SURPRISE OIL RELEASE TARGETS SPECULATORS

  • Posted by a hidden member.
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    Jun 23, 2011 7:03 PM GMT
    "Thursday’s surprise release of 60 million barrels of crude reserves is not about keeping oil consumers well supplied. It’s about chasing oil speculators out of the market.

    And it seems to be working."



    http://www.msnbc.msn.com/id/43510170/ns/business-going_green/
  • Menergy_1

    Posts: 737

    Jun 25, 2011 2:54 PM GMT
    Not sure if this was direct-wired to the surprise release, but Thursday morning I got some gas at a local Chevron station, did my errands out of town, and came back in the afternoon a couple of hours later to find the price had dropped $.20/gallon in the interim! Yay - whatever the cause....icon_lol.gif
  • CuriousJockAZ

    Posts: 19129

    Jun 25, 2011 5:10 PM GMT
    I think this kind of aggressive punching back at the speculators who are manipulating the price of oil and gas is the right way to go. What good is all that stockpiled oil if we don't use it once in awhile to fight those greedy bastards?
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    Jun 25, 2011 9:50 PM GMT
    southbeach1500 said
    CuriousJockAZ saidI think this kind of aggressive punching back at the speculators who are manipulating the price of oil and gas is the right way to go. What good is all that stockpiled oil if we don't use it once in awhile to fight those greedy bastards?


    Except that the price of gasoline (and oil) has been going down for the past month or two on its own thanks to those same "greedy speculators."

    This was purely a political move.


    Incorrect.
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    Jun 25, 2011 10:30 PM GMT
    southbeach1500 said
    Christian73 said
    southbeach1500 said
    CuriousJockAZ saidI think this kind of aggressive punching back at the speculators who are manipulating the price of oil and gas is the right way to go. What good is all that stockpiled oil if we don't use it once in awhile to fight those greedy bastards?


    Except that the price of gasoline (and oil) has been going down for the past month or two on its own thanks to those same "greedy speculators."

    This was purely a political move.


    Incorrect.


    Uh huh. Then why are they doing the release now, when the price has been in decline since April?


    Why did Cantor walk out of the debt talks?
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    Jun 25, 2011 10:35 PM GMT
    It's not even July which is peak driving season.
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    Jun 26, 2011 12:02 PM GMT
    Christian73 said
    southbeach1500 said
    CuriousJockAZ saidI think this kind of aggressive punching back at the speculators who are manipulating the price of oil and gas is the right way to go. What good is all that stockpiled oil if we don't use it once in awhile to fight those greedy bastards?


    Except that the price of gasoline (and oil) has been going down for the past month or two on its own thanks to those same "greedy speculators."

    This was purely a political move.


    Incorrect.


    Speculation is an effective tactic because the price elasticities of supply *and* demand in oil are high. Anything to reduce the gradient of the supply curve will reduce the variance, and reduce the return on speculation.

    But Southbeach never took a class in economics in his life.
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    Jun 26, 2011 2:57 PM GMT
    TigerTim said
    Christian73 said
    southbeach1500 said
    CuriousJockAZ saidI think this kind of aggressive punching back at the speculators who are manipulating the price of oil and gas is the right way to go. What good is all that stockpiled oil if we don't use it once in awhile to fight those greedy bastards?


    Except that the price of gasoline (and oil) has been going down for the past month or two on its own thanks to those same "greedy speculators."

    This was purely a political move.


    Incorrect.


    Speculation is an effective tactic because the price elasticities of supply *and* demand in oil are high. Anything to reduce the gradient of the supply curve will reduce the variance, and reduce the return on speculation.

    But Southbeach never took a class in economics in his life.


    For this to have an impact for anyone who has taken a class in economics, the release has to represent a significant enough increase in supply. Further, for it to be sustainable, it must be ongoing and well, high prices being the result of speculation as opposed to more fundamental reasons.

    Curious - are you aware how much 60 million barrels of crude reserves amounts to in global consumption? Are you aware how many barrels of crude are in the strategic reserves?
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    Jun 26, 2011 3:04 PM GMT
    If I had my way, Obama would develop the spine to lead in legislation to limit speculation and to tax the speculators income from it heavily, because it increases the American consumers costs in goods and services unnecessarily . But that won't happen because speculators are big donors particularly to republicans. This is all another example of our government being bought and paid for.
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    Jun 26, 2011 5:03 PM GMT
    Let's hear it from the horse's mouth:
    http://www.iea.org/files/faq.asp

    I thought the IEA only does this for supply disruptions in excess of 7%. The 1.5 million-barrels-a-day disruption from Libya doesn’t seem all that much, given that global demand is around 88 mb/d, so why go to all the trouble?

    As far back as 1984, IEA member countries understood that a disruption of a much smaller scale than 7% could cause significant economic damage, and thus they adopted more flexible response measures. The two previous emergency IEA actions, in 1991 and 2005, each accounted for less than 7% of world demand. Particularly in a tightening market such as the one we see currently, a relatively small disruption can have a significant impact on the market.

    Several analysts say this is only likely to have a short-term effect on the market, and that prices will be higher in a month’s time. What’s your response? Will you extend this by 30 days? How will you decide?

    Markets move based on today’s fundamentals and expectations of future supply and demand. The coming months, as we head into the driving season, would likely see the impact of the Libyan crisis felt most keenly; this is why the IEA is acting now. Some producer countries have announced their intentions to raise production, but it takes time for these incremental barrels to be produced and shipped to consuming markets. The use of IEA strategic stocks now will help bridge the gap until these new supplies are available. The IEA will continue to monitor the situation. If supply remains disrupted and markets remain tight in the future, the IEA does not exclude another decision to make additional supplies available to the market.
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    Jun 26, 2011 5:55 PM GMT
    realifedad said If I had my way, Obama would develop the spine to lead in legislation to limit speculation and to tax the speculators income from it heavily, because it increases the American consumers costs in goods and services unnecessarily . But that won't happen because speculators are big donors particularly to republicans. This is all another example of our government being bought and paid for.


    And what of the "speculators" abroad - oil doesn't only get traded on US markets. As for large speculators - ie hedgefunds, a lot of those are actually Democratic contributors or were the last time to Obama.
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    Jun 26, 2011 8:30 PM GMT
    realifedad said If I had my way, Obama would develop the spine to lead in legislation to limit speculation and to tax the speculators income from it heavily, because it increases the American consumers costs in goods and services unnecessarily . But that won't happen because speculators are big donors particularly to republicans. This is all another example of our government being bought and paid for.


    It's not that simple because there really isn't any way to identify "speculators" from ordinary traders. And, let us not forget, such people look after our pension funds.