Current Oil Price

RevdTess · Post by **RevdTess** » 27 Jun 2008, 14:10

Mitch wrote: How would they "curb" it? Suspend trading for awhile? What else could they do?

Typically impose maximum position sizes, which especially impacts 'long-only' pension funds. There are so many loopholes though. People might look for related contracts or commodities on exchanges in other less-regulated countries. And since no-one really knows to what extent speculation (or the expectation of speculation) is driving prices, it's pretty much impossible to predict the impact of any moves the CFTC takes.

biffvernon · Post by **biffvernon** » 27 Jun 2008, 14:36

Isn't that attempted legislation either bluff calling or plain stupid? If speculation was an issue and new rules stopped it wouldnt traders just trade elsewhere?
Take a $4 US gallon - isn't it pretty plain to see how much is retailer profit, distributer profit, refinery profit, producer profit etc. and not many cents left over for the mysterious speculator?

Mitch · Post by **Mitch** » 27 Jun 2008, 14:45

The 2 pm opening was indeed very interesting - absolutely nothing happend except the volumes went up a bit. It's easier picking a winning lotto number, or playing against world champion chess, than trying to out guess this lot!

RevdTess · Post by **RevdTess** » 27 Jun 2008, 15:07

biffvernon wrote:Take a $4 US gallon - isn't it pretty plain to see how much is retailer profit, distributer profit, refinery profit, producer profit etc. and not many cents left over for the mysterious speculator?

Most of that $4 though is the crude oil cost ($140/bbl = $3.33/US Gal) It's primarily around the crude price that the speculation occurs.

syberberg · Post by **syberberg** » 27 Jun 2008, 15:30

Tess wrote:
biffvernon wrote:Take a $4 US gallon - isn't it pretty plain to see how much is retailer profit, distributer profit, refinery profit, producer profit etc. and not many cents left over for the mysterious speculator?
Most of that $4 though is the crude oil cost ($140/bbl = $3.33/US Gal) It's primarily around the crude price that the speculation occurs.

Well that puts the US market well and truly into perspective. $0.67 per gal sold. Not much of a margin to cover all the costs to get fuel to retail. And it's only what, 7gal from the barrel that ends up as diesel?

I wonder how much they get for the other products from refining? Anyone got any figures on how much all the other refined products are sold for?

skeptik · Post by **skeptik** » 27 Jun 2008, 15:58

Vortex wrote:
Tess wrote:
Vortex wrote:Tess, what do your people think of all this?
Just watching the price signals one day at a time.
I tried to extract some informons from that statement - but, no, couldn't find any.

I think Tess's reply is a polite way of saying nobody knows what the F--k is going on.

On the assumption that the Chinese leadership will not want to rock the boat (either domestically or internationally) until after their Sporting Spectacular in Beijing is over , I'm staying in commodities till August. A nice little earner so far this year. Then I'm out totally to cash at least until the new US president has taken over and things have settled down a bit - if they do! What goes up can come down, even oil if there's a major global recession. No idea, really, and neither have the economists. For 2009, Roubini is pointing up, EIA is pointing down.

Vortex · Post by **Vortex** » 27 Jun 2008, 16:00

skeptik wrote:
Vortex wrote:
Tess wrote: Just watching the price signals one day at a time.
I tried to extract some informons from that statement - but, no, couldn't find any.
I think Tess's reply is a polite way of saying nobody knows what the **** is going on.

Quis custodiet ipsos custodes?

RevdTess · Post by **RevdTess** » 27 Jun 2008, 16:40

skeptik wrote: I think Tess's reply is a polite way of saying nobody knows what the **** is going on.

I dont think that's true at all.

The problem is not that we dont know what's going on, but that in a complex system it's extremely difficult to predict which part of the system will run up against a constraint next. Therefore you play everything short term and wait for a price signal from currencies, equities, refineries or crude (amongst others) to tell us what direction is next.

rs · Post by rs » 27 Jun 2008, 16:41

interesting take on what is driving the oil price today on Kunstler's Daily Grunt:

http://www.kunstler.com/

RevdTess · Post by **RevdTess** » 27 Jun 2008, 16:52

rs wrote:interesting take on what is driving the oil price today on Kunstler's Daily Grunt:

http://www.kunstler.com/

Hmm, you dont mean that letter from George Abert do you? The first two paragraphs are so full ignorance and misunderstanding I wouldn't even know where to start. Or rather I would know where to start but I'd be writing for an hour and still finding reasons why it's rubbish.

skeptik · Post by **skeptik** » 27 Jun 2008, 17:03

Tess wrote:
skeptik wrote: I think Tess's reply is a polite way of saying nobody knows what the **** is going on.
I dont think that's true at all.

The problem is not that we dont know what's going on, but that in a complex system it's extremely difficult to predict which part of the system will run up against a constraint next.

With the greatest of respect, I think you just contradicted yourself and said what I said, in so many words.

Yup. Complex systems. They are a bugger.

RevdTess · Post by **RevdTess** » 27 Jun 2008, 17:11

How did I contradict myself? I can explain the price moves as they happen. I can't however tell you what the next one will be until I see a price trigger somewhere else in some other market. It's not true to say that we don't know what's going on. We just dont know which part of the system will break next until we see it break. And then we know how crude prices will move, briefly, until they catch up.

rs · Post by rs » 27 Jun 2008, 17:13

Tess wrote:...where to start but I'd be writing for an hour and still finding reasons why it's rubbish.

How about a couple of paragraphs?

Seriously though, what is your take on it?

RevdTess · Post by **RevdTess** » 27 Jun 2008, 17:14

rs wrote:
Tess wrote:...where to start but I'd be writing for an hour and still finding reasons why it's rubbish.
How about a couple of paragraphs? Seriously though, what is your take on it?

My take on it is that the guy who wrote it has no understanding of the crude oil market and should be ignored... Really, I have no patience for it - complete waste of time.

Vortex · Post by **Vortex** » 27 Jun 2008, 17:15

Oops, that was close. I nearly posted a stupid message ...