On Thu, 04 Dec 2014 21:54:18 -0500, Wayne.B
wrote:

On Thu, 04 Dec 2014 20:50:37 -0500, "Mr. Luddite"
wrote:

On 12/4/2014 8:23 PM, Wayne.B wrote:
On Thu, 4 Dec 2014 14:51:13 -0800 (PST), Tim
wrote:

Wow, todays oil is almost half price from June. This may help the economy. I know it will make a lot of other commodities more reasonable too.

Hope it helps with the boat fuel next year....

http://www.forbes.com/sites/billgrei...into-collapse/


===


I hope it helps with boat fuel also.

So where are all the conspiracy theories about how these price
declines are being caused by greedy speculators and crooked bankers?

I forget, supply and demand theory only works when prices are going
down, not when going up. My bad.


Maybe Harry will let us hoard some by storing it in his "red barn" or
make believe boat.



I really don't understand all of the oil pricing stuff. Isn't a lot of
the price decrease a result of putting pressure on Russia who depends on
a $90 per barrel (min) price to keep their economy afloat?

It would be nice for the consumers if the prices stay low but I have a
hunch this is a temporary dip.

===

The mechanics of oil pricing are not all that complicated once you
understand the basics. First, virtually all oil that gets pumped out
of the ground has to go somewhere. The producing countries just don't
have all that much storage space. Some of the oil is sold under long
term contracts to pre-arranged buyers at pre-arranged prices. That
is the simplest case. The rest will get loaded into tankers and enter
the auction pool where tanker brokers try to line up buyers and
sellers. The oil has to go somewhere since the tankers can't stay at
sea forever.

The end game is supply and demand. If there are more buyers than
sellers, prices go up, and of course the opposite is true as it is
right now with prices going down. It doesn't take too much of a
mismatch to swing prices quite a bit. If there is long term over
supply, prices will first come down and then by necessity, demand will
either increase or producing countries will have to pump less. The
amount of storage space is very finite.

Producing countries are very reluctant to lose market share of course.
This results in a high stakes game of chicken to see who will blink
first. Right now the OPEC countries can't come to an agreement on
lowering production so the over supply will continue for a while
longer, and high cost producers will eventually be forced out of the
market by economics. This is already happening here and in Canada
where the shale oil producers are being caught in a cost squeeze and
they are beginning to suspend new drilling operations.

Thanks. I'm sure the smart liberals knew all that, but I found it
interesting. Hadn't thought about the storage problem.
--

"The modern definition of 'racist' is someone who's winning an argument
with a liberal."

....Peter Brimelow (Author)
(Thanks, Luddite!)