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Thread: Obama may tap strategic reserves

  1. #41
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    Re: Obama may tap strategic reserves

    Quote Originally Posted by sawyerloggingon View Post
    I don't think alot of you understand what speculating is. In it's simplest terms I am filling up every 50 gallon drum I have tomorrow with diesel, all 6 of them because I am speculating diesels going to do nothing but go up for a while. Same thing with airlines trucking comps etc. They try too lock in prices if they see them going up by purchasing Tens of thousands of gallons at a set price. As more comps do this the price goes up. If on the other hand something makes them think the price will go down, for instance if the pres of USA says he is going too open drilling up, these comps will quickly try to unload the high price fuel they have ordered and the price falls. It's not a perfect system but it works.

    Re speculation

    One has to consider the time frames of the oil contracts. The vast majority of speculators do not want to have delievery of the oil. The close the oil contract comes to the present date, the less speculation is going on. The spot price will have very little speculation, as the majority of bidders are those that want and need the oil for actual productive uses.


    As the most publicized oil prices are the spot prices, future production will have little impact as it is oil that will not be avaliable for years to come
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  2. #42
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    Re: Obama may tap strategic reserves

    Quote Originally Posted by Hikertrash View Post
    For the last few weeks all we've heard is the price of gas is going up, it will be over $5, the poor won't be able to afford it, it will stall the recovery and send the economy to a spiral. Well golly, if this isn't an emergency, what have y'all been crowing about?

    If even the threat of tapping the reserves slows speculation, it's a good thing, not for Republicans, but for the country!
    You are avoiding the letter of and the intent of the emergency reserve act. It specifically says shortages of oil, it says nothing about price of oil.

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    Re: Obama may tap strategic reserves

    Quote Originally Posted by Lord Tammerlain View Post
    Re speculation

    One has to consider the time frames of the oil contracts. The vast majority of speculators do not want to have delievery of the oil. The close the oil contract comes to the present date, the less speculation is going on. The spot price will have very little speculation, as the majority of bidders are those that want and need the oil for actual productive uses.


    As the most publicized oil prices are the spot prices, future production will have little impact as it is oil that will not be avaliable for years to come
    These brokers never take delivery it is true but they do buy up huge quantities of oil, on paper anyway and then resell it too people who do take delivery. In a sense they are alot like someone who sells stuff on e-bay for other people. They provide a service for a fee and our always trying to get the best price for their customers so they buy buy buy when oils going up and dump dump dump if they think oil prices will fall. I don't really see how any other system would be better, this really does provide liquidity in the market. As for spot prices they reflect what people try too see in their crystal balls.

  4. #44
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    Re: Obama may tap strategic reserves

    The price at the pump here dropped six cents/gal. since Friday. When a President says that he "may open the reserves" it has a pretty big impact.
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  5. #45
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    Re: Obama may tap strategic reserves

    Quote Originally Posted by sawyerloggingon View Post
    These brokers never take delivery it is true but they do buy up huge quantities of oil, on paper anyway and then resell it too people who do take delivery. In a sense they are alot like someone who sells stuff on e-bay for other people. They provide a service for a fee and our always trying to get the best price for their customers so they buy buy buy when oils going up and dump dump dump if they think oil prices will fall. I don't really see how any other system would be better, this really does provide liquidity in the market. As for spot prices they reflect what people try too see in their crystal balls.
    There must be a better way when prices go up as demand falls. Is that the way it is supposed to work?

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