13 comments on A gentle cough in the direction of the NYT
Comments can no longer be added to this story.
Search The Oil Drum with Google
Recently on TOD:World
TOD:Local
- Home Buyers Demand Short Commutes, Efficient Homes (with Backyards, Parking, lots of Square Feet)
- Streets: Utilitarian Corridors or Livable Public Space
- Summer Streets a Success!
TOD:Europe
- IEA WEO 2008 - Fossil Fuel Ultimates and CO2 Emissions Scenarios
- The IEA WEO 2008: Will coal usage be phased out?
- Oilwatch Monthly - November 2008
TOD:Canada
- The Round-Up: October 24, 2008
- Compressed Air Energy Storage - How viable is it?
- Oil Megaproject Update (July 2008)
TOD:ANZ
Blogroll
Energy Sites
- The Coming Global Oil Crisis
- Die Off
- Dry Dipstick
- Energy Bulletin
- From the Wilderness
- Life After the Oil Crash
- Peak Oil Crisis
- Peak Oil News and Message Boards
- Powerswitch
- Rigzone
- Matthew Simmons
- Wolf at the Door
Environment & Sustainability Sites
- The Daily Green
- EcoGeek
- Eco Street
- Green Car Congress
- Green Options
- green.alltop.com
- Gristmill
- RealClimate
- Sustainablog
- Treehugger
- WorldChanging
Blogs
- The Big Picture
- Casaubon's Book
- Cleantech Blog
- Clusterf
k Nation (Jim Kunstler) - The Cost of Energy
- David Strahan
- The Energy Blog
- Entropy Production
- European Tribune
- GraphOilology
- jeffvail.net
- Mobjectivist
- Peak Energy (Australia)
- Peak Energy (USA)
- R-Squared
- Resource Insights
Finance & Economics Blogs
- Calculated Risk
- Ecological Economics
- Econbrowser
- Environmental Economics
- Infectious Greed
- The Mess That Greenspan Made
- Mish's Global Economic Trend Analysis
Organizations
“My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel.”
—Saudi saying
User login
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
Personnel
- Editors: Prof. Goose, Heading Out, Stuart Staniford, Nate Hagens
- DrumBeat Editor: Leanan
- Contributors: ace, Engineer-Poet, Gail the Actuary, jeffvail, JoulesBurn, Khebab, Robert Rapier
- TOD:Local: Glenn
- TOD:Europe: Chris Vernon, Euan Mearns, Francois Cellier, Jerome a Paris, Luís de Sousa, Rembrandt, Rune Likvern, Ugo Bardi
- TOD:Canada: benk, Libelle
- TOD:ANZ: Big Gav, Phil Hart, aeldric
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
Supplies are up relative to demand. Prices are falling. It is a correction in the upward trend. OPEC wants to sell. I pull up at the local gas station and want to buy. Everyone is happy.
Yes, your criticism is of "futures" prices, by which you mean prices for crude oil not in December or January but perhaps March or June.
But those prices are led about by the current price as a horse is by its bridle. The most fear or greed can add or subtract is a dollar or two.
Whatever Mr. Halfin may say about the matter, you and I both know that anyone buying June 2006 crude oil at the current price of $59 is going to make money so long as he or she can hold till delivery.
And 2011 crude at $52? Well now, that is irrational.
You can not know that. It is the price of risk that stops people from speculating largely even though the supply/demand equation is close to clear.
Yeap, what this means is that maybe with 90% confidence I could say that price will go up. But with how much? And how do you know that it would be in these 90% not the 10% left?
Now look at the market. Maybe 80% of the futures deals are an insurance against future price volatility. If speculators (20%) manage to influece the price significantly (say futures go to 100$/barrel) the spot price will also grow to say 95$ (because it would become cheaper to buy now and store until maturity). But at 95$ there would be a disbalance because producers would not be able to clear stock and storing crude would cause huge loss, consequetivly both prices will drop. It turns out that the marginal barrel matters for the futures price, and only a major change in market expectations can change that.
In short I believe now is a good opportunity to become a speculator... anybody know how I can participate?