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Oil Companies are manipulating supply

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Oil Companies are manipulating supply

Old 03-05-2009, 02:37 PM
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Default Oil Companies are manipulating supply

Oil companies are leaving tankers at anchor off US ports until prices rise. Additionally refineries are shutting down to do repairs (further restrict supply). They think we are really stupid and will not do a thing about this. They are probably right. It has worked before. This time it may blow up in their faces. They hid behind supply and demand when the prices were rising. If we allow them to manipulate markets to gain advantage it is on us.
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Old 03-05-2009, 02:42 PM
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Ever heard of the NYMEX?
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Old 03-05-2009, 02:44 PM
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Yeah, but the problem in that is when the cost of gas goes up folks just simply quit driving. Remember when oil was peaking people stopped driving, created a glut of fuel that backed up at the refineries. I think they are better off maintaining a steady supply, steady and predictable profits.
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Old 03-05-2009, 02:58 PM
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Originally Posted by oneill469 View Post
Oil companies are leaving tankers at anchor off US ports until prices rise. Additionally refineries are shutting down to do repairs (further restrict supply). They think we are really stupid and will not do a thing about this. They are probably right. It has worked before. This time it may blow up in their faces. They hid behind supply and demand when the prices were rising. If we allow them to manipulate markets to gain advantage it is on us.
Contango, trader's term for near term contracts being cheaper than contracts dated further out. Sell a December contract, store the oil until then, net more $$ than selling into the current month contract. That situation is easing now, as refiners slow down, gross supply is cut, and we come into increased seasonal use.

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Old 03-05-2009, 02:59 PM
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Originally Posted by Eyeball View Post
Yeah, but the problem in that is when the cost of gas goes up folks just simply quit driving.
Yep. The cure for high prices, is high prices.

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Old 03-05-2009, 03:11 PM
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Is it me, or can't the oil companies do what they want, as it is their oil? Just like the term "taxpayer money", once we pay our tax, it is no longer ours and the Government can do what it wants with it.
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Old 03-05-2009, 04:16 PM
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Love my 1998 honda civic, 38-40 mpg and paid for too
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Old 03-05-2009, 04:28 PM
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Oil has been stored on tankers for many, many months due to the producers not clamping down on production quickly enough as demand evaporated. It is a costly way to store the oil but land storage is running out. I bet they would be glad to unload the ships if there was more demand.

Refineries normally shut down at this time of year for maintenance because the price of gas tends to be lower, so why not give up your lowest value refining.

There may be market manipulation, but those two factors are not it.

The best defense is conservation, but people are starting to drive more. The regular increase in use for the next handful of months will cure the oversupply. You should be glad of the inventory build-up, because when supply tightens there is only one way for the price to go (up). Note the uptick in oil prices every time it seems like the economy will pick up.
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Old 03-05-2009, 04:31 PM
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If they manipulated prices, why would they allow Crude to fall to $40/barrel??
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Old 03-05-2009, 04:39 PM
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Tin Foil hat time...
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Old 03-05-2009, 06:32 PM
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Originally Posted by oneill469 View Post
Oil companies are leaving tankers at anchor off US ports until prices rise. Additionally refineries are shutting down to do repairs (further restrict supply). They think we are really stupid and will not do a thing about this. They are probably right. It has worked before. This time it may blow up in their faces. They hid behind supply and demand when the prices were rising. If we allow them to manipulate markets to gain advantage it is on us.

And? Is this unusal for any product? Do they continue making 100 cars per day when no one is buying new cars? How's new housing starts in your area? Are builders still going full blast? How about diamonds? There's a good one. Think DeBeers will ever let diamonds flood the market place? There's a good example of ABSOLUTE control over supply... and they have a product that they actually had to create a demand for once they actually had complete control over supply.
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Old 03-06-2009, 02:43 AM
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Originally Posted by JGarman View Post
Love my 1998 honda civic, 38-40 mpg and paid for too

Got a 94 with 215K and I PARKED MY HEMI last year in "protest".

Even though gas is cheaper I still drive the civic


I guess they wonder what caused all the economic problems, HIGH GAS PRICES FOR 2-3 YEARS gradually choked out the economy
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Old 03-06-2009, 03:31 AM
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geez i can't get over the fact how much people hate oil companies. if they had the same anger for the corrupt politicians in america we would be better off then we are now. people when will you figure out when it comes to oil the US does not control supply..OPEC does.we buy our the majority of our oil from OPEC and mexico and canada.demand for oil is down so supply is up it's simple economics when demand goes up supply goes down...this is just not in oil but in every market in this country. when demand goes up for anything price goes up. now how to stem the upcoming price increases...well we the US has to control supply and that is done by producing oil and in this country we are not allowed to drill like we should be able to because of politicians who are beholden to special interest groups. this country has more oil under the ground and off our shores than any other country in the world and have the largest oil deposits waiting to be tapped then any country in the world. but of course we are not allowed to go get it. stop the hatred for oil companies and demand your politicians allow this country to drill for it's oil so we can control supply not OPECand there ilk. until this happens get use to the arab nations pulling the strings on oil prices. YOUR new president will do nothing to help this situation nor will congress. i just hope prices stay flat until the economy recovers, whenever that may be. if prices go up while still in this bad situation..well it will only exacerbate it and prolong the agony. OPEC is cutting production like crazy and sooner than you think the supply and demand curve will tighten and when that happens prices will go back up. folks we have to control the supply of oil before we control the price of oil...that simple. tprice, to reply to your statement... what choked out the economy was not high oil prices. the high oil prices actually killed the high oil prices it was unsustainable at that price so it couldn't hold and fell the drastic reduction you saw in prices and what killed the economy was the housing market and the crash of banks. again this was all caused by corrupt politics. banks we told by politicians to give loans out to people who could not afford them under the threat of lawsuits for discrimination. they had to give these loans out or the federal gov't would sue them for discrimination based on the old you know what. the seeds for all of this nonsense were actually planted by jimmy carter back in the 70's..actually it goers farther back than tha but jimmy gets my blame for it because he is the first president in my liftime to implement these programs to help people who have no iota to help themselvs. then these programs just grew and became political money grabs. oil did not cause a recession...corrupt politcal policies caused this recession.

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Old 03-06-2009, 08:25 AM
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I agree that oil didn't cause our current problems, but I'm not so sure I'd pin it on corrupt political policies. Personally, I think the financial meltdown is due to too much easy money floating around Wall St, and too much easy access to other people's money. Specifically, I believe troubles began when the big Wall St investment banks started going public. For years they operated as partnerships - huge, gigantic partenrships - but partnerships, nonetheless. When the guys in the trenches put money at risk, a large part of it was their firm's money, and they knew that sooner or later they had to answer to the partners. After these firms went public they had a flood of other people's money to play with - and the guys in the trenches found increasingly risky ways to gamble with it. After all, losing money that belongs to some faceless stockholders isn't the same as getting called to the big conference room to answer to some senior partners who lost some of their own money based on your roll of the dice.

For an example, I wiki'd Goldman Sachs history to check out my theory. They were in business for well over a hundred years as a partnership. Had some shaky times during the Depression, but managed to keep their risk/reward ratios at levels that allowed them to stay in business. Their IPO was in 1999 - that's just 10 years ago. Greed and easy access to other people's money and only 10 freakin' years to drive a firm founded in the 1800's into the ground! I don't believe the investment banks would have made so many risky bets if they still had more of their own skin in the game. No wonder there's no financing to keep the wheels of commerce turning - the Wall St bankers allowed billions and billions and billions of other people's money to go poof!
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Old 03-06-2009, 09:33 AM
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Originally Posted by tprice View Post
Got a 94 with 215K and I PARKED MY HEMI last year in "protest".

Even though gas is cheaper I still drive the civic


I guess they wonder what caused all the economic problems, HIGH GAS PRICES FOR 2-3 YEARS gradually choked out the economy

Same here. Picked up a 96 civic and parked the truck. Paid for itself already.
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Old 03-06-2009, 11:44 AM
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If it's "maniupulation" they need some lessons in economics - prices at the pump have been falling around here lately.

Ya just gotta love unsubstantiated conspiracy theories. They're so popular now.
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Old 03-06-2009, 12:41 PM
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Price , I think you are right on target. That was the trigger for many of our current problems. Fear naut WADR you missed the whole point.
Now I think my wife summed up the whole Petrocrisis thing in one sentence "Any successful parasite avoids killing it's host".
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Old 03-06-2009, 03:44 PM
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Originally Posted by sr31aj View Post
I agree that oil didn't cause our current problems, but I'm not so sure I'd pin it on corrupt political policies. Personally, I think the financial meltdown is due to too much easy money floating around Wall St, and too much easy access to other people's money. Specifically, I believe troubles began when the big Wall St investment banks started going public. For years they operated as partnerships - huge, gigantic partenrships - but partnerships, nonetheless. When the guys in the trenches put money at risk, a large part of it was their firm's money, and they knew that sooner or later they had to answer to the partners. After these firms went public they had a flood of other people's money to play with - and the guys in the trenches found increasingly risky ways to gamble with it. After all, losing money that belongs to some faceless stockholders isn't the same as getting called to the big conference room to answer to some senior partners who lost some of their own money based on your roll of the dice.

For an example, I wiki'd Goldman Sachs history to check out my theory. They were in business for well over a hundred years as a partnership. Had some shaky times during the Depression, but managed to keep their risk/reward ratios at levels that allowed them to stay in business. Their IPO was in 1999 - that's just 10 years ago. Greed and easy access to other people's money and only 10 freakin' years to drive a firm founded in the 1800's into the ground! I don't believe the investment banks would have made so many risky bets if they still had more of their own skin in the game. No wonder there's no financing to keep the wheels of commerce turning - the Wall St bankers allowed billions and billions and billions of other people's money to go poof!
YUP!! Thank you for pointing this out.

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