Go Back   TeamTalk > Off Topic > Off Topic Discussion

Reply
 
Thread Tools Display Modes
  #61  
Old 06-24-2008, 05:29 PM
bbymgr's Avatar
bbymgr bbymgr is offline
MC Devotee
 
Join Date: Dec 2007
Boat: 2007 X1, RTP
Location: Lake James Indiana
Posts: 1,448
I'm not sure I understand it exactly Jorski. In your July - August scenerio, what happens to that speculator if the price of oil drops between when he buys the unit of oil in July and sells the unit of oil in August?
__________________
"In conflict, straightforward actions generally lead to engagement, surprising actions generally lead to victory."

Six in, Six out.


2007 MasterCraft X-1, CHARCOAL Black
Reply With Quote
  #62  
Old 06-24-2008, 05:32 PM
JimN's Avatar
JimN JimN is offline
MC Master Poster
 
Join Date: Jul 2004
Posts: 13,268
"The thing is that the market is determining the price!

The thing that causes most of the changes in commodity prices is SUPPLY and DEMAND...not fear and greed!

Speculators actually serve to LOWER prices, despite all of the popular rhetoric out there today. In commodities markets, there are "natural longs", "natural shorts" and "speculators" (also called financial traders)."

This is from one of your earlier posts- How can speculators not be affecting the price of oil when rumors and events that may happen, but haven't yet, cause the price to go up? When I mentioned actual cost being the basis for selling price, this is what I was getting at- speculators aren't dealing with reality, they deal with what might happen. The price of crude went up today because of a Nigerian Oil Worker's Union action but they haven't changed anything to do with production. All that has happened so far, is a limited form of protest, according to the link below.

http://www.thestar.com/Business/article/447694

From Dictionary.com,
speculate:
2. To engage in a course of reasoning often based on inconclusive evidence. See Synonyms at think.
3. To engage in the buying or selling of a commodity with an element of risk on the chance of profit.

I understand the speculators getting a big thrill from this, partially because of the risk/reward thing but for this activity to affect prices globally, I think it's similar to Fantasy Football becoming the real thing and costing all football fans dearly.
Reply With Quote
  #63  
Old 06-24-2008, 05:45 PM
TX.X-30 fan TX.X-30 fan is offline
MC Platinum
 
Join Date: Sep 2006
Boat: mastercraft, X-30, 2004, MCX.
Location: Lake Travis
Posts: 9,588
Futures market traders in oil and gas are making obscene profits on the backs of consumers. Explain it as you will but these guys are driving the price up on a barrel of oil beyond any supply and demand basis.

All of this could have been avoided with production. We have more oil and gas in this country than all the middle east put together, Add shale to the equation and done deal reserves for several hundred years. Shale is not there yet but not far off either technologically speaking.





The technical groundwork may be in place for a fundamental shift in oil shale economics," the Rand Corporation
recently declared. "Advances in thermally conductive in-situ conversion may enable shale-derived oil to be
competitive with crude oil at prices below $40 per barrel. If this becomes the case, oil shale development may soon
occupy a very prominent position in the national energy agenda."

Estimated U.S. oil shale reserves total an astonishing 1.5 trillion barrels of oil - or more than five times the
stated reserves of Saudi Arabia. This energy bounty is simply too large to ignore any longer, assuming that the
reserves are economically viable. And yet, oil shale lies far from the radar screen of most investors.
__________________
___________________________________________


________________________________

Quote:
Originally Posted by bturner2 View Post
Myself I'll live on the edge and surf without a helmet.

Last edited by TX.X-30 fan; 06-24-2008 at 05:53 PM.
Reply With Quote
  #64  
Old 06-24-2008, 06:31 PM
Ric's Avatar
Ric Ric is offline
MC Master Poster
 
Join Date: Aug 2004
Boat: 2005 Prostar 197 / MCX
Location: _______Wastebasket_________________________
Posts: 13,220
Quote:
Originally Posted by bbymgr View Post
I'm not sure I understand it exactly Jorski. In your July - August scenerio, what happens to that speculator if the price of oil drops between when he buys the unit of oil in July and sells the unit of oil in August?
That's where I was headed
__________________
Quote:
Originally Posted by TX.X-30 fan
Say yes to cheap beer---- no to ethanol.
Reply With Quote
  #65  
Old 06-24-2008, 06:43 PM
TX.X-30 fan TX.X-30 fan is offline
MC Platinum
 
Join Date: Sep 2006
Boat: mastercraft, X-30, 2004, MCX.
Location: Lake Travis
Posts: 9,588
They lose money??? In their interest to keep the price going up, who in that business has been short for quite a while??
__________________
___________________________________________


________________________________

Quote:
Originally Posted by bturner2 View Post
Myself I'll live on the edge and surf without a helmet.
Reply With Quote
  #66  
Old 06-25-2008, 10:29 AM
Jorski Jorski is offline
MC Devotee
 
Join Date: Jul 2004
Boat: 1993 190 with LT1
Location: Toronto, Canada
Posts: 1,477
Quote:
Futures market traders in oil and gas are making obscene profits on the backs of consumers. Explain it as you will but these guys are driving the price up on a barrel of oil beyond any supply and demand basis.
TX-X30:

Incorrect. They lower costs to both producers and consumers. Please recall, that they do not consume oil.

On another note...oil from shale is a very long way off.



Quote:
In your July - August scenerio, what happens to that speculator if the price of oil drops between when he buys the unit of oil in July and sells the unit of oil in August?

bbymgr:
These are fixed price deals. The profit is locked in, as the price to the seller is fixed, and the price received from the buyer is fixed. If the "speculator" wanted to sell his position to someone else prior to the contract maturing, he would receive less if the spot price of oil dropped and more if it went up.
Reply With Quote
  #67  
Old 06-25-2008, 10:43 AM
wakeX2wake's Avatar
wakeX2wake wakeX2wake is offline
MC Maniac
 
Join Date: Feb 2008
Boat: 2007 mastercraft x2
Location: Auburn, Al
Posts: 2,821
Quote:
Originally Posted by Jorski View Post
These are fixed price deals. The profit is locked in, as the price to the seller is fixed, and the price received from the buyer is fixed. If the "speculator" wanted to sell his position to someone else prior to the contract maturing, he would receive less if the spot price of oil dropped and more if it went up.
this happens WAY more often than you'd think... i work in the metal industry and see it happen here all the time and our relationships w/ our suppliers are very similar to oil companies... we sign a contract w/ middle eastern suppliers for say 50 million lbs of magnesium at $3.75/lb and we pay for 10 million... they'll usually honor the first two payments of the contract but after that w/ costs going up they'll get an offer for $4.00/lb then turn around and give us the middle finger and tell us if we want it that we can pay $4.15/lb or go pound sand... there isn't sufficient capital out there to lock in these prices for the oil companies either... yeah there's astronomical numbers floating around that people find but they really aren't that far fetched if you knew where all they came from... hell my company's natural gas bill last month was $1.4 million
__________________
Current - '07 X2 blue on silver metal flake w/ switch graphics

MY LED INSTALL... CHECK IT OUT

MY WAKESIDE RIDE

"It's just water... not concrete or dirt... so just throw it"
-Parks Bonifay

"I feel sorry for people who don't drink... when they wake up that's as good as they're going to feel all day"
-Frank Sinatra

"Indecision may, or may not, be my problem"
-Jimmy Buffett
Reply With Quote
  #68  
Old 06-25-2008, 11:42 AM
Jorski Jorski is offline
MC Devotee
 
Join Date: Jul 2004
Boat: 1993 190 with LT1
Location: Toronto, Canada
Posts: 1,477
Quote:
This is from one of your earlier posts- How can speculators not be affecting the price of oil when rumors and events that may happen, but haven't yet, cause the price to go up? When I mentioned actual cost being the basis for selling price, this is what I was getting at- speculators aren't dealing with reality, they deal with what might happen. The price of crude went up today because of a Nigerian Oil Worker's Union action but they haven't changed anything to do with production. All that has happened so far, is a limited form of protest, according to the link below.
Jimn,

Show me some evidence, other than a statement, that speculators were responsible for the price move. Further, there was an attack by a militant group called MEND on a Nigerian Off-shore platform (http://www.theoildrum.com/ ), that actually reduced production...this is a real event, despite what the Toronto Star says. Funny, this board quoting the Toronto Star. This paper is owned by a number of family trusts, that have legal charter approved by the courts to adhere to the Atkinsin Principles; essentially to present the Liberal point of view - who'da thunk it for TT?!?! http://www.thestar.com/aboutUs/atkinson

I posted a link to the commitment of traders report, showing that speculation has actually fallen over the last year. This is produced by the Commodity and Futures Trading Commission - government agency, so no profit bias in their analysis. When the futures market reacts to news, it is much more likely to be trades conducted by commercial producers and and commercial buyers than due to the result of speculative activity.

Even if it was due to speculators, the reality is that they can move the price by a couple of dollars in the very short term; however, if that news does not come to pass, they will lose money soon thereafter.

The speculators can change the shape of the futures curve, but they have very little abilty to shift the entire curve up or down.

Want some evidence ? Just compare the price of spot oil, to the futures prices. Not much of a gap...why ? Remember, speculators DO NOT consume nor take delivery of oil, thus they cannot affect the spot price. So, if they have pushed up the futures price so much, why isn't there a huge gap between between spot and future prices????

Last edited by Jorski; 06-25-2008 at 12:24 PM.
Reply With Quote
  #69  
Old 06-25-2008, 12:38 PM
east tx skier's Avatar
east tx skier east tx skier is offline
MC Hero
 
Join Date: Jul 2004
Boat: 1998 Ski Nautique
Location: End of my rope.
Posts: 26,185
Quote:
Originally Posted by Jorski View Post
That would not exactly be a ground-breaking occurence (for any government) now would it. Eastie, you're a lawyer..what does "expert witness" mean to you ?
It means paid. And both sides have them. My only hope is to (1) not trust them and (2) keep asking questions.
__________________
Previous: 1993 Prostar 205

Red 1998 Ski Nautique, PCM GT40, 310 hp, , Acme 4 blade, Perfect Pass SG/Zbox.

FAQ


Be kind. Have fun.
Reply With Quote
  #70  
Old 06-25-2008, 12:46 PM
Jorski Jorski is offline
MC Devotee
 
Join Date: Jul 2004
Boat: 1993 190 with LT1
Location: Toronto, Canada
Posts: 1,477
Easttx....BINGO!!!
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 05:36 PM.


2018