Simple answer, they cannot... but the market can and does.

I find that academics generally don't like the market mechanisms because it is a chaotic process, and yes it entails speculation, forward looking speculation... that's what we need and rely upon as our best estimate of future need. Markets work... let them work, they are the best system we have ever had to distribute resources, far better than any central planning efforts we have tried.

I reject anything any economist has to say on the matter, by and large it is a dismally flawed science (in fact its not a science at all!) and most of its practitioners will say exactly what their employer wants to hear, they are the biggest tarts in the financial world by and large. The very basis of theoretical economic views of the oil markets fails at the first hurdle. They are all brought up on the idea of upwardly sloping supply curves, that concept is fatally flawed when you start to examine the way that a finite resource like oil trades when in decline. Their whole model is predicated on the false fact that higher price will always bring forward greater supply. This is to simplistic and in fact given the structure of our current market, perversely, higher price can actually lead to restricted supply. Note that OPEC are talking about defending higher and higher prices, they will not let it go much below $90 at the moment.

The oil market is big, manipulation is a fantasy in a big market...

No market is pure, price is set against supply and demand of two factors. The commodity and the currency in which the commodity is traded. That gives you four points at which the price can be influenced all of which are themselves influenced by emotion and flawed judgement. That's the human experience, you cannot definitively say any price is for anything is right or wrong at any given moment but it is a level at which we are prepared to deal. Mess with that emotion and you will end up with glut or shortage.

In the oil market 3% over supply is a glut, 3% under is a disaster. This market functions fantastically to stay with in those bounds and keep the fuel flowing. To suggest that the price is abnormally high due to manipulation is just mad, if it where opportunistic sellers would be solving that issue very quickly and we would likely see glut.

The biggest short term factor here is the systematic trashing of the US dollar, fuel prices in most parts of the world are far more stable because most currencies are doing well against the US dollar.

Imagine a world without speculator's, people prepared to put their money where their mouth is because they believe in and understand what is coming. They only get rewarded when they are right and they encourage new supply of whatever it is we are dealing in. If they go to far they lose their money and we all get to benefit from the increased supply which they bring forth. Speculation is the forward looking element of the market and one of the reasons that it is the best anticipatory mechanism we have developed. At the moment the market is more anticipating the continued destruction of the USD than anything else, yes supply is tight but the oil is still flowing. You want to blame someone then blame the biggest single manipulator of any element in this equation the US Federal Reserve.

How is it to the advantage of any "corporate economic player" to over pay for a commodity? Remember they must sell their positions in order to profit there fore they must have broad market support else who would they sell to?

Scapegoating and politics ! We just need to take the price signal, the very real price signal, stop griping about the message and get on with finding a solution.

 

Oil price fluctuation is not caused by speculation??

Well the Saudi oil minister must be wrong then.

When I put a price on my house ,boat,car it doesnt change unless I change it.

If you watch Bloomberg you can see the price of oil changing every minute up and down. This is why? The oil flows faster out of the ground sometimes. OR that people that have no intention what so ever of ever owning 10 million barrells of oil are buying and selling it every second ?

If I go and buy a kilo of potatos, I need to buy from the farmer if I can.

If I cant, I don't want every one around to have bought and sold them and all made a bit on them first, and I end up paying the most.

 

Well Frosty, speculate on this, your boat will run happily on coconut oil just pass it through that spare water heater pre-set to 70 deg Celcius for coconut oil only... Perfect...

 

Mass if you realy know about this stuff then I suggest you open a thread . I would be very interested.