The end of OPEC?

[Sheldon]

Yes there is. Oil is no different from any other commodity, and when something is expected to disrupt supplies, people rush to buy more of it in the near term so that they can be sure that they'll have it before it runs out. Everything I say is absolutely true. Just take a moment to study economics and you'll see that.

And as for your argument that we cannot control how much of a commodity will be available, that's also not true. OPEC is a cartel, and if it cuts production (assuming none of its members cheats), world oil prices will go up; that's a given. How much suppliers are willing to supply depends on the price; the higher the price, the more they're going to want to produce, because the more money they'll make. The lower the price, the less they're going to want to produce because they're going to want to wait for prices to go up before they produce more.

Now look you just countered you own argument...We cannot control the supply of a commodity but we can by pumping more or less oil so it is controlled, and therefore not a true commodity. We can create a artificial shortage or glut, so you actually agreed with what I said without realizing it. A commodity is a future market item, one we have no actual control over, once on the market is is no longer a commodity but a wholesale or retail item.

There is no gamble on some natural disaster killing off the crop that can never be replaced. They will always pump oil out of the ground until they run dry, by that day they will have figured some way to make enough oil from old biomass or to mine the hydrocarbons from the atmosphere of Jupiter. Until that day it will still not be a commodity as long as I can say pump me some out of the ground. By your logic Water is a commodity after all I pump it out of the ground, everyone needs it, and all rush to buy it in a disaster, so want me to open the faucet and pour you some? It's a bargain at fifty bucks a barrel!

People do not rush out to buy more if oil, we buy the final product once the refiners are though with it, N they can set up to produce more of a specific product in the cracking process within limits. As I said before we can only store so much of the stuff, so a panic buy is a very temporary thing, although my PU has a 37 gallon tank I cannot put in 40 gallons any more than you can over fill your tank and this can all be calculated by trending the market, the only limiting factor is the delivery system and the amount of refined fuel in the ground at any particular moment of time.

[tattedupboy]

Now look you just countered you own argument...We cannot control the supply of a commodity but we can by pumping more or less oil so it is controlled, and therefore not a true commodity. We can create a artificial shortage or glut, so you actually agreed with what I said without realizing it. A commodity is a future market item, one we have no actual control over, once on the market is is no longer a commodity but a wholesale or retail item.

There is no gamble on some natural disaster killing off the crop that can never be replaced. They will always pump oil out of the ground until they run dry, by that day they will have figured some way to make enough oil from old biomass or to mine the hydrocarbons from the atmosphere of Jupiter. Until that day it will still not be a commodity as long as I can say pump me some out of the ground. By your logic Water is a commodity after all I pump it out of the ground, everyone needs it, and all rush to buy it in a disaster, so want me to open the faucet and pour you some? It's a bargain at fifty bucks a barrel!

People do not rush out to buy more if oil, we buy the final product once the refiners are though with it, N they can set up to produce more of a specific product in the cracking process within limits. As I said before we can only store so much of the stuff, so a panic buy is a very temporary thing, although my PU has a 37 gallon tank I cannot put in 40 gallons any more than you can over fill your tank and this can all be calculated by trending the market, the only limiting factor is the delivery system and the amount of refined fuel in the ground at any particular moment of time.

Could you please not try to play gotcha? You can try to make my words mean whatever you want, but the fact remains that supply and demand, not speculation, are what cause the price of oil, or any other commodity for that matter (and yes, oil is a commodity) to be what it is.

And yes, we do rush to buy more gas in the event of an event that has the potential to disrupt supply. Because it is an increase in demand, and not supply (refineries aren't able to produce as much because they're already not producing at capacity, and storms and other such things decrease their capacity even more), the price will go up. Speculation plays no role in any of that.

[Sheldon]

Could you please not try to play gotcha? You can try to make my words mean whatever you want, but the fact remains that supply and demand, not speculation, are what cause the price of oil, or any other commodity for that matter (and yes, oil is a commodity) to be what it is.

And yes, we do rush to buy more gas in the event of an event that has the potential to disrupt supply. Because it is an increase in demand, and not supply (refineries aren't able to produce as much because they're already not producing at capacity, and storms and other such things decrease their capacity even more), the price will go up. Speculation plays no role in any of that.

Yep refining capacity is down and we have not built any new refineries in how many years, but have been dismantling them instead, at least they did here in MI... back to the hurricane, so what is their excuse the rest of the year... I seriously doubt they have one.

What we really need is to drill and make it now, and mandate the construction of more refineries. Yesterday I took a drive to a flea market about forty miles west of here, and the gas was almost forty cents a gallon cheaper, now you can site transportation cost but one of the primary pipeline delivery points is less than 10 miles east of me, or you can say it is demand but this was in a tourist trap area (cough gouge).

N I am not playing got you last, but when you have your own logic thrown back at you.... What I am trying to do is teach you a simple lesson in economics, however you still continue to tightly hold onto your misconceptions.

So just one more time...
In big business the more people that have their hands in the process the more a product will cost, and yes that includes oil. Oil was not a commodity back in the 70's and the cost per barrel was regulated by world demand, and it worked just fine just as it had in the previous 60 plus years. Then someone decided to make it a commodity and the price has continuously risen since. This is not driven by consumption, a little by inflation, not by increased production cost, but by the commodities brokers. Their is virtually no risk in oil, the futures money does not go the the producers of the oil as it does in corn or any other true commodity. Oil is not a valid commodity and saying it is does not make it so!

[tattedupboy]

Yep refining capacity is down and we have not built any new refineries in how many years, but have been dismantling them instead, at least they did here in MI... back to the hurricane, so what is their excuse the rest of the year... I seriously doubt they have one.

What we really need is to drill and make it now, and mandate the construction of more refineries. Yesterday I took a drive to a flea market about forty miles west of here, and the gas was almost forty cents a gallon cheaper, now you can site transportation cost but one of the primary pipeline delivery points is less than 10 miles east of me (cough gouge).

N I am not playing got you last, but when you have your own logic thrown back at you.... What I am trying to do is teach you a simple lesson in economics, however you still continue to tightly hold onto your misconceptions.

So just one more time...
In big business the more people that have their hands in the process the more a product will cost, and yes that includes oil. Oil was not a commodity back in the 70's and the cost per barrel was regulated by world demand, and it worked just fine just as it had in the previous 60 plus years. Then someone decided to make it a commodity and the price has continuously risen since. This is not driven by consumption but by the commodities brokers. Their is virtually no risk in oil, the futures money does not go the the producers of the oil as it does in corn or any other true commodity. Oil is not a valid commodity and saying it is does not make it so!

Oil IS a commodity. Commodities have the following characteristics: they are an article of trade or commerce, and can be processed or resold. If that doesn't describe oil, then I don't know what does. So what if it wasn't always sold in commodities markets? That didn't make it any less of a commodity then than it does now.

One of us is certainly misguided, but it isn't me. I have studied markets for years and I know how they work. Your arguments demonizing commodities brokers are hollow and emotional, not fact-based.

[Sheldon]

Oil IS a commodity. Commodities have the following characteristics: they are an article of trade or commerce, and can be processed or resold. If that doesn't describe oil, then I don't know what does. So what if it wasn't always sold in commodities markets? That didn't make it any less of a commodity then than it does now.

One of us is certainly misguided, but it isn't me. I have studied markets for years and I know how they work. Your arguments demonizing commodities brokers are hollow and emotional, not fact-based.

That describes nearly everything on the planet, but every thing is not a commodity, I stand by my facts.

[tattedupboy]

That describes nearly everything on the planet, but every thing is not a commodity, I stand by my facts.

And I stand by mine.