Quote:
quote:Originally posted by Espresso
Quote:
quote:Originally posted by fritz_t_coyote
Because you cannot repeal the law of Supply and Demand.
|
This had to do with supply & demand. Please explain why every month the oil company profits are becoming greater & greater. Not just a steady incline.. it JUMPS. We have PLENTY of supply & plenty of demand. But there is in no way a shortage. If that was the case, then the shortage would CONSTANTLY exist. Wall Street even said. They are afraid of what MIGHT happen & that reflects in the trading. Not what IS happening, but what MIGHT happen.
I dotn disagree at all with the cost of the fuel at all. It's the fact they they are raising it because of FEARS, not because of supply & demand. Supply & demand prices jump, when there is infact a short supply & large demand. We are still consuming the same, teh same amount is being bought..there is no shortage. Plain & simple
if ther was. OIL would go up( look on the shelves of your local auto store, the oil prices havent changed). ANYTHING related to oil would go up. But it has not. Just fuel.
|
1- There is no Shortage because nothing is artificially constraining the price. Keep an eye on the Hawaiian experiment (which is not a rigid cap, just a 'relative to mainland prices' cap) which might cause some shortages.
2- Oil company profits are up. Yup... every time the price of oil goes up, the value of thier inventory goes up.
3- Lubricating Oil: at a buck-something a quart, more for synthetics, the cost of the raw material has a lesser impact on the price of the lubricant. Even the Cheap Stuff from Pep Boys with a Coupon is 79 cents a quart, or 3.16$ / gallon. (with out the various taxes slapped on gasoline).
Future prices: the options traders are bidding on 'fears' and 'rumors' and projections. But thats what the futures markets exist for, to allow consumers of commodities to lay off the risk of price swings. If the Fears don't materialize, the prices will drop, and some options traders will find themselves on the losing end of some contracts.
Just remember the best way to make a small fortune trading futures: Start with a large fortune.
Here is an interesting article on gas prices after adjusting for inflation:
http://www.usatoday.com/news/opinion...x.htm?csp=N009
and another report from the Fed:
http://research.stlouisfed.org/publi...1101/cover.pdf
and thoughtful bit about the media coverage of 'record-breaking gas prices':
http://www.niemanwatchdog.org/index....skthisid=00133