Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
By the way, the apparent 28˘ reduction for the July [Unleaded Gasoline] contracts hasn't shown up at the pump yet. _________________ --------------------------------
| Whose reality is this anyway!? |
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(-------< Temet Nosce >-------)
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Last edited by EnviroEngr on Mon Jun 07, 2004 2:49 pm; edited 1 time in total
Joined: Apr 04, 2004 Posts: 579 Location: Western US
Posted: Mon Jun 07, 2004 12:26 pm Post subject:
I noticed that over the last couple of months. For instance, while the oil companies etc were grumbling about a lack of American refinery capacity oil continued to surge. My take on it is that if there is a refinery shortfall then gas is expensive while oil is cheap, Maybe it just took the market that long to adjust, regaurdless the oil companies are making the big bucks now.
The American Petroleum Institute says that profit margins for oil and natural gas companies averaged 6.9 percent in the first quarter of 2004, compared with an average of 7.5 percent for all U.S. industry.
Joined: May 24, 2004 Posts: 1938 Location: Richland Center, Wisconsin
Posted: Mon Jun 07, 2004 12:44 pm Post subject: Charts, etc.
The Exchange also has its own facility for data viewing:
http://www.nymex.com/jsp/markets/lsco_fut_cso.jsp <-- for Crude;
http://www.nymex.com/jsp/markets/gas_fut_cso.jsp <-- for NY Harbor Unleaded.
To view the graphs, you need JavaScript running and working right. _________________ --------------------------------
| Whose reality is this anyway!? |
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(-------< Temet Nosce >-------)
____________________________
Joined: May 24, 2004 Posts: 1938 Location: Richland Center, Wisconsin
Posted: Mon Jun 07, 2004 12:58 pm Post subject: An Explanation?
As if by magic, the following appears in the News:
Oil prices continue decline as supply jitters ease
44 minutes ago
LONDON (AFP) - Oil prices slipped further away from recent peaks as supply worries abated in the wake of last week's pledge by OPEC (news - web sites) producers to boost output.
The price of benchmark Brent North Sea crude oil for July delivery fell by 19 cents to 35.48 dollars per barrel in late trading in London, off its lows of the day.
New York's reference light sweet crude July contract dropped 14 cents to 38.35 dollars per barrel in early deals.
The contract has fallen by over four dollars a barrel from a record high level of 42.45 dollars a barrel seen in electronic trading on June 1.
World oil prices have come off the boil following an agreement by the Organization of Petroleum Exporting Countries in Beirut last week to raise its daily production ceiling of 23.5 million barrels by 2.0 million next month and by another 500,000 barrels in August.
Prices surged last week after suspected Islamist militants killed 22 people, many of them foreigners, in a shooting rampage and hostage-taking drama in the eastern oil city of Al-Khobar.
Oil markets remained worried about the risk of terrorists disrupting supplies from the world's biggest exporter, especially with gasoline demand set to soar during the peak US "summer driving season".
"The terrorist issue is still very much with us, and there are still some concerns about the driving season in the States," said Prudential Bache broker Tony Machacek.
An Irish cameraman was shot dead and a British BBC correspondent wounded in the latest attack by suspected Islamic extremists in the kingdom, though traders noted the attack had not affected oil production.
In the absence of any disruptions to exports from Saudi Arabia or any other major producers, however, prices could cool further, experts predicted.
"Barring some sort of disastrous supply issue, the next 10 dollar move in oil prices should be down," said Merrill Lynch analyst Michael Rothman.
"OPECs elevated oil output these past couple months should produce well-above normal inventory builds in the near term," he wrote in a note to clients.
Traders shrugged off the threat of a strike in Nigeria, where union officials said over the weekend that the oil producer's white-collar oil union PENGASSAN will next week join junior workers in a bid to disrupt oil exports.
Both Nigeria's main union bodies -- the workers' Nigeria Labour Congress and manager's Trade Union Congress -- have given the government until midnight on Tuesday to bring down petrol prices or face a nationwide general strike.
Nigeria's blue-collar oil union, NUPENG, has already vowed to join the action, potentially threatening supplies from the world's sixth-largest oil producer. _________________ --------------------------------
| Whose reality is this anyway!? |
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(-------< Temet Nosce >-------)
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These are the futures. These are not yet the finalized contracts and may (and probably will) rise before Juli. That's why they don't show up at the pump yet.
The price of oil and gas should be determined by market supply and demand. That was the case to a number of years ago.
Then the interest rates went rock bottom and the stock market collapsed. In order to make money the tech funds started trading in anything that can be traded. Simply put one of the reasons your fuel is so expensive is because your pension fund is "investing" in it. These speculative position's can imbalance the supply/demand-price ratio's.
However I can't see how these funds can ad $13 to the price of a barrel as some suggest.
In the metal markets you can do that. The Hunt brothers cornered the silver market in the 70's by buying a lot of silver and withdrawing it from from the markets. This induced an artificial shortage and the price rose. But where do you leave all the oil tankers you bought?
That something which I haven't able to figure out. What methods are available to force the prices upwards. Maybe someone here knows?
About the news article. Looking at the 6-month trend for crude:
I think it's fair to say that (unless oil drops substantially under $38 and stays there for a few days) the trend upwards is still intact and this can be viewed as a normal correction within that trend.
Wow! I can buy oil for 2010 delivery at less than $30/barrel? Isn't that the deal of the century? Why wouldn't I want to buy a futures contract for about 10,000 barrels right now?
When you believe in peakoil that would make sense.
Investors think about it in this way. When I have $30 and instead of buying these futures I would invest it in something else (commodities, bonds, T-bills etc) it will give me $45 in 2010 (7% annual yield). So the markets expect oil prices around or slightly above $45 in 2010.
The value of these futures is thus determined.
A. By the oil price that buyers expect in the future.
B. By the interest rate and stock market developments that the buyers expect in the future.
I guess that when these future prices start rising a lot it's a sign that the markets really start believing in peak oil.
just one link of several I have seen regarding "terror premium"
This article says $8 a barrel, others have said as much as 33%.
What this basically means to me is that the price of oil will fluctuate a lot based on the news and perceptions.
The overall trend is up though, since none of these fluctuations change the big supply vs demand issues. Only SA, the swing production champion of the world, can do that. /snicker
Joined: May 24, 2004 Posts: 1938 Location: Richland Center, Wisconsin
Posted: Tue Jun 08, 2004 8:28 am Post subject: Delay
There was a lag time of about 1 week but the first increment downwards was 9˘. Unleaded here is now $2.03/gal. Interesting to see for the first time clearly how this all works. A little late in the game, but better late than never.
Should have paid more attention in grade school when we played Stocks & Bonds. I could have picked up the logic of futures. _________________ --------------------------------
| Whose reality is this anyway!? |
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(-------< Temet Nosce >-------)
____________________________
Joined: May 26, 2004 Posts: 309 Location: Ontario, Canada
Posted: Tue Jun 08, 2004 10:13 am Post subject: Re: An Explanation?
Damnnit, I really need a good lesson in economics. _________________ "Our forces are now closer to the center of Baghdad than most American commuters are to their downtown office."
--Defense Secretary Donald Rumsfeld, April 2003
Posted: Tue Jun 08, 2004 11:26 am Post subject: Oil futures at 45
To start your lesson on futures markets, consider the following:
Most of these contracts are bought by the purchasing people in the big petrochemical and refinery joints. They use them to "lock in" the price of their feedstock for a period of time, or assure themselves of feedstock at some known price that they can budget.
So if you are a buyer in one of these places you would have to go in to your boss and tell him "Guess what, I just locked us into a contract for oil at $8 above the current spot price." Based on the last 10 years of oil prices (nice and low) unless the boss is "enlightened" he would have you strung up from the flagpole out in the parking lot while the rest of the office throws tomatoes at you. That's why not higher than it is. Not too many people with deep pockets are ready to take the risk (yet) to lock in this relatively high price.
You are right, though, that this is a place to monitor for funny stuff going on in the market.
If you want to play this, much better to use options. Costs you a little more out of pocket, but much less risk if the price takes a sudden unscientific drop (like the last couple of days).
Joined: May 24, 2004 Posts: 1938 Location: Richland Center, Wisconsin
Posted: Thu Jun 10, 2004 11:55 am Post subject: Unleaded Down
Last night, Unleaded Gasoline - down another 10˘.
NYMEX open at $1.1650
Follow the white rabbit. _________________ --------------------------------
| Whose reality is this anyway!? |
--------------------------------
(-------< Temet Nosce >-------)
____________________________
Smiley: great way of showing how futures work. I didn't think of that before but it makes perfect sense!
Pops: Don't worry about selecting the wrong candidate by accident on the Diebold computer. It intuitively knows which candidate you meant and will make sure you vote 'correctly'.
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