Explain to me how the existence of futures contracts pushes up the price of oil and how their removal would push down the price.
Explain to me how the existence of futures contracts pushes up the price of oil and how their removal would push down the price.
E
Elphaba
Guest
Sorry, did not mean put an end to futures contracts, but there should be trading limits. Since oil speculators have been blamed for increase, US Congress is on verge of introducing measures to limit specuation in oil futures, reason being without speculators, price would drop to $65-$70 a barrel.
U.S. Commodities future trading commision, has insisted speculation is not the cause...(they would wouldn't they!) Sovereign wealth funds buying up index futures via hedge funds. I think there should be trading limits to prevent excess speculation and should be addressed urgently.
U.S. Commodities future trading commision, has insisted speculation is not the cause...(they would wouldn't they!) Sovereign wealth funds buying up index futures via hedge funds. I think there should be trading limits to prevent excess speculation and should be addressed urgently.
E
Elphaba
Guest
Yikes....you were right! Do you have a crystal ball or something? Do you mind if I eat a cream bun instead, since I regretfully had to sell my shares in Tullow oil, broke even. (I enjoyed watching shares rise to 12.50 a few weeks back.) Interesting how falling oil prices seem to be pulling technology stocks down with them, cant figure that one out? The war in Georgia had little or no effect on price of oil either, baffiling turn of events. All down to low demand I suppose...
I'd recommend to everyone to read this book (the draft is online). It gives the numbers behind our energy consumption and the potential for switching to renewable. It's very enlightening.
BTW Pages 166 - 187 cover nuclear. I liked this example (just to pick one) "A French citizen’s lifetime share of high-level waste is the size of a golfball. "
BTW Pages 166 - 187 cover nuclear. I liked this example (just to pick one) "A French citizen’s lifetime share of high-level waste is the size of a golfball. "
Z
z109
Guest
Now try and imagine sixty million golf balls.
What's an Irishpersons lifetime carbon contribution ?
(not that I'm at all convinced about the 'carbon footprint' muck as diesels spew worse stuff into the air but less carbon so they're "better for the environment". Worse for the people living in the environment though
)
(not that I'm at all convinced about the 'carbon footprint' muck as diesels spew worse stuff into the air but less carbon so they're "better for the environment". Worse for the people living in the environment though
)Exactly, tiny amounts of waste.
The_Banker
Registered User
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Oil down to $105 dollars a barrel today. Maybe this thread should be renamed.
When oil peaked at $147 dollars the price at the pump in Cork was 136.9.
Now with oil at $105 dollars the price at the pump in Cork is (average) 128.9
I was in Athlone last weekend (before the international price falls yesterday and today) and the average price up the country was 122.9
With TESCO having no petrol stations in Cork I think we are suffering.
When oil peaked at $147 dollars the price at the pump in Cork was 136.9.
Now with oil at $105 dollars the price at the pump in Cork is (average) 128.9
I was in Athlone last weekend (before the international price falls yesterday and today) and the average price up the country was 122.9
With TESCO having no petrol stations in Cork I think we are suffering.
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Bad enough as that is, the ESB and Bord Gais price increases are also coming in, regardless of this price drop. Once prices go up there is never a hurry to bring them down again - particularly with monopolies.
LFC Murphy
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Isn't there something regarding the slump in sterling still keeping the wholesale price of oil high. Hence why we are not seeing the efects of the large drops at the pumps.......
Can someone confirm or deny this?
Can someone confirm or deny this?
Something I noticed at my local garages recently.
We did have a price decrease in petrol/diesel about 3 or 4wks ago. They proceeded to put big signs outside ALL the petrol stations proclaiming "PETROL PRICES DOWN" or "LOWER FUEL PRICES HERE NOW".
But 3 days ago they put another 3c on a litre of both unleaded and diesel, but the signs are still there.
And I thought the price for a barrel had dropped recently to the lowest in a low time ($105 per barrel) ?
We did have a price decrease in petrol/diesel about 3 or 4wks ago. They proceeded to put big signs outside ALL the petrol stations proclaiming "PETROL PRICES DOWN" or "LOWER FUEL PRICES HERE NOW".
But 3 days ago they put another 3c on a litre of both unleaded and diesel, but the signs are still there.
And I thought the price for a barrel had dropped recently to the lowest in a low time ($105 per barrel) ?
Correct,
As someone who works in the Oil industry, the value of the exchange rate between Euro/Dollar/Sterling has an effect.
For example:
In early July when the Euro was valued at about $1.57, then €1,000 would be worth about $1570. At €140 a barrel, this equates to aboout 11.2 barrels. (Ignoring things like Govt. Duty, NORA, etc)
However now that the Euro to Dollar is valued at about 1.45 then €1,000 is worth only $1450 dollar. At 105 per barrell this gives just over 13 barrels. So even tho the barrel value fell by about $35 we dont get the full impact.
Sorry, a messy example, but you get my drift.
Also, just a note on the price per litre of Petrol and Diesel:
In every litre of Petrol, the government takes 44.27 cent for Duty and also take approx. 21 cent vat. Total of over 65 cent for the government.
The duty for Diesel is 36.81 per litre and again the vat would be 21% of the retail price.
They also charge 1 cent per litre for NORA(http://www.nora.ie/)
The_Banker
Registered User
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Oil down to $101 today and still the price at the pumps remain stubbornly high.
Oil has dropped by almost a thrid on International markets and yet the price at the pumps has dropped by a single digit percentage.
You can argue dollar rises or fall or blame Nora but the fact is, we are being totally RIPPED OFF.
Oil has dropped by almost a thrid on International markets and yet the price at the pumps has dropped by a single digit percentage.
You can argue dollar rises or fall or blame Nora but the fact is, we are being totally RIPPED OFF.
When crude goes down in price it takes a fair bit of time to be seen at the pumps/home heating oil.
When crude goes up, the forecourt prices are up before the end of the day.
And just check out this story:
http://news.bbc.co.uk/2/hi/business/7605584.stm
The price of crude is now nearly 50% lower than it was in April, so why is there little or no change in the price of home heating oil/petrol prices?
S
Simeon
Guest
How come the Mods have not changed this to ..... "Oil: how low will it go?"
ubiquitous
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A very sweeping statement, imho.
Don't think so.
I live in a village with 3 stations within 50 yards of each other, and we were chatting about it in work recently.
If there is an article on the news about price rising the prices at the pumps are up within 2 days guaranteed. Yet I was led to believe that it takes 6-8 weeks for crude price changes to filter through to the home heating oil and forecourt prices. We all know this is nonsense.
Its simple and clear for all to see. If the price of a barrel falls then the reduction isn't passed on to consumers. If it rises, it definitely is.
If there has been a 50% decrease in the price of crude since July then why is there no big change in the price to me and you? And I appreciate that you may start talking about dollars, exchange rates, strong/weak currency, sterling etc, and these things will probably not allow the price reductions to match the reduction in a barrel, but surely we should be seeing reductions more than we are.
The_Banker
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Oil down to $98 a barrel today. Still paying 126.9 cent a litre for petrol in Cork City.
When oil was €147 a barrel I was paying 136.9 cent a litre in Cork City.
Any forecourt owners on this site who can explain this?
When oil was €147 a barrel I was paying 136.9 cent a litre in Cork City.
Any forecourt owners on this site who can explain this?
Ok, not a forecourt owner, but here goes in trying to create a straightforward explanation.
When Oil was $147 a barrell, it was converting to about €91
Now $98 is converting to about €73. So while the barrell dropped by €18 (19%) the price you paid has dropped by 10 cent per litre or 8%. You also need to take into account that some of these stations may have purchased their fuel nearly a week ago, when the barrell was about $7-8 higher.
Not in any way defending the pricing of Petrol or Diesel, but just trying to explain how the different aspects of the world economy affect our buying prices!!