The Great Oil Price Robbery (Indian story helpful to all)(blogs.economictimes.indiatimes.com)

17 pointsby newaccvor 17 Jahren13 comments

blogs.economictimes.indiatimes.com

The Great Oil Price Robbery (Indian story helpful to all)

http://blogs.economictimes.indiatimes.com/folk-theorem/entry/folk_theorem_the_great_oil

13 comments

three14vor 17 Jahren

I wish someone would explain how this is supposed to work. So, speculators bid up the price of oil from the "natural" price of $30 a barrel to, say, $100 a barrel. Some of the oil now goes to the speculators. A few months or a year or two down the line, the speculators have to sell. It costs them money to store it after they take delivery. Shouldn't the price then fall below the natural $30 a barrel?

I mean, I know there are lots of speculators in the oil market, but even if they're all evil geniuses, how will they manage to consistently raise prices for everyone over the long term? Unless they don't mind hiding away the oil they bought and never reselling.

codedivinevor 17 Jahren

Btw aloo=potato and bhindi is another vegetable whose english name i dont remember currently.

sharpnvor 17 Jahren

okra

frostyvor 17 Jahren

bhindi = lady finger

asdlfj2sd33vor 17 Jahren

There is a glut of credit in the world. Free trade and huge pools of untapped labor in the developing world have kept inflation in consumer goods and wages to a minimum.

Not so when it comes to investments. There are thousands of hedge funds who charge 2/20, that's 2% even if they lose money. Who would give them money? Lots of people apparently, there must be pent up demand.

And all that credit has to go somewhere, commodities, real estate, stuff like that.

But commodities, and even real estate are volatile, so there's a lot of speculation. And what's the benefit of this moneyed activity? There is none.

apuvor 17 Jahren

Matt Taibbi covered this in great detail:

http://www.rollingstone.com/politics/story/29127316/the_grea...

pmichaudvor 17 Jahren

This is sort of what was happening back when gas was $4 in the states. It turns out that all those wall street players had a sort of racket going where each was buying from the last in a long chain.

Those firms collapsed in the crash, their trading stopped, and gas went back down to >$2.

dmmvor 17 Jahren

I'm almost certain that symbol means greater-than.

pmichaudvor 17 Jahren

Yeah, oops.

modelessvor 17 Jahren

So his argument is that we should ignore all possible risks to our oil supply and let everyone have cheap oil? That works great until one of those risks becomes reality, the price of oil instantly skyrockets amid dire shortages, and we don't have any alternatives because oil was cheaper than all of them.

I hope that none of the people railing against speculators are also environmentalists, because oil speculators should be an environmentalist's best friend: nothing could possibly promote alternative energy better than high oil prices.

knownvor 17 Jahren

It depends on Demand, Supply and Distribution of Cash.

    Demand     	Cash       	Supply
    Y			Y		Y (USA aka Consumerism)
    Y			Y		N (Dubai)
    Y			N		N (India)
    Y			N		Y (Inflation Under Control)
    N			N		N (Chaos as in Africa)
    N			Y		Y (Deflation as in Japan, Germany)
    N			N		Y (Inefficient Govt and Society)
    N			Y		N (Inflation as in Ethopia)

knownvor 17 Jahren

Futures trading = http://en.wikipedia.org/wiki/Liar%27s_poker

TweedHeadsvor 17 Jahren

Everytime hurricane season comes, they start their red alert propaganda on the news alarming people about how the oil supply from the gulf will be reduced therefore oil prices will go up.

After hurricane season, prices should go down, but no, it never happens.

Then on winter oil prices will go up again because you know, heating consumption increases, but it never goes down when the scorching summer arrives.

Then the middle east.

Then chavez.

Then... [insert alarmist propaganda here]