I was in the thread very early on - then realized it was very similar to the old CNN show "Crossfire"....ie....two sides to the story, neither side will "win", neither side is "wrong", and neither side will be swayed. The entertainment value dropped very quickly.

Are interest rates high right now? Is inflation high right now? Certainly the world economy has issues (waaaayyyyy to much shaky credit out there).

Why did the oil companies let prices drop so far, so fast? I would like an explanation from you smart people why the price is down to $87. I don't know - and don't pretend to know. But I'm sure there are some facts that can be thrown around, and not just "But Eric Bryant said" sarcastic comments.

Thanks.

 

Oh, that's all? That's easy.

Saddam tried to kill Bush's dad. I think his wife accompanied dad, and missed getting killed as well. Things like that people tend to remember... especially after they get elected President.

It was a bonus that the company that Vice President Cheney was formerly CEO of got exclusive contracts to rebuild and run the military logistics in Iraq, but that would give them reason to stay in till the end of the admisistration...... oh... wait.

 

Some people have short memories... $87 was high only two short years ago where prices dropped from $70 back down to below $60 bbl.

The waters are being tested as far as what the economy can handle... just my 2c.

And no, I don't consider myself one of those smart people to whom you refer!

 

Which "some people" are you referring too that have these short memories? This thread was started in late July of this year (not two short years ago) when oil was approaching $150. In my opinion, $147 to $87 is a pretty significant drop - hence my post. What oil prices were 2 *short* years ago is not germane to what I posted.

So the waters are being tested....by whom? Have any data/facts to back up those opinions, or is what you are posting no better than what you chastize 5thgen69camaro for posting?

There's a word for those that do that sort of thing. Know what it is?

 

I have backed up with posts stating the oil reserves are full... and have been for the past couple of years. The point that many here argue is that the price fluctuations is due to supply and demand... if you read through the thread properly, you would know that is clearly not the case.

Again, you seem to point the finger and laugh at the confused few when the price drops significantly... I'm partly agreeing with you and stating it has risen dramatically as well (which you don't seem to recall very well, irrespective of when this thread was started - the Exxon profits were due to significant increases in the price of oil... don't lose sight of that FACT! ).

Again, it's my view the prices are being manipulated as the regular argument of Supply and Demand is no longer justifiable.

 

1) I've been up for 58 hours on 16 hours sleep, and I'm about to die sitting here at my laptop in a hotel room.
2) I'm not "one of the smart people" either. I'm just a Joe that works for a paycheck and hates giving my hard-earned money to rich people, so I try to understand why it's going away so fast - as opposed to assuming that it's going to law-abiding, open, honest businessmen that are working hard for their money just like I do.
3) My verbage, diction, and typing are going away fast too BTW.
4) I have enough interest in this topic and thread to come here after paying some bills online and see what's been written the last 2-3 days. I just spent 30 minutes reading every word posted here and looking at links herein, so I'm not going to spend long responding tonight. Please forgive.

Having said the above so you understand my position/condition, please accept my attempt to answer your question.
Honestly, I don't feel "on my game" right now, but I want to try to answer this tonight... out of respect for you Bob.

I think there are a few factors that are causing prices to fall - some are fact and some are opinion.

1) Saudi Arabia walked out of OPEC in early September and promised to provide oil to anyone that needs it/wants it and has the money.
"As the world's largest crude exporter, the kingdom in the desert took its ball and went home.

As the Saudis left the building, the message was shockingly clear. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate told the New York Times. “We will see what the market requires and we will not leave a customer without oil."

I certainly understand that this depicts a "supply/demand" scenario in which Saudi Arabia is supplying to meet the demand, so the price is coming down. In many ways I agree that this is happening - provided the buying, trading, and movement of the oil is all on the up-and-up, meaning "legal" and accurate. One interesting thing to note about this - IF it is actually the biggest cause of price reduction - is that Saudi-Arabia is single-handedly meeting the world's demand for oil. Would hardly seem that the true supply (both in the ground and the supply channels that distribute it) is strained or drying-up, which argues against the supply/demand theory when they were NOT producing at their maximum volume IMO. This, because we certainly know that demand is currently down around the world - especially in the US which is the largest consumer. Also, just as it would appear that a storm in Galveston can cause gas prices to go up instantly in Europe, I guess so can Saudi Arabia supply oil to the world - despite shipping issues, pipeline capabilities, refinig capability, etc. There MUST be some kind of material teletransporter they use to get it all out to the end users instantly.

2) I personally feel that the speculators that have been buying futures, and trading them around inside their own rings just for profit-taking, have become a bit shy of doing so in the current markets and economic conditions. They run the risk of being exposed, and worse yet - having the lawmakers of the world put sanctions and limitations on their activity. In summary, I think they have decided that they have had enough for the time-being, and it's time to take a break from this area, and concentrate on the financial markets instead. I also think that the market has simply stabilized due to the lack of hundreds-of-billions of dollars not being thrown in and out on a daily basis.

3) Personally - in addition to the above, I also feel that the oil companies are backing-off right now due to our election. They are backing the Republican ticket - which should be of no surprise to anyone this deep in this thread - and they know that this issue is significant to the American public. To offer some immediate relief in the weeks leading up to the election will not hurt their position or their candidate. Americans have SHORT memories for the most part... making the timing of this price drop something of a bizzare coincidence. I don't think Exxon or BP are specifically making crude prices drop, but they can certainly afford to take a short-term hit on raw material prices and even prices at the pump after having 16-20 record-breaking quarters in a row, especially if it could mean 16 more quarters of the same if their man wins. My only unexplainable flaw in this theory is that they should be dropping at the pump to get effect on voters, and it's really not falling at the pump as fast as it is at the oil rig. I admit the hole in the armor, but still suspect the condition is partly true.

4) At the highest level, I think the financial elite of the world have sufficient control over the oil situation and they are more concerned with the financial reorganizations going on right now than they are the oil. After all, I have professed throughout this thread that the MONEY is what is controlling not just oil, but governments, big corporations, and even cultures... so he who controls the money controls everything. Right now, money is the more significant issue, and I think more attention is being given to consolidation of big money organizations instead of oil.

I could offer more insight or speculation about why crude is dropping, but the fact that gas prices at the pump are still disproportionately high is more concerning to me - as mentioned above. If I am Exxon, and I am now paying 60% less for my raw material than I was 2 months ago, but I am selling my finished good at nearly the same price as 2 months ago, what will my bottom line look like for the last 2 months? Get ready for yet another record quarter.

If wholesale is down to $2.07, how come suppliers were able to hold deliveries to local stores hostage for $5.33/gal just 2 weeks ago? There is precicely 1 group who can control what you pay at the pump... the folks whose name is on that pump. I am not crowing, I'm asking how you, me, or anyone else can legitimately explain this huge swing in price as it moves in the supply chain and NOT consider something "not normal" is at play.

So I've tried to shed some light on my thoughts about why crude is dropping like it is. Would you do me the courtesy of trying to explain to me (in your opinion) why crude can go up by $27/bbl/day and then go back down by $21/bbl/day a day later when all reserves are full, ships are full, oil producers are cutting back on production, consumption is down, no hurricanes are crippling the system, and refineries all over the world are operating at less than max capacity? And if you would do me the honor of responding with your opinion or position on the same question you asked - how can crude prices drop by 60% in such a short time, I will be very appreciative.

Respectfully,
PP

 

Motive for the war? ...

I know what you are saying - and you are right.

But in addition to that, Saddam was running a black-market oil supply program that was preventing the world's powerplayers from running oil prices up. Every time they (powerplayers and OPEC) would try to run prices up - either by cutting production OR by trying to raise prices - Saddam would open the back door and invite any company or nation to come buy his oil via the "oil for food" program... just bring cash and your own vehicle, preferably at night. Putting him in jail would not stop the program or the underground contacts that were established already. The only way to stop this black-market sale of crude was to take out Saddam and remove all of the regime that was wired to operate in his directed manner.

I challenge anyone to go back and review the timeline of oil prices compared with the end of the Gulf War and the fall of Saddam's regime up to present day.

WMDs and genocide are the most lame excuses on the table for going into Iraq. If these were the criteria, we'd be in Iran, Korea, China, and about 10 African countries right now too. They have all demonstrated FAR more genocide and potential for dirty weapons than Iraq.

But that's 'nuf about the ugly war-starting stuff for now. I'd rather we stick to the issue of how we are being fleeced today... gas prices... oil prices... financial markets.... bailouts... you know - the good stuff.

 

FWIW, I saw gas here in Oklahoma City on 10/7 for $2.79/gallon.

And I believe the $2.07 wholesale price quoted was for November delivery. I'm guessing we'll see retail prices below $2.50/gallon before Thanksgiving. Weren't they supposed to be $6.00/gallon by now? More than likely a temporary thing, but what if gas prices stabilize around $2/gallon? The car companies are spending billions shifting to small, fuel efficent cars on the assumption of $4+ gas.

 

Even with prices being where they are now, there is no reason not to start shifting toward small cars. Most people don't need big cars/trucks/SUVs. This recent gas crisis made the people who don't need big cars move to smaller cars. Only the ones that need large vehicles stick with them.

It's not a bad thing, and this will help to adjust mentality back to "live within means, with what i need, instead of what I want."

 

You make a lot of good points and I definately learn more from this thread when everybody leaves the politics out of it. IMO most of this thread belongs in the lounge for all of the politics. There is a lot of good info in the thread however.

I would like to point out that while I firmly believe that speculators have a disproportionate affect on oil prices (as well as oil producing countries and other mysterious forces) the fact that they have influence and exert it does not prove that supply and demand is not a driving factor for oil prices (in fact although significant circumstantial evidence has been provided nothing has been proven in this thread that prices are not driven by supply and demand). Most examples that have been given in this thread actually enforce that supply and demand are at work (although the correlation is not always propotionate). Also the status of our oil reserves logicially has very little to do with the price of oil. If there is a change in supply or demand it can have an affect on prices. It doesn't take both ( not in reference to your particular example but to some that others have pointed out).

 

Perfectly put.

 

Not even when we're talking over a period of a few months? That doesn't remotely suggest to you there is something fishy about the huge spikes? We are not running out of oil btw... and history is the best judge of how stable the prices of oil can be.

So how is supply/demand different to what is was last century? We are consuming more and more now as we were then. So what gives?

On another point, you've completely dismissed the comments by Iran's leader that the price increase is 'fake' and 'deliberate'. Why have you dismissed/ignored the comments from the leader of a major oil supplying nation?

 

I agree. I'm just not sure how the sheeple will react.

 

Well as I said I agree that there are certainly other factors that have a major influence over the prices of oil. I will disagree that we aren't running out of oil. We are certainly running out. At what rate is certainly a debate. I think there is a lot more oil out there than anyone wants us to know about.
I'm not sure what you mean by the difference between supply/demand last century and we are using more and more now as we were then.

The supply and demand have gone up certainly. Demand is increasing, the view on supply is generally steady although there are interuptions that occur that can affect price. My main point is while there is strong evidence for outside forces affecting prices, its not exactly proof.

As far as what the president of Iran says, while there is probably a lot of truth to the statement, I reserve the right to disagree with I'm ademonjob.

 

Now $2.59/gallon in OKC....