The Reality Behind High Fuel Prices

[jaideeguy]

I was forewarded the following link that actually makes some sense as I've been thinking along the same lines for the last couple of years.

Addressing Skyrocketing Oil Prices by Restoring Fair and Open Energy Markets

Every time you buy products such as food or gas, you are impacted by unregulated, secretive and often foreign commodities futures markets. Speculators in these markets are increasingly buying and selling commodities such as oil to sell again, rather than to use. As largely unregulated speculators pocket billions of dollars at your expense, the price of commodities has increased out of proportion to marketplace demands.

to read more.. http://www.stopoilspeculationnow.com/

please read it and pass along to friends.

[Dustoff]

I was forewarded the following link that actually makes some sense as I've been thinking along the same lines for the last couple of years.

Addressing Skyrocketing Oil Prices by Restoring Fair and Open Energy Markets

Every time you buy products such as food or gas, you are impacted by unregulated, secretive and often foreign commodities futures markets. Speculators in these markets are increasingly buying and selling commodities such as oil to sell again, rather than to use. As largely unregulated speculators pocket billions of dollars at your expense, the price of commodities has increased out of proportion to marketplace demands.

to read more.. http://www.stopoilspeculationnow.com/

please read it and pass along to friends.

An excellent post and speculation is indeed a factor in high fuel prices but it is far, far more complex than that and you may wish to do some further research. If only it were that simple...

[jaideeguy]

Hi Dustoff, I'm not implying that speculation is the only factor contributing to massive profiteering on the price of oil [and other commodities], but, as the SOS link implies....speculation on futures needs some regulation and transparency. It would be interesting to see who is actually 'in the middle' and getting rich while we are getting poor.

[lannarebirth]

My observation of commodities futures markets is, that what appears to be going on is much the same as what went on near the top of the tech stock bubble. During the Tech bubble, the breadth of the broader market indicated it had been selling off for 2 years prior to the "bubble" bursting. In fact most activity became focused in a narrower range of stocks. Same goes for commodities. You'll note many commodities have corrected substantially and will likely fall much further, while everyone's attention is focused on only one segment of that market. They keep doing it over and over and over again.

[lannarebirth]

Hi Dustoff, I'm not implying that speculation is the only factor contributing to massive profiteering on the price of oil [and other commodities], but, as the SOS link implies....speculation on futures needs some regulation and transparency. It would be interesting to see who is actually 'in the middle' and getting rich while we are getting poor.

Aside from some speculators who get rich (while others get wiped out) it is the mony handlers that get rich. The people you give your money to "to put to work". They'll buy sick buffaloes for you if that's what's selling. All they want is their 2% for touching the money.

[Pakboong]

IMHO the big investors in the commodity futures are countries holding dollars in reserve and rather than watch the dollar simply fall, they hedge by investing an amount equal to their dollar holding in their own currency. They of course, choose dollar sensitive commodities such as oil. The relationship between the dollar and oil minimizes their risk. They can't lose both ways.

[meandwi]

The prices we pay today is nothing compared to what our grandchildren will pay in the future. Countries are getting what they can now because they will eventually run out.

After they run out, THEN America will start drilling and exporting it's own. Just imagine the price then!

Just my simple thought on this.

meandwi

[tw25rw]

This is much what I've been thinking. Much like the share markets, the various govts could talk the price down by threatening to take action even if they don't follow through with it.

If necessary, the govts could add a fee to each oil transaction which is redeemed as a tax rebate when they actually take delivery of the oil.

[lannarebirth]

IMHO the big investors in the commodity futures are countries holding dollars in reserve and rather than watch the dollar simply fall, they hedge by investing an amount equal to their dollar holding in their own currency. They of course, choose dollar sensitive commodities such as oil. The relationship between the dollar and oil minimizes their risk. They can't lose both ways.

I think you're wrong. I think the big investors are millions of wage earners that heard the hype and decided to "diversify" their retirement funds into what is being sold as a new "asset class". There are hedge funnds in there too, but the hedge funds will buy put options contracts on their futures positions just prior to selling. They'll be earning both ways. It will be Jonn Q. Public that will provide the liquidity to let them out with their monthly "allocation" and will be left holding the bag as usual.

[bendix]

Nonsense. Oil prices are high because of the New World Order, a highly secretive group of bankers, royalists and jews who want to reduce populations and implant chips in our skulls.

Or, at least, that's what Beacher says.

[Pakboong]

IMHO the big investors in the commodity futures are countries holding dollars in reserve and rather than watch the dollar simply fall, they hedge by investing an amount equal to their dollar holding in their own currency. They of course, choose dollar sensitive commodities such as oil. The relationship between the dollar and oil minimizes their risk. They can't lose both ways.

I think you're wrong. I think the big investors are millions of wage earners that heard the hype and decided to "diversify" their retirement funds into what is being sold as a new "asset class". There are hedge funnds in there too, but the hedge funds will buy put options contracts on their futures positions just prior to selling. They'll be earning both ways. It will be Jonn Q. Public that will provide the liquidity to let them out with their monthly "allocation" and will be left holding the bag as usual.

You may be correct, however, the number for all the dollar sensitive commodities is in the trillions now. Oil alone is pressing $300 billion. These are big numbers for John Q. The investment banks are investing their borrowed money in equities in order to seed the clouds for John Q. John Q. is in bad shape right now and that kind of money is just not that likely. Large managed pensions funds I do agree with but that number again is not big enough to move the markets that much.

[Ulysses G.]

Nonsense. Oil prices are high because of the New World Order, a highly secretive group of bankers, royalists and jews who want to reduce populations and implant chips in our skulls.

Who is the nut who says that Giant lizards really control everything?

[meom]

Nonsense. Oil prices are high because of the New World Order, a highly secretive group of bankers, royalists and jews who want to reduce populations and implant chips in our skulls.

Or, at least, that's what Beacher says.

Except for the chip implants he has a point with the joos controlling the hedgefunds, the (saudi) royalists controlling the oil and some ex-nazi swiss bankers banking the dough.

[lannarebirth]

Yeah, we're talking about a lot of money that has no business in futures markets. That's not what these markets were designed for. They were designed as hedging markets between producers and commidities purchasers.

http://www.bloggingstocks.com/2008/02/28/c...he-u-s-economy/

It's easy to see that the demand that exists is not for commodities but for commodity derivative instruments.

Edited July 16, 2008 by lannarebirth

[Pakboong]

Yeah, we're talking about a lot of money that has no business in futures markets. That's not what these markets were designed for. They were designed as hedging markets between producers and commidities purchasers.

http://www.bloggingstocks.com/2008/02/28/c...he-u-s-economy/

It's easy to see that the demand that exists is not for commodities but for commodity derivative instruments.

I don't disagree with you. I am a novice at this stuff and my opinions are based upon what makes sense to me in a macro sense. I know for example that the largest parimutual pool in the world is the currency market. The handle each day is roughly $2 trillion. Lots of countries move currency in big chunks. The dollars are in a tough spot and most countries are stuck with them so they have to hedge their losses. MHO only.

[lannarebirth]

Yeah, we're talking about a lot of money that has no business in futures markets. That's not what these markets were designed for. They were designed as hedging markets between producers and commidities purchasers.

http://www.bloggingstocks.com/2008/02/28/c...he-u-s-economy/

It's easy to see that the demand that exists is not for commodities but for commodity derivative instruments.

I don't disagree with you. I am a novice at this stuff and my opinions are based upon what makes sense to me in a macro sense. I know for example that the largest parimutual pool in the world is the currency market. The handle each day is roughly $2 trillion. Lots of countries move currency in big chunks. The dollars are in a tough spot and most countries are stuck with them so they have to hedge their losses. MHO only.

Nobody id stuck with dollars. As you say theres a tremendously liquid forexmarket and the USD trades are most liquid of all. In a 1/10 of a second you can convert the USD's you hold to any currency you like with very little slippage.

[stumonster]

Nonsense. Oil prices are high because of the New World Order, a highly secretive group of bankers, royalists and jews who want to reduce populations and implant chips in our skulls.

Who is the nut who says that Giant lizards really control everything?

god

[Pakboong]

Yeah, we're talking about a lot of money that has no business in futures markets. That's not what these markets were designed for. They were designed as hedging markets between producers and commidities purchasers.

http://www.bloggingstocks.com/2008/02/28/c...he-u-s-economy/

It's easy to see that the demand that exists is not for commodities but for commodity derivative instruments.

I don't disagree with you. I am a novice at this stuff and my opinions are based upon what makes sense to me in a macro sense. I know for example that the largest parimutual pool in the world is the currency market. The handle each day is roughly $2 trillion. Lots of countries move currency in big chunks. The dollars are in a tough spot and most countries are stuck with them so they have to hedge their losses. MHO only.

Nobody id stuck with dollars. As you say theres a tremendously liquid forexmarket and the USD trades are most liquid of all. In a 1/10 of a second you can convert the USD's you hold to any currency you like with very little slippage.

I meant stuck with dollars in the sense that they need them to buy certain commodities such as oil. Iraq switched to accepting only euros for oil and look where it got them. Iran is switching this week. Countries have large holdings that have lost as much as 25% of the value. They need them but can't afford to let them fade to nothing.

[palm]

Nonsense. Oil prices are high because of the New World Order, a highly secretive group of bankers, royalists and jews who want to reduce populations and implant chips in our skulls.

Who is the nut who says that Giant lizards really control everything?

David Icke - http://en.wikipedia.org/wiki/David_icke

Well worth a read.

[Naam]

I meant stuck with dollars in the sense that they need them to buy certain commodities such as oil. Iraq switched to accepting only euros for oil and look where it got them. Iran is switching this week. Countries have large holdings that have lost as much as 25% of the value. They need them but can't afford to let them fade to nothing.

Iran is allegedly switching since more than FIVE YEARS whatever, it doesn't matter at all which crude producer accepts which currency for the product. dollars can be converted in seconds and well in advance into any other currency. demanding payment in €UR does not result in any gain. there is also no need at all for any country that imports and therefore buys crude to hold dollars. procedure as stated above, only reverse. please send 10 Baht as PM attachment for my lecturing

[Naam]

Nobody id stuck with dollars. As you say theres a tremendously liquid forexmarket and the USD trades are most liquid of all. In a 1/10 of a second you can convert the USD's you hold to any currency you like with very little slippage.

sorry for overlooking LRB's posting who stated the facts already

[britmaveric]

$10 drop per barrel in 2 days. I'm absolutely convinced smth fishy is a foot.

[astral]

I know I can't beat it, so I am looking for a way to join the Oil Rush.

[MrSnrang]

Nonsense. Oil prices are high because of the New World Order, a highly secretive group of bankers, royalists and jews who want to reduce populations and implant chips in our skulls.

Who is the nut who says that Giant lizards really control everything?

The Space Pope.

[Soutpeel]

I was forewarded the following link that actually makes some sense as I've been thinking along the same lines for the last couple of years.

Addressing Skyrocketing Oil Prices by Restoring Fair and Open Energy Markets

Every time you buy products such as food or gas, you are impacted by unregulated, secretive and often foreign commodities futures markets. Speculators in these markets are increasingly buying and selling commodities such as oil to sell again, rather than to use. As largely unregulated speculators pocket billions of dollars at your expense, the price of commodities has increased out of proportion to marketplace demands.

to read more.. http://www.stopoilspeculationnow.com/

please read it and pass along to friends.

The answer to this question is very simple...the world has hit "peak oil" and there needs to be exploration for new reserves and somebody needs to pay for the exploration, so simply very simply, the oil companies are passing on the cost of their exploration on to the comsumer, hence inflated oil prices.