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Thread: Price for a barrel of oil

  1. -1
    phinfan3411's Avatar
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    Price for a barrel of oil

    I wanted to do a new thread on the problems we are having, as a country with our oil/gas prices. As I was getting some figures together I ran across this article that I found very interesting, and basically challenged what I was about to write.

    http://www.marketoracle.co.uk/Article4793.html

    It might be old news to some of you, but it put a little light at the end of my tunnel today.

    God, I want to buy a gas guzzler!
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    Dolphan7's Avatar
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    This ticked me off!

    This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.
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    phinfan3411's Avatar
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    Quote Originally Posted by Dolphan7 View Post
    This ticked me off!

    Me too, I can't wait for the bottom to fall out!
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    branflakecereal's Avatar
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    Quote Originally Posted by phinfan3411 View Post
    Me too, I can't wait for the bottom to fall out!
    I have to admit, I don't have a complete grasp on how they get away with this.

    How WOULD the bottom fall out?
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    phinfan3411's Avatar
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    Quote Originally Posted by branflakecereal View Post
    I have to admit, I don't have a complete grasp on how they get away with this.

    How WOULD the bottom fall out?
    I am no expert either, but from the article, the actual value of a barrel of oil is about 60 a barrel, and I get this from the statements about it being about 60% overvalued.

    I believe it is inflated by the "perceived" dangers (war,sabotage etc.) perceived higher use season (now), ease of buying (only 6% to buy), but possibly a combination of our usage going down, more being pumped (Nigeria) huge amount found recently (Brazil), and even the oil big wigs admitting it is over valued-can you say dot-com bubble?

    I don't know if all of this will pan out, but it does make sense to me, it can only go so high, before it will completely cripple our economy, and then who are they going to sell all that oil to? We account for 50% of the world consumption (I think), and if our economy is hurt, I can't help but think China's would he hurt in turn, everything is related....
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    Dolphan7's Avatar
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    Instead of our Congress grilling oil execs over windfall profits, maybe they should work on legislation prohibiting selling oil futures?
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    phinfan3411's Avatar
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    Quote Originally Posted by Dolphan7 View Post
    Instead of our Congress grilling oil execs over windfall profits, maybe they should work on legislation prohibiting selling oil futures?
    Or at least some type of change in the way they do business, I think they will have to do it.
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    The_Dark_Knight's Avatar
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    I'm not much in to government regulation of business. I believe it to be contrary to the free market and capitolism, but oil is a different story. Oil is the base of our nation's energy policy...oil is the base of our economy and as such, the base of our national security. But after reading this article, I'm inclined to agree that the Congress needs to take SOME action on oil futures. I'm ignorant regarding this business, but I know that this is out of control and the nation is going to pay dearly for it.

    I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
    -Winston Churchill

    All things being equal, when you eliminate the impossible, whatever remains, however improbable, must be the truth.
    -Sir Arthur Conan Doyle
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  9. -9
    Maynard the Hammer's Avatar
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    there is no doubt that there is an oil bubble, imo. the problem is there is some artificial controls to prevent it from popping as it should as i see it.

    but our own monetary policy has created this problem too. as the dollar weakens, the price goes up as oil is traded in dollars...so it takes more dollars to equal the same amount of oil. i believe i read that if the dollar rises by 20%, the price of oil will drop dramatically.

    if we get our heads out of our butts and start drilling in our our backyards, the price will go down. i have even read that if we simply announced plans to drill extensively in ANWR for example, the price of oil would drop $20/barrel overnight
    special thanks to in flames for the avatar and sig



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    DolFan31's Avatar
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    But that'll only increase demand in the long run, and thus, increasing prices. Look, at some point there will be a huge crash in inventories because supply will eventually shorten. Experts have already agreed that we have reached peak oil. We must switch to an alternative, multi-source energy economy that is sustainable long term. We must invest in these new technologies, not put more money into a growing problem.
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