Saudi slashes oil output, says market oversupplied

What I can't understand is that while the cost of crude a barrel is falling the price at the pumps is still going up!
Can someone inform me why this is?

reply to post by RufusDriftwood


It's a very intricate network that takes a while for the price drop to register at the pump. It seems unreasonable to expect the price to drop immediately.

Originally posted by unityemissionsIt's a very intricate network that takes a while for the price drop to register at the pump. It seems unreasonable to expect the price to drop immediately.

I admit my ignorance on the economics of the oil industry.

However, I am curious and have been for some time that when an Arab farts (any crisis in which the price per barrel goes up) sideways in his tent the price of gas at the pump (despite the fact that the gas was likely manufactured from oil purchased 6 months ago at those prices) immediately jumps several cents but when the price of a barrel drops we have to accept that the resultant price takes time to make the decline?

I would wager there is someone profiting on the manufacture of these "shortages" and "gluts"....and the delay between the decline and the speed of the increase. I am just unsure who that is; is it at the pump, the refinery or at the commodity market?

Originally posted by unityemissions
reply to post by RufusDriftwood

 

It's a very intricate network that takes a while for the price drop to register at the pump. It seems unreasonable to expect the price to drop immediately.

But will it drop or will they create yet another problem in the middle east which will force up the price yet again?
I think the price of petrol at the pump is most peoples biggest concerns. Those that haven't as yet been made unemployed by this corrupt government could find themselves having to quit their jobs because they can't afford to drive to work! I'm one of them...

Originally posted by anumohi
buy an electric car and move closer to the food, then you wont have to buy their stupid oil anymore.

if everyone just looked deeper into alternatives these OPEC ass holes would die off and disappear because no one would need them any longer.

find another way people, adapt and overcome

Hell yeah! Your right we all need to tell opec they can kiss are *** by doing just what you said.

Originally posted by RufusDriftwood
What I can't understand is that while the cost of crude a barrel is falling the price at the pumps is still going up!
Can someone inform me why this is?

There is not a publicly accessible single inventory list of all the gasoline inventories of all the major, producers, wholesalers and retailers. There are estimations made. Such data sheets are proprietary compiled in confidentiality by private companies. Other such data sheets are compiled by the DoE considered sensitive by the DoE. The speculators know this. Private industry will lie about inventories making statements in their best interests. Such as let's say Gulf Oil says their refined gasoline inventories are low when they are actually high. Then ExxonMobile says the same thing and so on. Then speculators use these lies to drive up prices. Remember there is no public data on the inventories just statements made by industry executives in press releases. Gasoline is not kept in floating roof storage tanks like crude is, so no one can do an aerial survey. So it's all guessed really. Estimated.

Inventory estimations are based on how many contracts are being offered. How many contracts are being sold. These contracts are price insurance policies on the N.Y. merc for example. Then those policies are followed after close through estimating demand as they are estimated being consumed. AAA is a good source for that. People who do this are considered gasoline inventory analysts, but there are no inventories to be analyzed, so really they're not. According to those people inventories of gasoline mathematically work out to be high right now. However the industry says, "no" they are not. The media reports what the industry claims. The speculator capitalize on those reports, and we all then get ripped off at the pump.


Hope this helps your understanding.

Originally posted by unityemissions
reply to post by RufusDriftwood

 

It's a very intricate network that takes a while for the price drop to register at the pump. It seems unreasonable to expect the price to drop immediately.

Explain why every time there is an oil supply fear issue the very next day the price at the pump jumps? Crude jumps and gasoline jumps accordingly simultaneously, but it's slow to react when there is an opposite effect? WHY?

Originally posted by FarBeyondDriven69

Originally posted by anumohi
buy an electric car and move closer to the food, then you wont have to buy their stupid oil anymore.

if everyone just looked deeper into alternatives these OPEC ass holes would die off and disappear because no one would need them any longer.

find another way people, adapt and overcome

Hell yeah! Your right we all need to tell opec they can kiss are *** by doing just what you said.

I believe what OPEC is doing right now making production changes is that they want to expose to the world how much speculation is affecting price. They can see at a glance at a supply and demand curve they could make a lot more money pumping more at lower price. That's called true price equilibrium. The news media is lying about true equilibrium by just not reporting on it. Falsely claiming that the FED is just printing money and that's it's causing inflation. That it's OPECs fault for restricting supply when the world is a wash in oil at the moment.

They HATE and I mean HATE the N.Y. merc. They are Arabs, South Asians (Iranians) and people like Chavez in South America who believe the N.Y. Merc is ran by "Jew Masons." Ridiculous sounding I know. They believe Jews are manipulating the price where speculators are making bank and they are. Thing is I dunno how many Jews are actually involved or how many are Masons. This is a West vs ME thing mostly. Classic crusaders vs Muslims conflict. That's how they perceive it anyway.

I perceive it as a bunch of manipulative opportunistic investment bankers, speculators, who are deriving capital from all over the world to speculate and manipulate the markets to drive up prices by deliberate design.

reply to post by RufusDriftwood


Hey man, I sense we got off on the wrong foot. I am really not that kind of cynical monster like that post of mine might describe me as... If you check my thread/post history you can see I am just as sensitive to the ways of the world as the next guy on here...

I know what I wrote might have sounded pretty grotesque but let me hand it to you this way: it is a two-way win; if I lose all my investments, it is an even greater fortune to be had because that means somehow we have found resource in great abundance that can replace not only oil but also foodstuffs and precious metals. Now, that would pay off much more, and on a much higher level than my most moderate cash sum (it isn't a "fortune" by a long shot).

I do, however, feel pretty much guilt over investments like these and that is why I compensate by also buying ethical bonds and so in an attempt to make up for what wicked games I am playing...
Hate to admit that I am a mere human and I can't help taking advantage of the end times. Predicting the market is all such a sitting duck these days. Rest assured it will not last many more years before it all comes crashing down, probably taking my money with it as it heads for the abyss.
Hopefully, I will have had time to turn most of it into life supporting hard ware by then.

If you still feel like to egg&flame me, I am at your guilty service.

Originally posted by Raud
reply to post by RufusDriftwood

 

Hey man, I sense we got off on the wrong foot. I am really not that kind of cynical monster like that post of mine might describe me as... If you check my thread/post history you can see I am just as sensitive to the ways of the world as the next guy on here...

I know what I wrote might have sounded pretty grotesque but let me hand it to you this way: it is a two-way win; if I lose all my investments, it is an even greater fortune to be had because that means somehow we have found resource in great abundance that can replace not only oil but also foodstuffs and precious metals. Now, that would pay off much more, and on a much higher level than my most moderate cash sum (it isn't a "fortune" by a long shot).

I do, however, feel pretty much guilt over investments like these and that is why I compensate by also buying ethical bonds and so in an attempt to make up for what wicked games I am playing...
Hate to admit that I am a mere human and I can't help taking advantage of the end times. Predicting the market is all such a sitting duck these days. Rest assured it will not last many more years before it all comes crashing down, probably taking my money with it as it heads for the abyss.
Hopefully, I will have had time to turn most of it into life supporting hard ware by then.

If you still feel like to egg&flame me, I am at your guilty service.

You're not guilty of nothing but being one of the lucky ones who may actually benefit in these hard times. I too own my own house, drive a nice car and have a few bob stashed away in the bank in case of emergencies. There's nothing wrong with that. What I objected to was you seemed to delighting in it while the people around you are suffering. Don't forget these hard times will catch up with us all sooner or later.
Respect to you for coming forward and explaining your position.

For all we know, Saudi Arabia is long past peak oil production.

They boosted their 'known reserves' in the 80's...right after they stopped leeting external audits happen...

I would say it is very safe to assume that most of the Mid-East (OPEC Members) have been lying about their reserves for going on 20 years.

The laws of demand and supply apply only if there is an actual competition. If there is no competition, more efficient motors will result in RISING oil prices, in an attempt to counterweigh declining sales with more profit per barrel.

No matter how efficient your car is you still need to buy from the cartel. If you say f++k you to the cartel and buy a car with crazy milage, use public transport more, the cartel says, no F++K YOU and increases the price per barrel. There is no winning for your wallet, unless there is a real competition, an indipendent supplier outside of Opec, but we have seen how that played out for Saddam Hussein when he sold too cheap.