Gas prices manipulated by BIG OIL

[Fountainhead]

http://www.insidebayarea.com/trivalleyherald/ci_5807588

We are told that gas prices have skyrocketed because of "refinery problems". We are told that there is a "supply problem" with gasoline. Really ?

I have a simple question for everyone.

Have you had any difficulty filling your tank ? Are you sitting in gas-lines ? Have you been turned-away from your local gas station ? Do you see signs at your local station reading: OUT OF GAS ?

What supply problem ?

Please PROVE that there is a "supply problem". I hear a really slick PR presentation from BIG OIL ... but no PROOF of a reason for higher prices.

Have the higher prices reduced consumption of gasoline ? Are YOU driving less ? Are "other people" driving less ? There is NO EVIDENCE of less consumption during my morning commute ... or any other time that I drive my local roads. Supply and Demand have not changed in any significant way.

Wake-up people ! We are being robbed by America's WORST MONOPOLY in the history of this country.

[Hobbit]

The higher prices are the REASON there's no line for gas. The higher the price goes, the less gas people buy. That's why the only time there have been gas lines in the U.S. was during the 70s gas crisis, when the federal government set a cap on the price of gas. If the price had been allowed to adjust itself, there wouldn't have been a shortage.

[Fountainhead]

The higher prices are the REASON there's no line for gas. The higher the price goes, the less gas people buy. That's why the only time there have been gas lines in the U.S. was during the 70s gas crisis, when the federal government set a cap on the price of gas. If the price had been allowed to adjust itself, there wouldn't have been a shortage.

As I stated ... please PROVE the reduction in consumption.

I don't see it.

I live my life by the credo: Don't believe half of what you hear, than what you see.

[Hobbit]

Look at all the fuel-effiecient cars on the road. Many people are walking or biking, rather than driving. Sorry, but these statistics aren't available in real time. You can, however, easily discover that this is a basic behaviour in any economy. The higher the price, the less the consumption.

[MtnBiker]

Another thing to consider is that oil is not a regional or national commodity it is a global commodity. Is consumption more or less in other areas of the world?

[Fountainhead]

Another thing to consider is that oil is not a regional or national commodity it is a global commodity. Is consumption more or less in other areas of the world?

There is a difference between the price of gasoline and the price of crude oil. Gasoline is refined crude oil. Gasoline prices are what I am discussing ... NOT crude oil prices. America doesn't EXPORT gasoline. So there is NO world marketplace for American refined gasoline.

The OIL companies are explaining this current "shortage" on lack of refinery capacity. There is NO worldwide "shortage" of crude oil.

Please see the chart below. The BLUE line is CRUDE OIL prices over the last two years. The RED line is GASOLINE PRICES. You will note that GASOLINE PRICES have radically risen over the price of CRUDE OIL since January of this year. This is an anomaly that cannot be explained by the price of CRUDE OIL.

It is FRAUD perpetrated by American Oil companies

[Fountainhead]

Look at all the fuel-effiecient cars on the road. Many people are walking or biking, rather than driving. Sorry, but these statistics aren't available in real time. You can, however, easily discover that this is a basic behaviour in any economy. The higher the price, the less the consumption.


Demand -vs- Price curves explain consumer behavior for discretionary goods and services.

NOT TRUE for the basic commodities of life. People haven't stopped driving. Look around. No shortage of SUV's, or daily trips in my neighborhood. This the REAL TIME information that I observe. Don't be stupid. Don't be gullibule.

[Hobbit]

Demand -vs- Price curves explain consumer behavior for discretionary goods and services.

NOT TRUE for the basic commodities of life. People haven't stopped driving. Look around. No shortage of SUV's, or daily trips in my neighborhood. This the REAL TIME information that I observe. Don't be stupid. Don't be gullibule.

I'm seeing more bikes and smaller cars in mine, not to mention a lot of motorcycles, people taking public transportation, and carpooling.

[Dilloduck]

There is a difference between the price of gasoline and the price of crude oil. Gasoline is refined crude oil. Gasoline prices are what I am discussing ... NOT crude oil prices. America doesn't EXPORT gasoline. So there is NO world marketplace for American refined gasoline.

The OIL companies are explaining this current "shortage" on lack of refinery capacity. There is NO worldwide "shortage" of crude oil.

Please see the chart below. The BLUE line is CRUDE OIL prices over the last two years. The RED line is GASOLINE PRICES. You will note that GASOLINE PRICES have radically risen over the price of CRUDE OIL since January of this year. This is an anomaly that cannot be explained by the price of CRUDE OIL.

It is FRAUD perpetrated by American Oil companies

This chart appears to dispute thee fact that America does not export gasoline

http://tonto.eia.doe.gov/dnav/pet/xls/pet_move_exp_dc_NUS-Z00_mbbl_m.xls

and this
Although gasoline exports represent a relatively small portion of total Gulf Coast production, they make up over 90 percent of U.S. gasoline exports. [5] Most of these exports are conventional gasoline headed for Mexico. During the emergency period, exports from the Gulf Coast fell by 51,600 barrels per day (35.7 percent), adding to Gulf Coast gasoline supplies. Gasoline exports from the rest of the U.S. (mostly California) held steady at about 10,000–12,000 barrels per day.

http://www.dallasfed.org/research/houston/2006/hb0602.html

[Pale Rider]

I think it's price gouging. But there's so much money and profit involved, even for the government, that don't expect anyone to ever do anything about it.

I see more fuel efficeint cars and motorcycles as Hobbit says too. Hybrids are getting real popular. I think that's going to be about the best way to "stick it to the man."

[Hobbit]

I think it's price gouging. But there's so much money and profit involved, even for the government, that don't expect anyone to ever do anything about it.

I see more fuel efficeint cars and motorcycles as Hobbit says too. Hybrids are getting real popular. I think that's going to be about the best way to "stick it to the man."

Yeah, the government makes at least twice what the oil company makes off of a gallon of gas.

[loosecannon]

The higher prices are the REASON there's no line for gas. The higher the price goes, the less gas people buy. That's why the only time there have been gas lines in the U.S. was during the 70s gas crisis, when the federal government set a cap on the price of gas. If the price had been allowed to adjust itself, there wouldn't have been a shortage.[/i]

You don't know a damned thing about the oil shortages of the 70's.

OPEC actually did restrict oil supplies to raise prices in that instance.

Gas prices are fixed by the gasoline and oil futures markets not by demand in the retail sector.

There is a complete and purposeful disconnect that prevents retail pressures from driving fuel prices.

this is who controls unleaded prices in the US:

http://en.wikipedia.org/wiki/Goldman_Sachs_Commodity_Index

here's more:

[i]We've mentioned the role Goldman Sachs has played in energy prices last year. They have been accused of manipulating GSCI for trading gains, political advantage, etc. When Oil first dropped, I doubted there was any political manipulation until I could see a market mechanism. It turns out the GSCI was that mechanism.

Now, GS has decided to get rid of the index. From an S&P Press Release:

Standard & Poor’s will acquire the market leading Goldman Sachs Commodity Index (“GSCI”) and two equity index families from the Goldman Sachs, the two companies announced today. Terms of the transaction were not disclosed.

The GSCI, created in 1991, currently includes 24 commodities and is designed to provide investors with a reliable and publicly available benchmark for investment performance in the commodity markets.

The clear commodity index leader, the GSCI has an estimated $60 billion in institutional investor funds tracking it, the majority of that coming through over-the-counter derivatives transactions.

After a brief transition period, the index will be renamed the S&P GSCI Commodity Index.




http://bigpicture.typepad.com/comments/2007/02/goldman_sells_g.html

[Pale Rider]

There is a complete and purposeful disconnect that prevents retail pressures from driving fuel prices.

You trying to tell me that if OPEC wants to raise gas prices, that they can't do it?

And what about China? That's a retail sector. Are you saying that the demand for gasoline in China isn't an influencing source?

I think if OPEC wants to raise the price of a gallon of gas, they just do it, like they've BEEN doing.

[loosecannon]

You trying to tell me that if OPEC wants to raise gas prices, that they can't do it?

And what about China? That's a retail sector. Are you saying that the demand for gasoline in China isn't an influencing source?

I think if OPEC wants to raise the price of a gallon of gas, they just do it, like they've BEEN doing.

Pale rider Yes I am saying that OPEC does not set oil prices. They have already sold the rights to most of their oil and are paid peanuts like $1/barrel for their oil.

The oil companies who own the rights to that oil (this is listed in every oil company prospectus as "oil reserves/easy google) sell the oil to 3 oil commodities exchanges wherein futures contracts literally and authoritatively set the prices.

OPEC doesn't sell gasoline.

China buys their oil at one of the three oil commodities exchanges.

[Pale Rider]

Pale rider Yes I am saying that OPEC does not set oil prices. They have already sold the rights to most of their oil and are paid peanuts like $1/barrel for their oil.

The oil companies who own the rights to that oil (this is listed in every oil company prospectus as "oil reserves/easy google) sell the oil to 3 oil commodities exchanges wherein futures contracts literally and authoritatively set the prices.

OPEC doesn't sell gasoline.

China buys their oil at one of the three oil commodities exchanges.

Well I have to separate the price of oil from that of gas. (I'm talking about gas prices.)

And you know they've been blaming the rising price of "gas" on the ever increasing demand in China.

[Fountainhead]

You don't know a damned thing about the oil shortages of the 70's.

OPEC actually did restrict oil supplies to raise prices in that instance.

Gas prices are fixed by the gasoline and oil futures markets not by demand in the retail sector.

There is a complete and purposeful disconnect that prevents retail pressures from driving fuel prices.

this is who controls unleaded prices in the US:

http://en.wikipedia.org/wiki/Goldman_Sachs_Commodity_Index

here's more:

[i]We've mentioned the role Goldman Sachs has played in energy prices last year. They have been accused of manipulating GSCI for trading gains, political advantage, etc. When Oil first dropped, I doubted there was any political manipulation until I could see a market mechanism. It turns out the GSCI was that mechanism.

Now, GS has decided to get rid of the index. From an S&P Press Release:

http://bigpicture.typepad.com/comments/2007/02/goldman_sells_g.html

But I am still waiting for the part where you talk about the ... Black helicopters, Skull & Bones, the Illuminati, New World Order, and oh ! oh ! Thats right ... the fact that all the JEWS stayed home from work at the World Trade Center on 9-11 and sold their airline stock.

Sheesh !

[Mr. P]

Why do gasoline prices fluctuate?
Even when crude oil prices are stable, gasoline prices normally fluctuate due to factors such as seasonality and local retail station competition. Additionally, gasoline prices can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages.

Seasonality in the demand for gasoline - When crude oil prices are stable, retail gasoline prices tend to gradually rise before and during the summer, when people drive more, and fall in the winter. Good weather and vacations cause U.S. summer gasoline demand to average about 5 percent higher than during the rest of the year. If crude oil prices remain unchanged, gasoline prices would typically increase by 10-20 cents from January to the summer.

Changes in the cost of crude oil - Events in crude oil markets were a major factor in all but one of the five run-ups in gasoline prices between 1992 and 1997, according to the National Petroleum Council’s study, U.S. Petroleum Supply - Inventory Dynamics. About 47 barrels of gasoline are produced from every 100 barrels of crude oil processed at U. S. refineries, with other refined products making up the remainder.

Crude oil prices are determined by worldwide supply and demand, with significant influence by the Organization of Petroleum Exporting Countries (OPEC). Since it was organized in 1960, OPEC has tried to keep world oil prices at its target level by setting an upper production limit on its members. OPEC has the potential to influence oil prices worldwide because its members possess such a great portion of the world’s oil supply, accounting for about 40 percent of the world’s production of crude oil and holding more than two-thirds of the world’s estimated crude oil reserves. Additionally, increased demand for gasoline and other refined products in the United States and the rest of the world is also exerting upward pressure on crude oil prices.

Rapid gasoline price increases have occurred in response to crude oil shortages caused by, for example, the Arab oil embargo in 1973, the Iranian revolution in 1978, the Iran/Iraq war in 1980, and the Persian Gulf conflict in 1990. Gasoline price increases in recent years have been due in part to OPEC crude oil production cuts, turmoil in key oil producing countries, and problems with petroleum infrastructure (e.g., refineries and pipelines) within the United States. Additionally, increased demand for gasoline and other petroleum products in the United States and the rest of the world is also exerting upward pressure on prices.

Product supply/demand imbalances - If demand rises quickly or supply declines unexpectedly due to refinery production problems or lagging imports, gasoline inventories (stocks) may decline rapidly. When stocks are low and falling, some wholesalers become concerned that supplies may not be adequate over the short term and bid higher for available product. Such imbalances have occurred when a region has changed from one fuel type to another (e.g., to cleaner-burning gasoline) as refiners and marketers adjust to the new product. Gasoline may be less expensive in one summer when supplies are plentiful vs. another summer when they are not. These are normal price fluctuations, experienced in all commodity markets. However, prices of basic energy (gasoline, electricity, natural gas, heating oil) are generally more volatile than prices of other commodities. One reason is that consumers are limited in their ability to substitute between fuels when the price for gasoline, for example, fluctuates. So, while consumers can substitute readily between food products when relative prices shift, most do not have that option in fueling their vehicles.



Figure 2. Motor Gasoline Prices at Retail Outlets, 2005 Average Regular Grade,
by Region
(dollars per gallon, including taxes)
Figure 2 is a map of the United States showing the cost of average regular grade gasoline at retail outlets, by region, for 2005. By region: New England $2.28; Central Atlantic $2.29; Lower Atlantic $2.25; Gulf Coast $2.19; Midwest $2.22; Rocky Mountains $2.26; and West Coast $2.43. For more information, contact the National Energy Information Center at 202-586-8800.







Why do gasoline prices differ according to region?
Although price levels vary over time, Energy Information Administration (EIA) data indicate that average retail gasoline prices tend to typically be higher in certain States or regions than in others (Figure 2). Aside from taxes, there are other factors that contribute to regional and even local differences in gasoline prices:

Proximity of supply - Areas farthest from the Gulf Coast (the source of nearly half of the gasoline produced in the United States and, thus, a major supplier to the rest of the country), tend to have higher prices. The proximity of refineries to crude oil supplies can even be a factor, as well as shipping costs (pipeline or waterborne) from refinery to market.

Supply disruptions - Any event which slows or stops production of gasoline for a short time, such as planned or unplanned refinery maintenance, can prompt bidding for available supplies. If the transportation system cannot support the flow of surplus supplies from one region to another, prices will remain comparatively high.

Competition in the local market - Competitive differences can be substantial between a locality with only one or a few gasoline suppliers versus one with a large number of competitors in close proximity. Con-sumers in remote locations may face a trade-off between higher local prices and the inconvenience of driving some distance to a lower- priced alternative.

Environmental programs - Some areas of the country are required to use special gasolines. Environmental programs, aimed at reducing carbon monoxide, smog, and air toxics, include the Federal and/or State-required oxygenated, reformulated, and low-volatility (evaporates more slowly) gasolines. Other environmental programs put restrictions on transportation and storage. The reformulated gasolines required in some urban areas and in California cost more to produce than conventional gasoline served elsewhere, increasing the price paid at the pump.
Why are California gasoline prices higher and more variable than others?

The State of California operates its own reformulated gasoline program with more stringent requirements than Federally-mandated clean gasolines. In addition to the higher cost of cleaner fuel, there is a combined State and local sales and use tax of 7.25 percent on top of an 18.4 cent-per-gallon Federal excise tax and an 18.0 cent-per-gallon State excise tax. Refinery margins have also been higher due in large part to price volatility in the region.

California prices are more variable than others because there are relatively few supply sources of its unique blend of gasoline outside the State. California refineries need to be running near their fullest capabilities in order to meet the State’s fuel demands. If more than one of its refineries experiences operating difficulties at the same time, California’s gasoline supply may become very tight and the prices soar. Supplies could be obtained from some Gulf Coast and foreign refineries; however, California’s substantial distance from those refineries is such that any unusual increase in demand or reduction in supply results in a large price response in the market before relief supplies can be delivered. The farther away the necessary relief supplies are, the higher and longer the price spike will be.

California was one of the first States to ban the gasoline additive methyl tertiary butyl ether (MTBE) after it was detected in ground water. Ethanol, a non-petroleum product usually made from corn, is being used in place of MTBE. Gasoline without MTBE is more expensive to produce and requires refineries to change the way they produce and distribute gasoline. Some supply dislocations and price surges occurred in the summer of 2003 as the State moved away from MTBE. Similar problems have also occurred in past fuel transitions.

Due to the threat of groundwater contamination, the use of the gasoline additive MTBE has been in the process of being phased-out for several years. More than half of the States have already banned the use of MTBE; the heaviest use of MTBE is currently in Texas and the Northeast, exclusive of New York and Connecticut. In 2005, a number of petroleum companies announced their intent to stop using MTBE in their gasoline in 2006. This was due to perceived potential for increased liability exposure due to the elimination of the oxygen content requirement for reformulated gasoline (RFG) included in the Energy Policy Act of 2005. Most of these companies will instead blend in ethanol to help replace the octane and clean-burning properties of MTBE. The rapid switch from MTBE to ethanol could have several impacts on the market that serve to increase the potential for supply disruptions and subsequent price volatility on a local basis. California faced temporary supply dislocations and price volatility during the summer of 2003 as MTBE was removed from gasoline in the State. Nevertheless, New York and Connecticut had a relatively smooth transition phasing out MTBE in 2004 as a result of better preparation from the gasoline suppliers and distributors. The supply and distribution system must undergo a number of changes to switch from MTBE-blended RFG to ethanol blended RFG, including developing supply chains to move more ethanol into undersupplied areas, converting terminal tanks from petroleum to ethanol, and adding blending equipment at terminals. It is expected that reformulated gasoline areas on the East Coast, especially in the Mid-Atlantic, will experience the most trouble obtaining ethanol supplies in a timely fashion due to logistical challenges of getting ethanol to and from terminals further inland by rail car. The Dallas-Fort Worth and Houston areas may also experience some trouble getting ethanol to major terminals due to limited rail access.

Operating costs - Even stations located adjacent to each other have different traffic patterns, rents, and sources of supply that influence retail price.

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_on_gasoline_prices/html/petbro.html

[loosecannon]

And you know they've been blaming the rising price of "gas" on the ever increasing demand in China.

Whether or not there is a smidgeon of truth to that or none or even a modest amount is impossible to say.

What can be known to a certainty is that market speculators are responsible for most of the price increase.

Since there has been no shortage yet, we know that supply shortage nor demand increase is yet the main driver.

[loosecannon]

But I am still waiting for the part where you talk about the ... Black helicopters, Skull & Bones, the Illuminati, New World Order, and oh ! oh ! Thats right ... the fact that all the JEWS stayed home from work at the World Trade Center on 9-11 and sold their airline stock.

Sheesh !

Fountain head. I dismantle quack pot theories, read my posts.:laugh2:

[loosecannon]

Why do gasoline prices fluctuate?


Lies Mr P, brought to you by a dept whose dept head serves at the pleasure of the president.

You believe it if you want but call any investment advisor and ask them how futures contracts effect the price of commodities.

[Fountainhead]

Why do gasoline prices fluctuate?
Even when crude oil prices are stable, gasoline prices normally fluctuate due to factors such as seasonality and local retail station competition. Additionally, gasoline prices can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages.

...


Operating costs - Even stations located adjacent to each other have different traffic patterns, rents, and sources of supply that influence retail price.

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_on_gasoline_prices/html/petbro.html

Then please explain HOW the BIG OIL corporations in America have been turning WORLD RECORD PROFITS quarter after quarter after quarter in the face of allllllllllllllll these difficult market conditions ?

What you just printed is very slick, very professional Public Relations bullshit

Do you work for ... or receive a pension from BIG OIL ?

[Mr. P]

Lies Mr P, brought to you by a dept whose dept head serves at the pleasure of the president.

You believe it if you want but call any investment advisor and ask them how futures contracts effect the price of commodities.

Futures are only one aspect of prices.

[Mr. P]

Then please explain HOW the BIG OIL corporations in America have been turning WORLD RECORD PROFITS quarter after quarter after quarter in the face of allllllllllllllll these difficult market conditions ?

What you just printed is very slick, very professional Public Relations bullshit

Do you work for ... or receive a pension from BIG OIL ?

Volume.

[Dilloduck]

Lies Mr P, brought to you by a dept whose dept head serves at the pleasure of the president.

You believe it if you want but call any investment advisor and ask them how futures contracts effect the price of commodities.

Scenario---A big hurricane hits Texas refineries and temporarily halts drilling on off shore rigs. Are you telling me that the hurricane is of no significance because it's really futures contracts that control prices ? If they so chose they could actually reduce the price we pay for gasoline at the pumps?

[-Cp]

http://www.insidebayarea.com/trivalleyherald/ci_5807588

We are told that gas prices have skyrocketed because of "refinery problems". We are told that there is a "supply problem" with gasoline. Really ?

I have a simple question for everyone.

Have you had any difficulty filling your tank ? Are you sitting in gas-lines ? Have you been turned-away from your local gas station ? Do you see signs at your local station reading: OUT OF GAS ?

What supply problem ?

Please PROVE that there is a "supply problem". I hear a really slick PR presentation from BIG OIL ... but no PROOF of a reason for higher prices.

Have the higher prices reduced consumption of gasoline ? Are YOU driving less ? Are "other people" driving less ? There is NO EVIDENCE of less consumption during my morning commute ... or any other time that I drive my local roads. Supply and Demand have not changed in any significant way.

Wake-up people ! We are being robbed by America's WORST MONOPOLY in the history of this country.

What is worse? Paying 4 dollars a gallon for a substance that had to first be drilled for, then pumped out of the ground - then refined, then trucked all the way to your local filling station or:

Paying $32 dollars a gallon for 16 ounces worth of Milk (14oz worth) and Espresso (about two ounces) at Starbucks?

Why no outcry against Starbucks and other coffee places?

Or WORSE - PAYING over $2.00 / bottle for WATER?!?!?

[loosecannon]

Futures are only one aspect of prices.

correct, there are also taxes and delivery costs and a tiny % that is determined by retailing discretion.

Since taxes are less than 15% and retail discretion is a few % and delivery might add 30 cents/gallon what does that mean?

[loosecannon]

What is worse? Paying 4 dollars a gallon for a substance that had to first be drilled for, then pumped out of the ground - then refined, then trucked all the way to your local filling station or:

Paying $32 dollars a gallon for 16 ounces worth of Milk (14oz worth) and Espresso (about two ounces) at Starbucks?

Why no outcry against Starbucks and other coffee places?

Or WORSE - PAYING over $2.00 / bottle for WATER?!?!?

Because if we all were forced to fast from milk for a week it would barely phase us.

A week without gas would cause riots.

[Mr. P]

correct, there are also taxes and delivery costs and a tiny % that is determined by retailing discretion.

Since taxes are less than 15% and retail discretion is a few % and delivery might add 30 cents/gallon what does that mean?
It means it's ALL in the price of that gallon. :poke:

[loosecannon]

Scenario---A big hurricane hits Texas refineries and temporarily halts drilling on off shore rigs. Are you telling me that the hurricane is of no significance because it's really futures contracts that control prices ?

Yes that is exactly what I am saying.

>Event happens refinery taken offline
>speculators in commodity exchange bid as normal according to news etc., prices are fixed by actual contracts.

But if no event ever occurs like an actual shortage, I mean at all in 30 years how can this be anything other than a ruse? This is profiteering not a real shortage or a real demand increase. The balance of world production cushions the supply interuption by selling gas or oil to meet demand. Nobody sits at a closed gas station unable to buy gas.



If they so chose they could actually reduce the price we pay for gasoline at the pumps

Yes and this just happened last august, links on previous page.

Goldman Sach's owns the worlds third largest oil futures exchange. 90% of the unleaded (that is unleaded priced at it's final retail price minus delivery and tax and retail discretion) sold in the US is traded and it's prices set at that exchange.

In August of last year GoldMan liquidated $6billion in unleaded futures contracts which was 40% of all active contracts sold at the exchange. The price of unleaded fell like a rock before the election.

GS owned the exchange, owned the most futures contracts (which mightily suggests that they had systematically driven up the prices in the first place), and sold them off all at once. Unprecedented.

What is more unprecedented is that they claimed that Unleaded fuel was no longer a standard bearer of international commodities, which is what they held contracts for, to present them in universal commodity packages that they sold to institutional investors.

So HOW could unleaded fuel suddenly become anything less than a standard bearer of international commodities?

I mean are there two other commodities on earth which better represent the core value of commodities generally?

And why the change all at once? Dumping $6billion in contracts in one month?

[Mr. P]

Because if we all were forced to fast from milk for a week it would barely phase us.

A week without gas would cause riots.

Yup, coffee doesn't get yer car running, nor milk or water..I hate this type of cost comparison. It's not even close to being relevant, IMO.

[Mr. P]

One more thing, Loose. I agree with much of what you're saying as far as GS, but not all of the futures stuff. I would say it may be possible for these traders to control maybe 70% of the price ( just a guess).

I traded stock options daily for a bit over a year. That doesn't mean I know much, but I do know the big dogs on the 'street' can change stuff overnight with their after hours trading. It's not a level playing field by any means.

I've seen their power firsthand and learned some very expensive lessons.

[-Cp]

Because if we all were forced to fast from milk for a week it would barely phase us.

A week without gas would cause riots.

Nobody is forcing you to consume gas anymore than they are milk and coffee...

[loosecannon]

Nobody is forcing you to consume gas anymore than they are milk and coffee...

which is utterly irrelevant.

Nobody is paying me to use gasoline vs milk or coffee either.

And nobody is pointing a gun at my head.....

I still need gas a hellava lot more than milk or coffee. In fact our industrial infrastructure is presently so energy and chemically dependent on liquid fossil fuels that if Gasoline and diesel were unavailable for one month society itself may collapse and never recover.

[loosecannon]

One more thing, Loose. I agree with much of what you're saying as far as GS, but not all of the futures stuff. I would say it may be possible for these traders to control maybe 70% of the price ( just a guess).

I traded stock options daily for a bit over a year. That doesn't mean I know much, but I do know the big dogs on the 'street' can change stuff overnight with their after hours trading. It's not a level playing field by any means.

I've seen their power firsthand and learned some very expensive lessons.

I agree with every word of that Mr P.

And it is entirely possible that an event could occur tommorrow that would change the whole equation with real shortages becoming the driving forces.

[-Cp]

which is utterly irrelevant.

Nobody is paying me to use gasoline vs milk or coffee either.

And nobody is pointing a gun at my head.....

I still need gas a hellava lot more than milk or coffee. In fact our industrial infrastructure is presently so energy and chemically dependent on liquid fossil fuels that if Gasoline and diesel were unavailable for one month society itself may collapse and never recover.

But you personally, don't NEED Gas any more than you do coffee... you could walk, run, ride a bike etc...

[loosecannon]

But you personally, don't NEED Gas any more than you do coffee... you could walk, run, ride a bike etc...

I don't know what your point is Cp.

I need petrochemicals to do anything as does almost every one of us. I mean eliminate petro chemicals and immediately the worlds capacity for food production drops to enough to sustain only half the people on earth. And that is the tip of the iceberg.

We do not "need" to be dependent on petrochems, but we are fully reliant on them for our survival.

[Fountainhead]

But you personally, don't NEED Gas any more than you do coffee... you could walk, run, ride a bike etc...

Lets consider your BIKE, for example ...

Lets see:

Oil used in the manufacturing of the frame in the manfacturing of your bike.
Oil used in firing the smelters to create the aluminum parts
Oil used in creating the steel used for parts
Oil used in the manufacture of exotic metal alloys
Oil used in the manufacture of carbon fiber parts
Oil used in the manufacturing of your tires and other rubber parts.
Oil used in the manufacturing of the plastic seat.
Oil used in shipping the bike from China on a huge cargo container ship.
Oil used in shipping from the Docks to a central hub.
Oil used in shipping to a local distributer.
Oil used in lubing the chain.
Oil used in making a protective box to ship the bike in.
Oil used in printing the pamphlets or instructions.
Oil used in the building to heat the building that shipped your bike to.
Oil used for the plastic sleeving around the cable pulls.
Oil used in manufacturing of all the screws that put your bike together.
Oil used in the plastic brakes on your handle bar.
Oil used in the making of the cables.
Oil used in the manufacturing of the rims, the spokes......
Oil used in the manufacturing of all the fancy lables stuck on the bike.
Oil used in the manufacturing machine to make the glues, and othe parts I forgot to mention.

[Yurt]

loosecannon;57331]You don't know a damned thing about the oil shortages of the 70's.

OPEC actually did restrict oil supplies to raise prices in that instance.

Gas prices are fixed by the gasoline and oil futures markets not by demand in the retail sector.

There is a complete and purposeful disconnect that prevents retail pressures from driving fuel prices.

this is who controls unleaded prices in the US:

http://en.wikipedia.org/wiki/Goldman_Sachs_Commodity_Index

And what then do those markets look to?

[Yurt]

Lets consider your BIKE, for example ...

Lets see:

Oil used in the manufacturing of the frame in the manfacturing of your bike.
Oil used in firing the smelters to create the aluminum parts
Oil used in creating the steel used for parts
Oil used in the manufacture of exotic metal alloys
Oil used in the manufacture of carbon fiber parts
Oil used in the manufacturing of your tires and other rubber parts.
Oil used in the manufacturing of the plastic seat.
Oil used in shipping the bike from China on a huge cargo container ship.
Oil used in shipping from the Docks to a central hub.
Oil used in shipping to a local distributer.
Oil used in lubing the chain.
Oil used in making a protective box to ship the bike in.
Oil used in printing the pamphlets or instructions.
Oil used in the building to heat the building that shipped your bike to.
Oil used for the plastic sleeving around the cable pulls.
Oil used in manufacturing of all the screws that put your bike together.
Oil used in the plastic brakes on your handle bar.
Oil used in the making of the cables.
Oil used in the manufacturing of the rims, the spokes......
Oil used in the manufacturing of all the fancy lables stuck on the bike.
Oil used in the manufacturing machine to make the glues, and othe parts I forgot to mention.

He said "gas." Not everything you have listed is exactly refined...

[Fountainhead]

You're right. Good Point

[loosecannon]

And what then do those markets look to?

I would be guessing if I assume I know what you mean. Are you asking what informs the decisions of the futures traders?

Profit motive. When all commodities are in bubbles obscure irrationals like a liquidity surplus can cause prices to triple in 6 years, and they did.

Every asset class expanded except the stock market. It had nothing to do with the supply and demand of gasoline it had everything to do with the surplus of investment capital and a shortage of things to invest in that actually had value or would return enough to exceed the interest on the borrowed capital.

& years ago nobody wanted to invest in anything that didn't return 10%/year. Which is why stocks bubbled and fell and bonds are flat. Bonds and stocks can not return sufficintly to match investors expectations. And with interest due it isn't an option to break even.

So what do investors do with an extra $300 trillion brand new dollars created since 1999? They invest them in things that have no value and therefore no limit on how much they can bubble. Derivatives mainly.

Gasoline futures are a kind of derivative, similar to options. $50 trillion of investment capital has been pumped into options and futures since 1999. The whole market before 1999 was less than $6 trillion.

Profit motive informs those investors if that is your question.

[loosecannon]

He said "gas." Not everything you have listed is exactly refined...

No but you still would not be able to buy a new bike if gas dissappeared tommorrow. Once the ones in stock were gone, that's it.

[Dilloduck]

I would be guessing if I assume I know what you mean. Are you asking what informs the decisions of the futures traders?

Profit motive. When all commodities are in bubbles obscure irrationals like a liquidity surplus can cause prices to triple in 6 years, and they did.

Every asset class expanded except the stock market. It had nothing to do with the supply and demand of gasoline it had everything to do with the surplus of investment capital and a shortage of things to invest in that actually had value or would return enough to exceed the interest on the borrowed capital.

& years ago nobody wanted to invest in anything that didn't return 10%/year. Which is why stocks bubbled and fell and bonds are flat. Bonds and stocks can not return sufficintly to match investors expectations. And with interest due it isn't an option to break even.

So what do investors do with an extra $300 trillion brand new dollars created since 1999? They invest them in things that have no value and therefore no limit on how much they can bubble. Derivatives mainly.

Gasoline futures are a kind of derivative, similar to options. $50 trillion of investment capital has been pumped into options and futures since 1999. The whole market before 1999 was less than $6 trillion.

Profit motive informs those investors if that is your question.

So--there is absolutely NO reason for gas prices to fluctuate when a hurricane knocks refineries offline ?

[Yurt]

You're right. Good Point

Which post are you referring to?

[loosecannon]

So--there is absolutely NO reason for gas prices to fluctuate when a hurricane knocks refineries offline ?

Probably not. Oil and gas are dumped into a worldwide pool. And consumers draw off of that world wide pool.

IF there is ever a shortage so severe that demand can not be met then supply has driven prices up.

I am aware of no event that created actual shortages since the late 70's.

The worldwide supply has always been capable of accomidating regional shortfalls ever since, as best as I can tell.

Well it could cost a little more for delivery for oil or gas from another region. Pennies/gallon. Not dimes.

[Pale Rider]

So--there is absolutely NO reason for gas prices to fluctuate when a hurricane knocks refineries offline


Probably not. Oil and gas are dumped into a worldwide pool. And consumers draw off of that world wide pool.

So... when gas prices shot straight up after Katrina, and every media outlet there was proclaimed it was because of that, they were lying to us, and that really, in fact, it was price gouging?

[Fountainhead]

So--there is absolutely NO reason for gas prices to fluctuate when a hurricane knocks refineries offline ?

Theoretically ... YES

But I will repeat my original question. Were you UNABLE to purchase gasoline during the hurricane shut-down of refineries ? Were there long gas lines ? Did you see signs on the street corners saying NO GAS ?

NO

Because there was NO SHORTAGE of gasoline.

There was only a COVER STORY to justify the increased retail pricing of gasoline

BIG OIL owns and operates the vast majority of retail gasoline stations. So BIG OIL controls the retail price at the pump. They make it, they retail it ... and they are FIXING the price of gasoline.

The consumer is getting SCREWED ... and our government is doing NOTHING to stop the monopolistic behavior of BIG OIL.