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Old 07-04-08, 08:56 AM   #1 (permalink)
Gladiator
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True Oil Speculation

I heard part of the US Congressional hearings on oil speculation, and the focus of those hearings was on commodity markets.

The reality of oil speculation would be if Exxon, or some oil company, felt the price was going to rise, teh oil company would back fill an exisitng oil well, in speculation that the price would rise, and then the oil can be pumped back out, and sold for a profit.

One question is, Why do some oil companies feel the price of oil will go higher?

One reason is the asessment of the chances that shipping through the Strait of Hormuz will be restricted. The cost of maintaining a supply of oil for existing customers, needs to be passed on to the customers. So when the West carries out potentially disruptive activities in the Middle East, the oil companies need to create extra supply buffers, which increases the price at the pump.



There are published indicators of available oil supply. But are they complete?

http://www.eia.doe.gov/pub/oil_gas/p...t/txt/wpsr.txt

EIA - Short-Term Energy Outlook

Oil Inventories Report Full of Surprises - Seeking Alpha




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Last edited by Gladiator : 07-04-08 at 09:07 AM.
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