Are oil prices going down because of the upcoming election?

[Tom]

Originally posted by: Brovane

nd if you read what I said carefully, I did not say oil companies are manipulating markets, I don't have a way of knowing; I said the facts someone else mentioned did not contradict each other, but in fact supported each other. And that the current government we have isn't interested in finding out what is happening, so if there was any shens, our government won't do it's job to find out.

It is difficult for a company to try to control the worldwide price of a commodity that is produced by several different sources and can be farily easily moved around. I do understand what you are saying that the current administration will not invistigate any evidence of wrong doing by the companies involved. This reminds me of the California power crisis several years agon. Even when California Attorney General had audio tapes of various out of state companies discussing manipulating the power market the federal regulators still didn't do a thing to order refunds.

GB

It isn't necessary to think of one company being able to manipulate a market. An entire industry can easily control prices, at least for a while.

Take Katrina. Gas prices skyrocketed because the entire industry acted as if there was a shortage, or there was going to be a shortage, even though there was no real shortage. And then the high prices were maintained for a very long time. That kind of manipulation occurs industry-wide, not just one company.
It isn't sustainable manipulation, market forces might correct it at some point. But a government that gives a damn can shine a lot on what is happening, and get things on track faster, than a government that tacitly approves of the manipulation.

 

[Strk]

Originally posted by: EagleKeeper

Originally posted by: Brovane
Help me understand this one.

When gas prices rise everyone is screaming and blaming the President that he should do more to bring gas prices, as if he has this control over gas prices. Now that gas prices are coming back down everyone is screaming that the President is trying to manipulate the market for the upcoming election.

GB

You are correct.

Those that are part of the Anyone but bush crowd want their cake and eat it also.

Some of them also feel that the spike in prices due to Katrina are his fault.

In all fairness, I provided a fairly credible reason on something he did do to affect prices considerably.

 

[fitzov]

No way. Nothing like that could ever happen here. All of our elections are completely clean and honest, and there is no need to manipulate the populace in any way.

/sarcasm (for the dense)

 

[HomerJS]

I think it's a setup for the election. Gas prices never fall before Labor Day which is the biggest driving day of the year. Why did that happen this time? You can't convince me there is a sudden glut when we've been dealt a steady stream of "not enough refining capacity", "overseas demand", et al.

 

[umbrella39]

If they go back up to $3 a gallon before the election, I think we could myth bust it.

If they stay low through the elections and the GOP holds their majority THEN they go back up to $3 before Christmas, then I think you might have something OP.

To speculate at this point would be paranoid imo. I guess just wait and see what happens...

If you prove to be right, I don't think it will be because Bush has some magic control over the prices, it would be because the people who actually DO have control... love Bush, the GOP in general, and their policies a great, great deal.

 

[bobdelt]

If any of you think the president can control the price of oil, you guys are looney. Come on now, what can he actually do? Call his buddies at the oil companies and tell them to lower the price? It doesnt work that way. The market determines the price. The market controls it all. OPEC cant even control production, no less the prices.

 

[Tom]

Originally posted by: bobdelt
If any of you think the president can control the price of oil, you guys are looney. Come on now, what can he actually do? Call his buddies at the oil companies and tell them to lower the price? It doesnt work that way. The market determines the price. The market controls it all. OPEC cant even control production, no less the prices.

The OIL INDUSTRY AS A WHOLE can conceivably control prices for some period of time.

If they believe it is in their interest politically to have lower prices at this time, then there is at least a possibility that the lower prices aren't a coincidence.

That doesn't mean the President is controlling the price of oil, it means the people who can control the price of oil to some extent want to improve the chances the status quo will continue.

And the status quo is, every elected branch of government is in the hands of the people the oil industry wants there.

 

[bobdelt]

Originally posted by: GroundedSailor

Originally posted by: zephyrprime
Have you noticed that gasoline prices have fallen much faster than oil prices? Gasoline prices where I am have fallen 24% while crude oil has only fallen 19%. Since gasoline has several additional costs to it that haven't changed (refining costs, taxes), the price of gasoline should fall slower than oil.

There's been talk on inverstment boards that they just ran out of storage to stockpile crude so they had to sell it. That's a unsubstantiated rumor though.

You're right. High oil stockpiles are part of the reason why they are dropping now. For quite a while oil prices have been in Contango . Now that storage is getting full, oil has to be sold directly.

Here an opinion on the oil futures:
http://www.econbrowser.com/archives/2006/04/contango_specul.html

Here's a simpler explanation;
http://www.npr.org/templates/story/story.php?storyId=5705263

Its not that simple. Keep in mind companies do other things, like hedge their investments.

 

[bobdelt]

Originally posted by: Tom

Originally posted by: bobdelt
If any of you think the president can control the price of oil, you guys are looney. Come on now, what can he actually do? Call his buddies at the oil companies and tell them to lower the price? It doesnt work that way. The market determines the price. The market controls it all. OPEC cant even control production, no less the prices.

The OIL INDUSTRY AS A WHOLE can conceivably control prices for some period of time.

If they believe it is in their interest politically to have lower prices at this time, then there is at least a possibility that the lower prices aren't a coincidence.

That doesn't mean the President is controlling the price of oil, it means the people who can control the price of oil to some extent want to improve the chances the status quo will continue.

And the status quo is, every elected branch of government is in the hands of the people the oil industry wants there.

Yes, they could collude, or in theory OPEC can control the price of oil. However OPEC countries dont stick to production quotas, they all cheat the system, and over produce, and the market behaves much more like a free market than a oligopoloy.

 

[bobdelt]

But its traded on the market? How can they fix the price? (to a significant degree?)

 

[ProfJohn]

Gas prices ALWAYS fall after labor day due to the drop in demand.

Keep in mind as well that part of the reason gas is so high because of all the fear in the market. Fear of hurricanes, a terror attack, Iran starting a war, Chavez holding back supply etc etc etc you name it the market fears it.
I believe someone said that some where in the range of 50 cents a gallon is because of this 'fear factor'.
If peace broke out in Iraq, the Israel-Palestinian situation ended and the war on terror ended tomorrow the price of gas would drop quite a bit.

Why does the left blame Bush when the price of gas goes up, but does not give him credit when the price goes down?

"The price of gas is up, Bush should do something about it"
"The price of gas is down, Bush is just manipulating the market for his advantage."

 

[umbrella39]

Talking points are out already? That was quick.

 

[trenchfoot]

interesting read on how the feds help big oil and other related stuff

i got wind of a seminar that the author is going to present here in the land of aloha and while checking out his bio to see if going to the seminar was worth the effort i ran into this little piece. the blue chapter links provides an online read of his book.

i thought it was pertinent to this thread so i'm posting it here.

imho i think there's some truth to what he's got to say.

 

[ntdz]

Originally posted by: Frackal
The timing of this was interesting to me too. I'm essentially a noob on the intricacies of the energy industry and markets, but I did find it curious. Then I heard Clinton make this comment today:

"[It's interesting that oil prices are coming down so close to the election when they told us they couldn't come down until more and more refineries were built]"

Apparently you haven't looked at oil trends and what happens after labor day. Take your tinfoil hat off.

 

[myocardia]

I find it hard to believe that I'm the only person who is mentioning the fact that the U.S. oil companies got a $100 Billion tax break a few years back, then were able to gouge the American public for what 2 years now, with nothing being done about it by any government agency.

Now, miraculously, right before the election, where it looks like quite a few Republican incumbents might have a very hard time holding on to their seats, predominantly because of the high price of gasoline, gas prices plummet. Hmmm, that one's really hard for me to figure out.[/sarcasm]

 

[trenchfoot]

i'll go middle of the road on this one and call it this way:

the seasonal fluctuations are a reality and must be factored into the mix. however, the price of gasoline wouldn't have gotten as low as it has and maybe even lower before the elections in november had it not been a republican/big business/big oil advantage for it to be that way.

 

[GroundedSailor]

Originally posted by: bobdelt

Originally posted by: GroundedSailor

Originally posted by: zephyrprime
Have you noticed that gasoline prices have fallen much faster than oil prices? Gasoline prices where I am have fallen 24% while crude oil has only fallen 19%. Since gasoline has several additional costs to it that haven't changed (refining costs, taxes), the price of gasoline should fall slower than oil.

There's been talk on inverstment boards that they just ran out of storage to stockpile crude so they had to sell it. That's a unsubstantiated rumor though.

You're right. High oil stockpiles are part of the reason why they are dropping now. For quite a while oil prices have been in Contango . Now that storage is getting full, oil has to be sold directly.

Here an opinion on the oil futures:
http://www.econbrowser.com/archives/2006/04/contango_specul.html

Here's a simpler explanation;
http://www.npr.org/templates/story/story.php?storyId=5705263

Its not that simple. Keep in mind companies do other things, like hedge their investments.

Agreed. Which is why I said contango was part of the reason. Less jittery markets and the apparent lack of problems (affecting oil supply) with Iran Kenya etc. has taken some of the speculation out of the market. Hence the lower prices.

Yes companies do hedge their investments but not everyone can be a winner. They do get it wrong at times and pay the price. One mans gain is another mans pain.

 

[XZeroII]

Originally posted by: Frackal
Ahh come on, no one here who's followed my posts is going to accuse me of being an anti-Bush partisan, I just found it interesting that Bill Clinton would make that comment. Maybe he was just bullshittin', or maybe he has an understanding that others do not. The other reason I found it relevant was because I watched some pollsters talking about how gasoline prices were a helping factor in Bush's recent bounce in the polls

There's a reason why people called him Slick Willie. And it wasn't because of his willie, if you know what I mean.

 

[conjur]

Originally posted by: XZeroII

Originally posted by: Frackal
Ahh come on, no one here who's followed my posts is going to accuse me of being an anti-Bush partisan, I just found it interesting that Bill Clinton would make that comment. Maybe he was just bullshittin', or maybe he has an understanding that others do not. The other reason I found it relevant was because I watched some pollsters talking about how gasoline prices were a helping factor in Bush's recent bounce in the polls

There's a reason why people called him Slick Willie. And it wasn't because of his willie, if you know what I mean.

And that reason is?


BTW, congrats on Lifer. :beer::beer:

 

[ProfJohn]

Originally posted by: tweaker2
i'll go middle of the road on this one and call it this way:

the seasonal fluctuations are a reality and must be factored into the mix. however, the price of gasoline wouldn't have gotten as low as it has and maybe even lower before the elections in november had it not been a republican/big business/big oil advantage for it to be that way.

Make sure you send straighttalker your address so he can mail you your official tinfoil hat.

How do the US companies manipulate the WORLD oil price?

Oil is freely traded on the world market. In order to manipulate that market you would need to control insane amounts of the world?s production, maybe all the US companies together could do it. But do you not think that if that was the case someone would blow the whistle sooner or later ala Enron?
Oil Execs might be greedy, but I don't think they are willing to go to jail in order to help out Bush.

Interestingly in constant dollars the price of oil is still below the all time high of 1981ish.

 

[trenchfoot]

How do the US companies manipulate the WORLD oil price?

umm, you're posting about oil and i'm posting about gas. i'm sorry if you think i meant otherwise, as the OP is abut oil.

but, seeing as if i'm on that subject, i think US refiners have a huge influence over the price of gasoline sold in the US. for example, over the last couple/few decades they have shut perfectly operational refineries down to restrict the supply of oil related products which could do nothing other than to increase the cost of gas at the pumps, and to show how much of a sense of humor the refiners have, they blamed the environmentalists for the shut-downs. a whole bunch of people wearing tinfiol hats believed the refiners and the refiners are laughing especially hard at them for buying in to that prank of theirs.

edit - addendum.

 

[Strk]

Originally posted by: ProfJohn

Originally posted by: tweaker2
i'll go middle of the road on this one and call it this way:

the seasonal fluctuations are a reality and must be factored into the mix. however, the price of gasoline wouldn't have gotten as low as it has and maybe even lower before the elections in november had it not been a republican/big business/big oil advantage for it to be that way.

Make sure you send straighttalker your address so he can mail you your official tinfoil hat.

How do the US companies manipulate the WORLD oil price?

Oil is freely traded on the world market. In order to manipulate that market you would need to control insane amounts of the world?s production, maybe all the US companies together could do it. But do you not think that if that was the case someone would blow the whistle sooner or later ala Enron?
Oil Execs might be greedy, but I don't think they are willing to go to jail in order to help out Bush.

Interestingly in constant dollars the price of oil is still below the all time high of 1981ish.

When adjusted for inflation, wasn't the peak around $70 or $80?

 

[bobdelt]

Originally posted by: tweaker2

How do the US companies manipulate the WORLD oil price?

umm, you're posting about oil and i'm posting about gas. i'm sorry if you think i meant otherwise, as the OP is abut oil.

but, seeing as if i'm on that subject, i think US refiners have a huge influence over the price of gasoline sold in the US. for example, over the last couple/few decades they have shut perfectly operational refineries down to restrict the supply of oil related products which could do nothing other than to increase the cost of gas at the pumps, and to show how much of a sense of humor the refiners have, they blamed the environmentalists for the shut-downs. a whole bunch of people wearing tinfiol hats believed the refiners and the refiners are laughing especially hard at them for buying in to that prank of theirs.

edit - addendum.

And they do this for political reasons?

 

[blackangst1]

Im amazed at how many people think the president of the USA can manipulate a commodity traded worldwide. Amazing. Now, if we were a a member of OPEC, possibly. But as a consumer country? No way. You do know that gold is at an all time high right? Is Bush manipulating the gold market too? How about lumber? Diamonds?


Edit: grammar

 

[trenchfoot]

And they do this for political reasons?

imho, politics and profits have a symbiotic relationship that's tighter than the relationship between george bush and the house of saud.

hope that answered your question, as i just got up and haven't had my morning jp-10 yet.