Idea for stabilizing gas/oil prices...

[matt0611]

Oil prices are rising because of a combination of fear of disruption of supply in the middle east and the decline in the dollars value.

 

[dmcowen674]

Claiming it is peak oil is bullshit, especially since demand hasn't skyrocketed since the recent lows, nor has the USD depreciated that much.

Birol said growth in worldwide oil demand is outstripping growth in new supplies by 1 million barrels a day per year.
=============================================
So this head of an official agency is lying and you are not?

This is rich

 

[Hayabusa Rider]

How about we recognize that oil produced on public land is a public resource and that we do with oil what we do with a whole host of other services. We bid out then pay on a cost plus fee basis. Of course that only applies to domestic sources, but since it would be a direct injection into the US consumer market the price doesn't vary.

 

[WHAMPOM]

The recent price hikes in gas and oil have been mainly due to Wall Street speculators. There has not been a decrease in supply or increase in worldwide demand to justify the recent price spikes. This has been a big problem especially in the last 10 years.

Oil and gas contracts can only be purchased by the consumers of these commodities. If you purchase a contract you must take delivery of the product. All gas/oil contract purchasers will be registered as a legal consumer.

Example: an airline purchases a fuel contract for 1,000,000 gal of fuel, they must take delivery of the product. Delivery can be in stages but they must accept. If an airline wants to take a gamble on purchasing fuel for the next 5 years they can. But they must take delivery.

If an airline has a reason they need to sell off part of their contract they can only sell to other registered consumers. Also portions of contracts can only be resold once.

Traders will no longer drive up the price of oil/gas by speculating. The commodities market can start gearing themselves to servicing the consumers of commodities not paper pushers.

Heard this a few days ago. Like the idea. What do you think? Good idea, bad idea, flaws, improvments?

Why not undo the Republican legislation that made oil/gas speculation secret?

 

[LegendKiller]

Oil prices are rising because of a combination of fear of disruption of supply in the middle east and the decline in the dollars value.

The dollar's decline has minimal impact since oil has gone up in *ALL* currencies.

 

[LegendKiller]

Birol said growth in worldwide oil demand is outstripping growth in new supplies by 1 million barrels a day per year.
=============================================
So this head of an official agency is lying and you are not?

This is rich

What "official" agency? The IEA? Please. If this guy had said something you disagreed with you'd be crying that he was on the Republican's payroll.

 

[glenn1]

It is a huge part on speculation.

Okay, I'll play along just to illustrate why you're wrong. For sake of argument, I'll stipulate that speculators are completely 100% responsible for the increase in oil futures prices and those futures are artificially high. Even with that being said, how do you explain that the spot market for oil is higher than futures right now? By definition, that means that "speculators" are betting that oil prices are going DOWN in the future and their sales are moving the price to reflect this.

 

[desy]

It still isn't driven predominantly by speculation

http://www.consumerenergyreport.com/2011/03/30/debunking-five-myths-about-gas-prices/

Sorry bout that this should work

My favourite current article about oil pricing and the 5 prevelant myths

1.Fighting in Libya is sending gas prices higher.
2.Tapping the Strategic Petroleum Reserve is a smart way to reduce gas prices.
3.Oil companies produce less in the spring to make gas prices increase.
4.The Obama administration is driving up gas prices.
5.Americans can’t live without cheap gas.

 

[alkemyst]

link fail.

However; point #5 is very real for many people. Unfortunately more or less due to their own poor choices of vehicles.

I could afford it if gas even doubled or more...would I like it no, would there people be unable to afford $8/gallon gas; DEFINITELY.

 

[matt0611]

The dollar's decline has minimal impact since oil has gone up in *ALL* currencies.

Many not as much as the dollar has, since the dollar has lost value against many currencies. The dollar index is at about a 3 year low.

Most central banks are printing and inflating their currencies right now as well.

If the dollar is losing value against other currencies, the price of gas in dollars is going up even further in USD than they are.

For instance, in the past two months crude has gone from $101 to $113 in US dollars, in Austrialian dollars it has gone from $100 AUD to $102 AUD, in Swiss Francs it has gone from 92 to 94.5, in Canadian dollars it has gone from $100 to $107.

 

[JS80]

Okay, I'll play along just to illustrate why you're wrong. For sake of argument, I'll stipulate that speculators are completely 100% responsible for the increase in oil futures prices and those futures are artificially high. Even with that being said, how do you explain that the spot market for oil is higher than futures right now? By definition, that means that "speculators" are betting that oil prices are going DOWN in the future and their sales are moving the price to reflect this.

Your theory is sound for elastic goods, but oil is relatively inelastic so speculators and cartels can absolutely own the market and magnify the price.

Now that is not to say I believe restricting trading (i.e. reducing leverage) in oil futures will bring down prices. Greedy humans are clever - they will find ways to work around it, or create a market outside the bounds of US law.

The best way to play this problem was to ramp up domestic production onshore and offshore 10 years ago. Even if prices don't/didn't come down, it would have generated GDP, tax revenue, reduced trade deficit, etc.

 

[wuliheron]

It still isn't driven predominantly by speculation

http://www.consumerenergyreport.com/2011/03/30/debunking-five-myths-about-gas-prices/

Sorry bout that this should work

My favourite current article about oil pricing and the 5 prevelant myths

1.Fighting in Libya is sending gas prices higher.
2.Tapping the Strategic Petroleum Reserve is a smart way to reduce gas prices.
3.Oil companies produce less in the spring to make gas prices increase.
4.The Obama administration is driving up gas prices.
5.Americans can’t live without cheap gas.

Who cares about reality? This is America son and we need someone to blame other then Joe Sixpack driving his humvee, buying cheap imports, and letting the banks and government get away with anything they damn well please. Its all about freedom baby.

 

[mrkun]

http://www.time.com/time/business/article/0,8599,1834888-1,00.html

 

[Darwin333]

The recent price hikes in gas and oil have been mainly due to Wall Street speculators. There has not been a decrease in supply or increase in worldwide demand to justify the recent price spikes. This has been a big problem especially in the last 10 years.

Oil and gas contracts can only be purchased by the consumers of these commodities. If you purchase a contract you must take delivery of the product. All gas/oil contract purchasers will be registered as a legal consumer.

Example: an airline purchases a fuel contract for 1,000,000 gal of fuel, they must take delivery of the product. Delivery can be in stages but they must accept. If an airline wants to take a gamble on purchasing fuel for the next 5 years they can. But they must take delivery.

If an airline has a reason they need to sell off part of their contract they can only sell to other registered consumers. Also portions of contracts can only be resold once.

Traders will no longer drive up the price of oil/gas by speculating. The commodities market can start gearing themselves to servicing the consumers of commodities not paper pushers.

Heard this a few days ago. Like the idea. What do you think? Good idea, bad idea, flaws, improvments?

What are you going to do about the itsy bitty problem that we don't produce most of the oil that we consume yet what we consume IS priced in our dollars and this?

 

[Darwin333]

The dollar's decline has minimal impact since oil has gone up in *ALL* currencies.

Not nearly as much as the USD though. All commodities have been on a tear upward, gas prices are simply more in our face and we import most of it.

Why are commodities on a tear upward, the market on a tear upward, and bonds at historical lows (people piratically losing money in them) all at the same time? Is this normal?

 

[Doppel]

So basically make it non-invest-able as a way to simply make money? I have no problem with that.

 

[alkemyst]

http://www.time.com/time/business/article/0,8599,1834888-1,00.html

The brainiacs here aren't buying that playing in the oil futures market affects pricing.

 

[alkemyst]

So basically make it non-invest-able as a way to simply make money? I have no problem with that.

IMHO the commodities market should remain tradable since we are a capitalist country.

However, I do not believe buying on credit or margin should be allowed. 100% of the investment should be required.

 

[Craig234]

IMHO the commodities market should remain tradable since we are a capitalist country.

However, I do not believe buying on credit or margin should be allowed. 100% of the investment should be required.

It's better to base a policy on more than ideology. "Hey there's this ism that sounds good, so I support forcing a market to act according do it, without having actual reasons".

 

[desy]

So I read it
Its a possible explanation of market manipulation put forth by academics, not geologists or real market traders. .. It doesnt say this is what is going on but how the market could be manupulated in other words, a guess...

The articles that seem to have the most credibility that I read don't deny speculation is a component but the reason it exists is based on business fundamentals , not a pump and dump in penny stock
$ devaluation, supply disruption etc all CUMULATIVELY increase prices

 

[Infohawk]

However, I do not believe buying on credit or margin should be allowed. 100% of the investment should be required.

Why not? Lending is a part of a market economy.

 

[alkemyst]

It's better to base a policy on more than ideology. "Hey there's this ism that sounds good, so I support forcing a market to act according do it, without having actual reasons".

I am not sure what you mean by this. As one that invests though, gambling like this would never fly in Vegas...if it did, I'd be calling in all my PTO for a gambling spree.

 

[alkemyst]

Why not? Lending is a part of a market economy.

I would be all for someone borrowing the funds. Not using a few thousand dollars to leverage 10-20x that.

 

[LegendKiller]

Many not as much as the dollar has, since the dollar has lost value against many currencies. The dollar index is at about a 3 year low.

Most central banks are printing and inflating their currencies right now as well.

If the dollar is losing value against other currencies, the price of gas in dollars is going up even further in USD than they are.

For instance, in the past two months crude has gone from $101 to $113 in US dollars, in Austrialian dollars it has gone from $100 AUD to $102 AUD, in Swiss Francs it has gone from 92 to 94.5, in Canadian dollars it has gone from $100 to $107.

It's at a low from the bounce from the credit crisis but isn't too low compared to pre-bubble. Sure, the price is going up, but the point is that it's going up everywhere. Some currencies less than others. The AUD is in a bubble, Francs less so, CAD is more reflective of reality but is still a bit bubblicious.

 

[LegendKiller]

The brainiacs here aren't buying that playing in the oil futures market affects pricing.

It's because they don't understand how the spot market has to take into account the futures for delivery, ex storage costs and PV, which causes a feedback from futures into spot, just as spot causes derivative effects into futures.

It's not like the futures market is completely isolated from spot. The more "paper" demand created by futures, the more physicals demand needs to be potentially delivered, or the more people believe that prices will continue to go up.

What's even more amazing is that the people opining on such effects are ones who aren't even remotely involved in the finance world and are even, often, the same people who decry "banksters", yet aren't willing to acknowledge those same effects in this market.

If it wasn't speculation and was more attributable to the dollar, then how do they explain 2007/2008, sure the dollar was down somewhat then, but they just simply cannot explain a 2-3x escalation in price and a corresponding decline, all within months, without an underlying decline in demand, increase in supply, or movement in currencies.

If that isn't a sure sign of financial boom/bust, there isn't one. Yet these idiots keep parroting the same bullshit.

It's amazing.