----- Original Message ----- From: "Gary Denton" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Sunday, December 11, 2005 6:15 PM Subject: Re: Bitter Fruit
On 12/11/05, Dan Minette <[EMAIL PROTECTED]> wrote: > > ----- Original Message ----- > From: "Robert Seeberger" <[EMAIL PROTECTED]> > To: "Killer Bs Discussion" <[email protected]> > Sent: Sunday, December 11, 2005 9:16 AM > Subject: Re: Bitter Fruit > > > > > > ----- Original Message ----- > > From: "Doug Pensinger" <[EMAIL PROTECTED]> > > To: "Killer Bs Discussion" <[email protected]> > > Sent: Sunday, December 11, 2005 12:02 AM > > Subject: Re: Bitter Fruit > > > > > > > Dan wrote: > > > > > >> But, you are putting forth a different question. Whether the Bush > > >> Administration thought Iraq posed a significant threat to the US. > > >> I think that's true. I think, especially after 9-11, they made the > > >> connection, and proof texted the intelligence, ignoring every > > >> caveat, to find proof of what they already knew. And, with all due > > >> respect, I think the "blood for oil" argument is a left wing > > >> parallel of their mythology. > > > > > > But, gee whiz, we've not only got strategic control of the Iraqi oil > > > fields, we've got record high oil prices and oil company profits! > > > Its a win win!! And giant corporate friends of the president get > > > huge no bid contracts! Win, win, win!!! And it's all because of > > > the war on terror, so its all the terrorist's fault. Win, win, win, > > > win!!!! Golly, gee whiz, how convenient is that?!?!! > > > > > > > Has anyone factored in increased demand from China and India as a > > partial reason for higher Oil/Gas prices? > > I seem to recall that was an issue about a year or so ago. > > > Certainly, the increased demand from the Asian sector (which includes China > and India) is an important factor. When oil dropped through the floor in > 1999, there was a combination of factors that included a big spike up in > Iraqi oil exports combined with a lessening of the increase in demand for > oil. A quick google didn't pull up the chart I found a week ago, but I > think that demand from '98 to '99 either went up 1% or was flat. > > So, if Iraq oil production was now at 4 million barrels/day, we would not > have $10.00 oil. We also would not have $60.00 oil. This summer, I read > that the spare production was down to half a million barrels/day. If Iraq > was up at 4, that would be closer to 3. Rough guess from past trends, I'd > say that oil would have stayed near the price it was at in the year or so > before the war if things went as planned. > > One thing that amazes me is how inelastic demand was between $30 oil and > $60 oil. We are starting to see an effect, but 2005 should be a record > year for world oil consumption. This indicates to me, since short term > supply is also fairly inelastic, that oil prices are very sensitive to > relatively minor (in a percentage basis) variations in the supply/demand > balance. >I have been more amazed at the wild price swings at the pump with the >smaller swings at wholesale and then the rapid moderation in prices . Gathering data from: http://www.infinitytrading.com/unleaded_gas_futures_report.html http://www.theautochannel.com/news/2005/02/16/033729.html http://www.cbsnews.com/stories/2005/09/01/katrina/main810903.shtml http://www.cbsnews.com/stories/2005/09/13/national/main837983.shtml http://money.cnn.com/2005/09/01/markets/gas_prices/index.htm I obtained the following: The beginning of the year price for NYMerk Unleaded gas price was $1.20 The beginning of the year (Jan 15) commercial price from AAA was $1.81. The prices in an August 12th report were: NYMech Unleaded: $2.00 AAA nationwide: $2.41. The price difference narrowed about $0.21 during that time. On September 1st, we have NYMech $2.42 AAA: $2.68. So, the price narrowed another $0.17 per gallon to only $0.26. This is a very small difference, especially considering the average tax is $0.42. It is clear that retail prices lagged the wholesale prices a bit. The September 7th record high AAA New England price was just under $3.24. I didn't get the exact peak for the NYMech unleaded gas, but the difference between the beginning of the year price and the Sept 1 price was $1.22. It was $1.43 for the maximum street price. I also found that on August 30, the September futures were $2.47... http://www.usatoday.com/money/industries/energy/2005-08-29-katrina-cover-1b-usat_x.htm after rising over $0.41 in just one day. And, the next day the only source that I could get, the house budget committee, indicated the futures price was $2.92. http://www.house.gov/budget/econup101705.htm If you think the house budget committee keeps something that is this traceable (the futures prices are followable minute by minute, (my favorite website for it) http://quotes.ino.com/exchanges/?e=NYMEX The data are not up any more, but I think that it is quite likely that any error would be corrected within a day or two. This was an $0.85 rise in the futures price in two days. I'd be very interested to see what data you analyzed to determine that the wholesale futures market changed much less than the retail price. If you were to argue, say that the wholesale futures market for January was less volatile in August, but that's a different story....that was after the refineries were expected to get back on line. Prices for gasoline sold in September represent the September futures prices much more than the December futures prices....that was true even when the long term curve was trending upwards. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
