Leland F. Jackson, CPA wrote: > Stephen Russell wrote: > >> On Fri, Jun 20, 2008 at 3:38 PM, Leland F. Jackson, CPA < >> [EMAIL PROTECTED]> wrote: >> >> >> >>> I think the video is a sham. In a free enterprise system the laws of >>> supply and demand to determine price is as perennial and the laws of >>> gravity. The except is where there is a lack of competition, (eg >>> monopoly). I can't imagine the World Bank/International Monetary Fund >>> having the power to fix prices. I'm sure there is some truth in the >>> video to make the bigger misinformation sound compelling, but overall >>> I'm having trouble connecting the dots. If the video were true, it >>> would mean there was a monopoly. A monopoly could only be achieve if >>> government, oil companies, oil producer and many other were all in >>> cahoots together, (eg collusion). >>> >>> It is more likely that the price increases in oil are due to supply and >>> demand pressures, a very weak dollar, and speculative wall street >>> investing, (eg psychological fears). I think there is currently a >>> bubble in the oil prices, because I can find no rational reason that a >>> barrel of oil would double in price over so short a a period. I'm >>> looking for a downward correction in price in the near future. >>> >>> >>> >> ------------------------------ >> >> The price is a worldwide price though. I have not looked at the vid, >> probably wont. >> >> The speculators have moved their need for lost revenue into the oil markets >> and they were making a killing as the price was going up daily. Not it is >> over saturated and the gains are not what they were. Thank God for that! >> >> I see a lot of that speculative money pulling out of oil because the public >> has gotten in an uproar so the demand is not as great as they expected. >> >> >> > I think the speculation has been through in the oil futures commodity > market. For example, and airline can buy a contract for the delivery of > a certain amount of fuel today, with the oil to be delivered six month > to one year from the date of the contract. In this way the Airline can > lock in its cost for fuel for some time into the future. However, the > price of the future contracts keeps going up based on tight supply and > demand conditions which could cause violent upward fluctuations in the > price of oil for any disruption that might occur. Because of the fear > oil prices could climb to $150 a barrel or $200 a barrel six month or > one year from now, the futures price of oil has been driven up. > > This psychological fear acting out in the futures commodities market > seem to be driving up the price of oil. > > At one time the ME countries had some control over the price of oil. > They formed a monopoly to basically corner the market on oil using OPEC, > (eg Oil Producing Exporting Countries). The idea was to enforce > production quotas, (eg regulate the supply side of the economic > equation), to keep prices in a suitable range, but with today demand > eating up every bit of supply, prices remain very high regardless of > whether supply is regulated of full speed ahead. LOL > > Regards, > > LelandJ > > The pure speculator is simply playing the market. The pure speculator will buy a contract for oil to be delivered at so point in the future, but the pure speculator has no intention of ever taking delivery on the contract. Then the pure speculator will cash his contract out in a day or a week or so, hoping it will bring more money that he paid of it.
Oil can also be sold short in which case you are betting it will bring you more money today than when you cover your short some time in the future when the price of oil has declined, so it can work for or against you both ways, depending on whether you bet the market correctly. Regards, LelandJ Regards, LelandJ > > --- StripMime Report -- processed MIME parts --- > multipart/alternative > text/plain (text body -- kept) > text/html > --- > [excessive quoting removed by server] _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[EMAIL PROTECTED] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
