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212 comments on DrumBeat: July 8, 2008

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garyp on July 8, 2008 - 10:10am Permalink | Subthread | Parent | Comments top

$140 out a 2013 seems like a steal, and no mucking about with the real world black stuff.

Mind you, buying a defunct station also sounds like an interest proposition, although I'll guess the tanks only have a finite life? A petrol station, a forest, some farmland - I wonder if there is anywhere where these are all close together?

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andybts on July 8, 2008 - 10:49am Permalink | Subthread | Parent | Comments top

The trouble with buying futures is the counterparty risk. If things are as bad as I think they might be by 2013, I'm not sure who'll be around to honour such a contract.

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GoodTower on July 8, 2008 - 11:18am Permalink | Subthread | Parent | Comments top

See my longer post below. If you are long and the price rises you can withdraw your profits. The market works this way precisely to reduce counter party risk. I agree that a contract requiring delivery of $140 oil in 2015 might not be honored if it is $500 then but if you are attentive you should have withdrawn most of the gain before the expiration date.

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mcgowanmc on July 8, 2008 - 10:51am Permalink | Subthread | Parent | Comments top

Thank you for your reply.

In today’s uncertain financial environment, it is essential to avoid counterparty risk wherever possible.

As opposed to performance risk-"mucking about with the real world black stuff."

A petrol station, a forest, some farmland - I wonder if there is anywhere where these are all close together?

Yes, there is. But I'm there already. 8D

BTW your statement reminds me of a Yazoo City, MS-Capital of Kudzu- joke.

Considering old gas stations on US HWY 49, the best way to mulch kudzu is with used oil and cinder blocks. 8D

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Consumer on July 8, 2008 - 10:57am Permalink | Subthread | Parent | Comments top

You are taking the same counterparty risk buying the real stuff and storing it until 2013. People will take your money now, and sell you oil, but will the guy who comes to get the oil in 2013 bring you any money?

The risk may be higher or lower with actuals vs. futures, I don't know, but it's the same type of risk, and shouldn't be written off.

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mcgowanmc on July 10, 2008 - 8:49am Permalink | Subthread | Parent | Comments top

No. Because you've got the actuals in hand.

It's now "performance" risk. And who's talking about a guy coming in 2013?

And while you're waiting, you use it yourself( more on request).

The only way you get hurt is you can't afford to store it.

And if you can't afford to store it, you shouldn't be in the market anyway.

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creg on July 8, 2008 - 2:19pm Permalink | Subthread | Parent | Comments top

8D "mulch kudzu is with used oil "

lots better uses: some mixed w/ diesel, siphyon thru a fiber rope to clean & reuse,... then again can't eat those things; course u can mulch kud w/ lots of things.

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kdolliso on July 8, 2008 - 2:34pm Permalink | Subthread | Parent | Comments top

KUDZU,

Coming to a "Filling Station" near you, soon:

http://domesticfuel.com/

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wisco on July 8, 2008 - 11:32am Permalink | Subthread | Parent | Comments top

http://www.firstfuelbank.com/history/default.asp

The First Fuel Bank in Minnesota, founded in 1982, lets their 8,000+ members lock in to fuel at present-day prices. I wonder what portion of their account holders are peak-oil aware?

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212 comments on DrumBeat: July 8, 2008

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