Diaster in waiting....
 

On Thu, 20 Jul 2006 19:22:36 -0400, Wayne.B wrote:


The
problem with the oil market is that it takes years for new supply to be
created, and increases in demand by former third world countries have been
out running supply increases for a while now.

Yup, and with no end in sight. Personally, I think the reality is scarier
than the conspiracy theories. ;-(

Diaster in waiting....
 

"Wayne.B" wrote in message
...
On Thu, 20 Jul 2006 17:11:55 GMT, "JoeSpareBedroom"
wrote:

Hopefully, Wayne will respond on his own. For you:

"Oil prices jumped $2.00 a barrel today, on fears surrounding new violence
in XYZ country"

Explain the bias in that statement.


Uncertainty in the middle east brings out the speculators

There the combination of words I was waiting for someone to make the mistake
of using. You're correct. It brings out the speculators. So, a bunch of
suits are playing games and sending a ripple effect throughout the economy.

Time for the law to change.

Diaster in waiting....
 

On Fri, 21 Jul 2006 11:39:59 GMT, "JoeSpareBedroom"
wrote:

So, a bunch of
suits are playing games and sending a ripple effect throughout the economy.

Time for the law to change.

Ahhhh yes, government price controls. Great idea, have you ever seen
it in action? You wouldn't be able to buy oil at any price because
everyone would be on allocation, and another giant federal
bureauacracy would spring up to (mis)manage the whole mess.

If you think commodities are such an easy get-rich-quick scheme, why
not put on your own "suit" and throw some money in the ring. A quick
call or two to your broker and you can be a master of the universe
also.

Diaster in waiting....
 

"Wayne.B" wrote in message
...
On Fri, 21 Jul 2006 11:39:59 GMT, "JoeSpareBedroom"
wrote:

So, a bunch of
suits are playing games and sending a ripple effect throughout the
economy.

Time for the law to change.

Ahhhh yes, government price controls. Great idea, have you ever seen
it in action? You wouldn't be able to buy oil at any price because
everyone would be on allocation, and another giant federal
bureauacracy would spring up to (mis)manage the whole mess.

If you think commodities are such an easy get-rich-quick scheme, why
not put on your own "suit" and throw some money in the ring. A quick
call or two to your broker and you can be a master of the universe
also.


I'm not talking about price controls. I'm talking about eliminating the
trading of one particular commodity for "sport", by people who are in no way
connected to the business. You know as well as I do that the majority of the
price jumps have been "on concerns about" things in places like Iraq which,
in your wildest dreams, could not have materially affected oil production in
any way, shape or form. The concept is as stupid as private investors
selling all their mutual funds because Home Depot reports bad earnings for
the last quarter.

Diaster in waiting....
 

"JoeSpareBedroom" wrote in message
...

"Wayne.B" wrote in message
...
On Fri, 21 Jul 2006 11:39:59 GMT, "JoeSpareBedroom"
wrote:

So, a bunch of
suits are playing games and sending a ripple effect throughout the
economy.

Time for the law to change.

Ahhhh yes, government price controls. Great idea, have you ever seen
it in action? You wouldn't be able to buy oil at any price because
everyone would be on allocation, and another giant federal
bureauacracy would spring up to (mis)manage the whole mess.

If you think commodities are such an easy get-rich-quick scheme, why
not put on your own "suit" and throw some money in the ring. A quick
call or two to your broker and you can be a master of the universe
also.


I'm not talking about price controls. I'm talking about eliminating the
trading of one particular commodity for "sport", by people who are in no
way connected to the business. You know as well as I do that the majority
of the price jumps have been "on concerns about" things in places like
Iraq which, in your wildest dreams, could not have materially affected oil
production in any way, shape or form. The concept is as stupid as private
investors selling all their mutual funds because Home Depot reports bad
earnings for the last quarter.


Ah, but if problems in Iraq expand to other oil producing countries in the
region, there could be a "real" problem in the oil supply pipeline.

I

Diaster in waiting....
 

"JoeSpareBedroom" wrote in message
...

"NOYB" wrote in message
k.net...

"JoeSpareBedroom" wrote in message
...

"NOYB" wrote in message
ink.net...

"JoeSpareBedroom" wrote in message
...

"NOYB" wrote in message
nk.net...

"JoeSpareBedroom" wrote in message
...

"NOYB" wrote in message
nk.net...

"JoeSpareBedroom" wrote in message
...
"Wayne.B" wrote in message
...
On Thu, 20 Jul 2006 15:26:14 GMT, "JoeSpareBedroom"
wrote:

Harry *does* have a point about the price/politics connection,
Chuck. I keep
asking a question that the 54% are uncomfortable with, and do not
answer.
But, you, of all people, should be able to answer it.

==========

He did answer it, told you it was off topic in a boating group,
and he
is correct.

Current high prices are a political failure of the 70s and 80s,
nothing recent. The supply side is realtively fixed for any
given
price point, opportunities are on the demand side.


Here...grab this rope before you sink any further in the mud,
Wayne.

Do you listen to the news at all? Think of the last 100 times
you've heard about price increases for a barrel of oil during the
last 24 months. Now, forget the reports you heard when hurricanes
were a threat. That leaves 90% of the reports. A hurricane around
oil rigs is a valid reason for price jitters.

Now, for the remaining 90%, what's the reason mentioned almost
100% of the time?

According to the NY Times, Washington Post, CBS, etc.? Or
according to those without a political axe to grind?

Hopefully, Wayne will respond on his own. For you:

"Oil prices jumped $2.00 a barrel today, on fears surrounding new
violence in XYZ country"

Explain the bias in that statement.

Bias? None. But there's plenty of opinion in it.

I agree. Whose opinion would you say it is?

Probably some options trader who's long in oil contracts.

Right. Now, when there's LESS nonsense going on in the middle east, do
you see price volatility being blamed on that reason MORE often, or LESS
often?

Depends on the number and size of the options held by the institutional
guys.

....which is all a matter of opinion and guesswork. That should be
illegal.

Absolutely. Guys like Soros shouldn't be able to bankrupt a country through
options trading.

Diaster in waiting....
 

"NOYB" wrote in message
nk.net...

....which is all a matter of opinion and guesswork. That should be
illegal.

Absolutely. Guys like Soros shouldn't be able to bankrupt a country
through options trading.




For once, we appear to agree.

Diaster in waiting....
 

"ACP" wrote in message
...

"JoeSpareBedroom" wrote in message
...

"Wayne.B" wrote in message
...
On Fri, 21 Jul 2006 11:39:59 GMT, "JoeSpareBedroom"
wrote:

So, a bunch of
suits are playing games and sending a ripple effect throughout the
economy.

Time for the law to change.

Ahhhh yes, government price controls. Great idea, have you ever seen
it in action? You wouldn't be able to buy oil at any price because
everyone would be on allocation, and another giant federal
bureauacracy would spring up to (mis)manage the whole mess.

If you think commodities are such an easy get-rich-quick scheme, why
not put on your own "suit" and throw some money in the ring. A quick
call or two to your broker and you can be a master of the universe
also.


I'm not talking about price controls. I'm talking about eliminating the
trading of one particular commodity for "sport", by people who are in no
way connected to the business. You know as well as I do that the majority
of the price jumps have been "on concerns about" things in places like
Iraq which, in your wildest dreams, could not have materially affected
oil production in any way, shape or form. The concept is as stupid as
private investors selling all their mutual funds because Home Depot
reports bad earnings for the last quarter.


Ah, but if problems in Iraq expand to other oil producing countries in the
region, there could be a "real" problem in the oil supply pipeline.

That's "if". In the past, they have not. Here's a question: What are your 3
favorite main courses for dinner?

Diaster in waiting....
 

On Fri, 21 Jul 2006 13:11:55 GMT, "JoeSpareBedroom"
wrote:

The concept is as stupid as private investors
selling all their mutual funds because Home Depot reports bad earnings for
the last quarter.

It's called free market capitalism. The opposite of which is ???

There are countries in the world that support your point of view. Why
not consider relocating? Rochester, NY is a lousy place to spend the
winter in any case, warm up a little and enjoy life. I grew up 50
miles east of there and have never looked back. It was a great place
to be from.

Diaster in waiting....
 

Wayne.B wrote:


If you think commodities are such an easy get-rich-quick scheme, why
not put on your own "suit" and throw some money in the ring. A quick
call or two to your broker and you can be a master of the universe
also.

The "free market" explanation for $4/gallon gas at the fuel dock and
the skyrocketing costs of chemicals that will soon put the price of new
fiberglass boats up to the stratosphere doesn't really work.

In a free market, competition to produce expands as demand to consume
expands and tends to moderate prices. Companies are forced to become
more efficient to flourish, even in prosperous times.

Demand to consume petroleum products is growing, but there are so many
barriers to the marketplace that new suppliers are not emerging. In
fact, the old suppliers are merging and competition is actually
decreasing.

There is no "free market" dynamic in the oil industry to defend.

We often hear that the "oil companies are only grossing 15-cents a
gallon!". Nonsense. That's their gross at the gas pump- pumps sitting
in gas stations now primarily owned by the big oil companies rather
than independent operators. The companies book "internal" profits as
crude flows from one subsidiary that pumps the oil, to another
subsidiary that transports the crude, to another subsidiary that
refines the crude, to another that distributes it, etc. Total oil
company profits are currently about 90-cents per gallon, up from closer
to 50-cents (yes, that's an 80 percent increase) a year or so ago.

Tracking this increase to supply and demand would tend to indicate that
somehow the oil companies sold 80 or 90 pecent more fuel. Didn't, of
course.

That 80% increase in the profit portion of the price of a gallon of gas
at the fuel dock is also pretty consistent with the increase in
coporate profits.....for example, Conoco/Phillips recently reported
profits that were up almot 90% from a year earlier.

It is possible to bit on supply and demand, I guess. As in "We've got a
corner on the supply, you guys have an insatiable demand, so in light
of the fact that we have no effective competition tying to place a
downward pressure on pricing we will simply continue to raise the
prices as high and as fast as we want to........"

A cut 'n paste analysis of pricing and profit follows:

"In 2005, Exxon reported third-quarter profits of $9.92 billion, 75%
higher than its third-quarter earnings in 2004, and the largest
quarterly profit ever reported by a US company.

For the 3rd quarter of 2005, ChevronTexaco reported a 53% increase to
nearly $4 billion; and ConocoPhillips?s profits were up 89% to $3.8
billion.

Exxon is reportedly giving its retiring chairman, Lee Raymond, a
package worth nearly $400 million, in combined pension, stock options
and other perks, including a $1 million consulting deal, the use of a
corporate jet for professional purposes, 2 years of home security, and
a car and driver.

While testifying at a Congressional hearing last November, Raymond
claimed that high gas prices were a result of supply and demand. "We're
all in this together," he told members of Congress, "everywhere in the
world."

"In 2004, Mr. Raymond," Senator, Barbara Boxer (D-CA), was quick to
point out, "your bonus was over $3.6 million."

After exhibiting a chart revealing the pay scale for each of the CEOs
at the hearing, Senator Boxer told the oil executives: ?Your sacrifice
appears to be nothing.?

According to Exxon's filings with the Securities and Exchange
Commission, Raymond's paycheck rose to $51.1 million in 2005.

These profits and CEO salaries are obscene at a time when the elderly
and families with young children are struggling every day to keep their
homes heated and fill up the gas tank to drive to work and back."


*************
Evelyn Pringle -

(Evelyn Pringle is an investigative journalist focused on exposing
corruption in government and corporate America)



All something to think about while watching the price wheels whirl like
an old time Vegas slot machine next time you're pumping fuel into the
good ship CostaLotta.