Gas prices, how high will they go?

[Leatherneck 693]

Speculation is a 'wash' - because when the delivery date is getting nearer, the speculator must SELL or accept delivery of 500,000 tonnes of crude oil at their apartment

Speculators therefore SELL as much as they BUY and only people who accept delivery can influence the price in the long term

You have a good point, when I'm long on oil -- I have no intent to take delivery of those 500 or 1,000 barrels nor do I ever intend to take delivery of 37,000 pounds of coffee when I'm long.

There is an army of speculators running around America -- and they have no connection with Wall St., they're just average folks trading commodities for a living or in self directed IRAs.

[Captain Oates 911]

You have a good point, when I'm long on oil -- I have no intent to take delivery of those 500 or 1,000 barrels nor do I ever intend to take delivery of 37,000 pounds of coffee when I'm long.

There is an army of speculators running around America -- and they have no connection with Wall St., they're just average folks trading commodities for a living or in self directed IRAs.

I do it myself every now and then but my hair would stand on end if I saw that super tanker headed into Chicago with a quarter million tonnes of crude with my name on it

As an aside, my lounge lizarding singles club pal used to categorize women as VLCC's and ULCC's

He would whisper - look out ! ULCC on the starboard bow !

key:

VLCC is a very large crude carrier exceeding 279,000 tonnes dead weight

ULCC is an Ultra large crude carrier exceeding 550,000 tonnes dead weight

[elmcitymaven 9,712]

I do it myself every now and then but my hair would stand on end if I saw that super tanker headed into Chicago with a quarter million tonnes of crude with my name on it

As an aside, my lounge lizarding singles club pal used to categorize women as VLCC's and ULCC's

He would whisper - look out ! ULCC on the starboard bow !

key:

VLCC is a very large crude carrier exceeding 279,000 tonnes dead weight

ULCC is an Ultra large crude carrier exceeding 550,000 tonnes dead weight

You should get him to post on VJ. He'd fit in nicely.

[Captain Oates 911]

You should get him to post on VJ. He'd fit in nicely.

I know for a fact that you are a sleek sloop with a fine plimsoll line

[elmcitymaven 9,712]

I know for a fact that you are a sleek sloop with a fine plimsoll line

Golly! You know what my sneakers look like?

[Captain Oates 911]

Golly! You know what my sneakers look like?

Yes, as well as being a gasoline consumption priest and apostrophe enforcer, I am also a shoe denouncer

However, if your imported plimsolls go 100 miles before they are shagged, how does that compare to the alternative gasoline usage as far as the balance of foreign payments are concerned ?

I suspect that jogging is far more costly to the value of the dollar and therefore jogging is an un-american activity and should be a dis-qualifier as far as public service is concerned - in the same way as not being a believer in a supreme bean is still a dis-qualifier in several States

[Mr. Big Dog 10,747]

Speculation is a 'wash' - because when the delivery date is getting nearer, the speculator must SELL or accept delivery of 500,000 tonnes of crude oil at their apartment

Speculators therefore SELL as much as they BUY and only people who accept delivery can influence the price in the long term

So Exxon Mobile, Goldman Sachs and other players in this market are completely mistaken in their assessment that speculation adds significantly to the price of oil. Seeing that actual supply and demand does not account for the rising cost of oil, what drives the prices up if not speculation?

[Captain Oates 911]

So Exxon Mobile, Goldman Sachs and other players in this market are completely mistaken in their assessment that speculation adds significantly to the price of oil. Seeing that actual supply and demand does not account for the rising cost of oil, what drives the prices up if not speculation?

At the moment, expected supply cuts (Iran)are driving price, along with unrelenting increases in usage by China etc

Speculation can bounce a price significantly in the short term, but speculators must sell oil contracts or receive it

There are other factors such as the US ban on exporting oil - a big increase in US drilling combined with contracts to receive foreign oil, will force either storage construction or lower prices - usually lower prices although tankers can be used as storage

Speculation usually gives profits to Goldman etc on the way up, and losses to Joe Public on the way down - this is so because Goldman etc can wag the market and I can't

...same with gold etc

[I AM NOT THAT GUY 5,715]

There are other factors such as the US ban on exporting oil

US cannot export oil? That's news to me. However, whether or not that is true, that doesn't stop excess refinery production from being exported.

Edited February 29, 2012 by ☼

[Leatherneck 693]

So Exxon Mobile, Goldman Sachs and other players in this market are completely mistaken in their assessment that speculation adds significantly to the price of oil. Seeing that actual supply and demand does not account for the rising cost of oil, what drives the prices up if not speculation?

Oh, demand in China, India and the value of the dollar has a role in the price of oil trending upward.

The Saudis have a hand in this also --the one variable most often not considered by many. The Saudis are not stupid, they didn't earn all those billions by being boneheads. When the dollar loses value, they demand more dollars to buy that barrel of oil.

Edited February 29, 2012 by Leatherneck

[Captain Oates 911]

Oh, demand in China, India and the value of the dollar has a role in the price of oil trending upward.

The Saudis have a hand in this also --the one variable most often not considered by many. The Saudis are not stupid, they didn't earn all those billions by being boneheads. When the dollar loses value, they demand more dollars to buy that barrel of oil.

In the next few decades, the USDollar will go down and world supply of oil will go down and world demand will go up

It's a world commodity and so although it is denominated in USD, the suppliers will want the USD equivalent of a basket of currencies - that is, more USD in the future

US consumption depends on the economy and culture.

I suspect the cultural shift to make a guy in Idaho buy a Renault Clio, is not going to be seen in my lifetime

"Give me a bloody massive pick up truck or death" as Patrick Henry said

ok the agenda is Iraq, Egypt, Libya, Iran and Burma and the Falklands

Hillary went to Burma recently and the Brits have sent warships to the Falklands

once these are rolled up, Venezuela has to be tempting

[MyLittlePony 340]

I said $40 dollars to fill up my car? i am so lucky to have a small car to fill up at the price og gas right now.

[Mr. Big Dog 10,747]

Oh, demand in China, India and the value of the dollar has a role in the price of oil trending upward.

Global demand projections were actually corrected downward recently due to decrased economic growth forecasts for 2012. That should take demand anticipation off the table as a factor that is driving oil prices up. Supply is also stable and reserves are plentiful. Supply and demand isn't explaining the price hikes.

[MyLittlePony 340]

The market value of the SUV will drop dirt cheap soon.

[Mr. Big Dog 10,747]

The market value of the SUV will drop dirt cheap soon.

I've heard that before. Not too long ago.

Jun 2008: Pickup truck, SUV sales run out of gas

Dec 2008: With gas falling, trucks come back - Pickups and SUVs will outsell cars this month, according to sales trackers at Edmunds.com.

We're just on the front-end of that same cycle once more.