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Old 12-16-2014, 03:06 PM   #21
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Is the end near?
Nah. Just another close call...

Potentially hazardous asteroid surprises astronomers
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Old 12-16-2014, 03:29 PM   #22
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One confusing thing is that earth products, like oil and gas and copper and nickel are called commodities. Also called commodities, or commodity products, are things like bricks, floor tiles and the like. In each case when things start getting challenging, it is immediately said that this is just supply and demand, so of course the oil price is falling, supply is rising. This is true enough, but IMO very misleading. Todays trading price for oil measures only what is available now or very shortly, compared to what is needed or wanted now or very shortly.

But bricks are very easy to replace, you can dig up some clay in your back yard and make some. Not true with commodities like oil which are hard to find in high concentrations. The story of energy and copper and nickel and other earth products of this nature is that they are not ubiquitous. High concentrations are rare. Calling America the new Saudi Arabia is very misleading. Horizontal drilling and fracking are very clever responses to high demand and high prices, but in no way can these resources be compared to Saudi Arabia. I can't specify numerically the difference, but put it this way, could the US set out to shut down Saudi production by producing at top rates? Of course not.

So in a way it is a market failure, When there is a current surplus of supply in oil, it trades like women's skirts being marked down at the end of a season. But that low cost oil still has the same very special long term value that it had before the sale started. It's just that trading is today and near term, not 20 years into the future.

Ha
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Old 12-16-2014, 03:33 PM   #23
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So in a way it is a market failure, When there is a current surplus of supply in oil, it trades like women's skirts being marked down at the end of a season. But that low cost oil still has the same very special long term value that it had before the sale started. It's just that trading is today and near term, not 20 years into the future.
Ha
There is tremendous volume in traders, and speculators, that have no interest in actually getting any oil delivered. Many people buy and sell thousands of contracts of oil and gas without the means to hold more than a 5-gallon can.

Getting rid of the speculators would smooth out the markets. If you cannot take delivery, you have no reason to buy. If you do not own any gas/oil, you should not be able to sell it.
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Old 12-16-2014, 03:41 PM   #24
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I want to find a way to lock in $55 oil for five years or so such that we have $3 diesel for our truck/camper during our travel of the USA. At 10mpg and traveling up to 20,000 miles a year, it is not a insignificant price difference ($6000 of fuel at $3/gal vs $8000 of fuel at $4/gal)

Perhaps if I could find an investment that would go up 33% if diesel goes back up 33% but is guaranteed not to drop more than the equivalent drop in diesel.

In other words, I want to pre-buy $30,000 of diesel for use in the next 5 years.
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Old 12-16-2014, 05:43 PM   #25
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There is tremendous volume in traders, and speculators, that have no interest in actually getting any oil delivered. Many people buy and sell thousands of contracts of oil and gas without the means to hold more than a 5-gallon can.

Getting rid of the speculators would smooth out the markets. If you cannot take delivery, you have no reason to buy. If you do not own any gas/oil, you should not be able to sell it.
Why should someone have to own a commodity in a futures contract? The contract is a promise of future delivery backed by a deposit to cover price swings. The speculators offset their positions before the delivery date.

Speculators are needed in futures markets to assume risk and provide liquidity to the market. Commercial hedgers can forward sell their production and lock in their prices. You can't have a market without the speculators.
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Old 12-16-2014, 06:40 PM   #26
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There is tremendous volume in traders, and speculators, that have no interest in actually getting any oil delivered. Many people buy and sell thousands of contracts of oil and gas without the means to hold more than a 5-gallon can.

Getting rid of the speculators would smooth out the markets. If you cannot take delivery, you have no reason to buy. If you do not own any gas/oil, you should not be able to sell it.
You don't know much about economics, do you? Fail.
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Old 12-18-2014, 03:52 PM   #27
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I just came back from a run to Home Depot. On the way, saw that Sam's Club had gas at $2.17/gal. Then, just now check gasbuddy-dot-com, and see that Costco's price is $2.15. Is the end near?
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I just came back from an errand to Costco, and filled up at the price of $2.09. Son of a gun!

The end must be near, but I do not know what that is ending.



This is the end
Hold your breath and count to ten...

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Old 12-18-2014, 08:56 PM   #28
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You don't know much about economics, do you? Fail.
Most of the traders are buying/selling based on trends, and charts. It has nothing to do with economics, and more to do with chart patterns. That is why you get big price movements.
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