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Once again, speculators behind sharply rising oil and gasoline prices

Charlotte Observer -- U.S. demand for oil and refined products — including gasoline — is down sharply from last year, so much that United States has actually become a net exporter of gasoline, unable to consume all that it makes.

Yet oil and gasoline prices are surging.

On Tuesday, oil rose past $106 a barrel and gasoline averaged $3.57 a gallon — thanks again in no small part to rampant financial speculation on top of fears of supply disruptions.

Other factors driving up prices include last month's bankruptcy of Petroplus, a big European refiner, and a recent BP refinery fire in Washington state that's temporarily crimped gasoline supply along the West Coast; gas now costs an average of $4.04 a gallon in California.

"Speculation is now part of the DNA of oil prices. You cannot separate the two anymore. The

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Submitted Mar 09, 2012 By: bar1035

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geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 13, 2012 12:53:48 AM Ignore geminijax Report Abuse Shockjock1961, the USD hasn't been debased in history as much as it has been in the last three years. As the saying goes, you ain't see nuthin' yet!
geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 13, 2012 12:52:28 AM Ignore geminijax Report Abuse honda0105: over the past 8-10 years, many variables have changed. Those include decline in the value of the USD, significantly increased demand from emerging markets countries, no increase in refining capacity, etc. Speculators have been around for centuries. Remember Tulip Mania? These days, hedging activities also cause price moves. With a potential Iran crisis, with all the subsequent aftereffects, hedging activity is in full force. When you consider that 20% of the world's crude supply passes through the Straits of Hormuz, even the slightest threat of disruption moves prices violently. Bottom line: the factors affecting futures prices are complex and the prices today tend to move very fast, relative to even 5 years ago.
Shockjock1961 Champion Author Illinois Posts:20,107 Points:2,183,210 Joined:Apr 2006	Message Posted: Mar 12, 2012 9:39:05 AM Ignore Shockjock1961 Report Abuse "BTW, should the USD decline against major currencies, the price jump here when it comes to crude oil and gasoline, will be very significant. What's more, those days are coming" What do you mean coming??? It's been in decline for over a decade now...
honda0105 Champion Author Tallahassee Posts:18,599 Points:1,607,570 Joined:Nov 2008	Message Posted: Mar 12, 2012 6:00:17 AM Ignore honda0105 Report Abuse gemini: when you think back about 8 or 10 years ago, we had prices in the 1.xx range. That was before specutraitors were able to move offshore. By those, I don't mean a few thousand dollar investing, I'm talking big corporation, pig banks, etc. investing millions and billions in the gambling.
geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 12, 2012 12:35:03 AM Ignore geminijax Report Abuse honda0105, imho, the same reasons hold. Any anticipated cause that may disrupt supply is cause for futures to move up. Right now, Iran is one big reason. Although Iran exports crude oil, they import gasoline. Then again, there's the refinery situation here in the US. It's been about three decades or so since a new one has been built. Obviously, demand hasn't remained steady for all those years, here and esp. in emerging markets. Had it not been for the mess in Europe (the PIIGS), we would've seen higher gasoline prices because of the currency effect. IMHO, some of the price increases are because of that, with international investors moving out of USD based assets into other currencies, esp. those of countries with rich natural resources. Speculators do exist. However, speculation goes both ways, i.e. some make a bundle and some lose their shirts. Then again, it is very hard to separate "pure" speculation from hedging activities. I don't see how that can be done in a reliable manner. That article (OP) is speculating about speculators. We are now exporting gasoline because it fetches a higher price internationally than domestically. That results in higher domestic prices. Re gasoline inventories increasing, I'd be willing to bet some countries are doing the same, should the crude oil supply be disrupted by the Iran situation. Naturally, gasoline will command a higher price on international markets. All in all, there are several factors that drive gasoline prices and the interaction of those factors is quite complex. It gets even more complicated with the international demand and currency effects. BTW, should the USD decline against major currencies, the price jump here when it comes to crude oil and gasoline, will be very significant. What's more, those days are coming.
honda0105 Champion Author Tallahassee Posts:18,599 Points:1,607,570 Joined:Nov 2008	Message Posted: Mar 11, 2012 7:12:18 AM Ignore honda0105 Report Abuse gemini: it still does not explain the high pump prices. Even though the barrel price is 2/3rds of what it was at its high in 2008, the price is at the pump is inching up to the prices seen in August 2008.
geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 11, 2012 12:14:53 AM Ignore geminijax Report Abuse Pete12, it's because of the PROBABILITY of supply disruption in the Middle East, over the Iran situation. That's why refiners are willing to lock in higher prices now, lest they be even higher in the future. When the crude futures move up, so do the gasoline futures, since the raw material (crude oil) for gasoline (and other byproducts of the refining process) is expected to be more expensive in the future. That's a very simplistic explanation. However, hopefully it suffices to explain how/why the futures prices move.
Pete12 Champion Author Albany Posts:4,871 Points:1,643,240 Joined:Nov 2005	Message Posted: Mar 10, 2012 7:04:42 PM Ignore Pete12 Report Abuse I can't figure why gas futures are so high with the supply holding steady?
sparky808 Champion Author Honolulu Posts:2,993 Points:596,760 Joined:Sep 2011	Message Posted: Mar 10, 2012 7:02:11 PM Ignore sparky808 Report Abuse Thank you for posting.
remay Champion Author Houston Posts:6,958 Points:2,115,665 Joined:May 2006	Message Posted: Mar 10, 2012 4:56:35 PM Ignore remay Report Abuse Once again??? So they STOPPED at some point?
CaesarI Sophomore Author Augusta Posts:212 Points:26,640 Joined:Nov 2011	Message Posted: Mar 10, 2012 1:48:35 PM Ignore CaesarI Report Abuse Still don't care
dave27johnson Champion Author Chicago Posts:1,787 Points:406,700 Joined:Feb 2012	Message Posted: Mar 10, 2012 12:55:39 PM Ignore dave27johnson Report Abuse "Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it's almost the reverse."
geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 10, 2012 12:47:04 PM Ignore geminijax Report Abuse HYEgasCA, excellent, truthful post. The number of whiners here is amazing. To date, I have not met a single mainstream Dem/liberal supporter who actually understands how money/business/investing, etc. works AND can explain it coherently. Most of their whines/complaints usually fall under the common headings of "the govt. should do something", "the rich are greedy", "big oil cos. are ripping us off", etc. Here's a few home truths. The so-called greedy rich are the ones who provide jobs. About 65-70% of the jobs in the US come from small businesses. Under Comrade Obama's definition of "rich", those who own these very businesses will be taxed heavily. Only an utter moron won't realize that means slower economic growth and less jobs created. As far as Big Oil is concerned, these whiners ought to read the annual reports of Big Oil for the last few years. I have. When crude oil prices rise beyond about $120/bbl, Big Oil's profit margins DROP. ExxonMobil (XOM) refines 5 M bbls/day and extracts only 3.5 M bbl/day. Ergo, they have to buy the difference on the open mkt. The higher crude prices go, the less profit they make. BTW, XOM's net profit margin is right in the middle of the S&P 500, i.e. there are as many cos. MORE profitable than them as there are on the other end. All the ignoramuses do is focus on the absolute numbers, rather than the relative ones. Plus, we have liberal politicians calling for higher taxes to grab more money from them. Newsflash: those profits belong to the shareholders, not the govt. So, rather than blowing money on non-essential items, learn to invest, see your money grow, lower your effective tax rates and don't let politicians bamboozle you into killing the geese (job providers) that are laying the golden eggs (jobs)! Sorry for the rant. However, sometimes these whiny posts just become too much!
Shockjock1961 Champion Author Illinois Posts:20,107 Points:2,183,210 Joined:Apr 2006	Message Posted: Mar 10, 2012 10:47:46 AM Ignore Shockjock1961 Report Abuse Sure, you can tell by the gas guzzlers wit a single passenger, traveling 20+mph over the speed limit that Americans are feeling "ripped off" by the higher gas prices...
MelB70 Champion Author Boston Posts:7,597 Points:1,322,450 Joined:Apr 2008	Message Posted: Mar 10, 2012 10:05:48 AM Ignore MelB70 Report Abuse Prices are up because they finally figured out they can charge us whatever, totally rip us off and we will pay, because we need that gas...End story
honda0105 Champion Author Tallahassee Posts:18,599 Points:1,607,570 Joined:Nov 2008	Message Posted: Mar 10, 2012 9:52:46 AM Ignore honda0105 Report Abuse wow, I'm just flabbergasted at how many people think the president of the US has the power to control the global oil market prices. Wow...
gawxnative All-Star Author Atlanta Posts:510 Points:229,865 Joined:Aug 2006	Message Posted: Mar 10, 2012 9:30:38 AM Ignore gawxnative Report Abuse What else is new..Seems like the change is a complete disconnect with American consumers
mrpc90 Champion Author Illinois Posts:8,137 Points:1,926,015 Joined:Dec 2004	Message Posted: Mar 10, 2012 8:11:13 AM Ignore mrpc90 Report Abuse And Stephen Chu doesn't even own a car. I suppose that the government provides a car and a driver for him?
WES03 Champion Author Maryland Posts:4,833 Points:1,263,420 Joined:Feb 2009	Message Posted: Mar 10, 2012 7:49:55 AM Ignore WES03 Report Abuse Energy Secretary Steven Chu admits the Obama administration isn't interested in lowering gas prices. That's rather revealing.
Hobby001 Champion Author Michigan Posts:5,093 Points:1,183,090 Joined:Jul 2007	Message Posted: Mar 10, 2012 7:27:46 AM Ignore Hobby001 Report Abuse Comprof, HYEgasCA: Thanks for as truthful a post as I have ever seen on this web site. I agree totally!
tomok Champion Author Portland Posts:32,962 Points:2,343,560 Joined:Aug 2006	Message Posted: Mar 10, 2012 5:39:09 AM Ignore tomok Report Abuse United States has actually become a net exporter of gasoline, unable to consume all that it makes. Yet oil and gasoline prices are surging. And, Big oil is selling fuel and natural gas on the world market for higher prices, there will be NO price reduction for the cost of fuel or natural gas IN the US. Barry will support natural gas and oil production for sale on the world market to pay for his ‘spending gone wild’ addiction. The US ‘oil and natural gas resources’ belong to the citizens of this country and are to be used by those same citizens! Speculators, manipulators and the banks continue to unfairly and unjustly make the driving public pay higher prices at the pump for their benefit. Whatever the size or shape of the vehicle is, Produce and ‘Drive’ vehicles with high MPG, are very reliable, have a ‘reasonable’ cost and a good ‘value’ for the money. Consider using other forms of less expensive transportation to lower your cost, if possible. The price of fuel at the pump is too high! 12/22/2012!
comprof Champion Author Houston Posts:6,849 Points:1,354,800 Joined:Jul 2009	Message Posted: Mar 10, 2012 1:20:37 AM Ignore comprof Report Abuse HYEgasCA: Thanks for as truthful a post as I have ever seen on this web site.
N5EXY Champion Author Austin Posts:5,487 Points:1,508,655 Joined:Jul 2004	Message Posted: Mar 10, 2012 1:03:30 AM Ignore N5EXY Report Abuse Good grief.
HYEgasCA Champion Author Fresno Posts:2,111 Points:909,125 Joined:Dec 2008	Message Posted: Mar 10, 2012 12:52:45 AM Ignore HYEgasCA Report Abuse I'm so sick of the nut cakes on this website who say GREED, GREED, GREED,....every time speculator is mentioned This is typical liberal jargon. You guys sit around screwing up the capitalist system with all your environmentalist crap, by putting restrictions on everything that exist. You guys have NO idea of how a company operates yet you guys are experts in everything. A perfect example is President Obama whose only career is a community organizer. Why don't you guys go out and produce something rather than sit on your lazy butts, waiting for Obama to send you other peoples money. Its not the speculators causing these problems it stupid liberals that have NO though process what so ever on how anything works. If you guys knew how things operated you would know that communism/socialism is a failure. Oh and remember this, the only reason you guys have the luxuries that you do is because of people like me who do something rather then sit on our butts complaining about the very system that gives us so much. Greed, Greed, Greed, said by people who say give me, give me, give me
abacus44 Champion Author Toms River Posts:3,470 Points:747,290 Joined:Jan 2011	Message Posted: Mar 10, 2012 12:39:58 AM Ignore abacus44 Report Abuse Tell us something new.
DJRIO Champion Author Miami Posts:8,035 Points:1,423,635 Joined:Jan 2008	Message Posted: Mar 10, 2012 12:35:13 AM Ignore DJRIO Report Abuse I guess no remember that we are not the only one in using oil in the world.speculators are the government elected officials that wont endorse natural gas. with that said oil will have competition. oil will drop in price.
MidNJ Champion Author New Jersey Posts:7,546 Points:1,171,810 Joined:Sep 2009	Message Posted: Mar 10, 2012 12:32:44 AM Ignore MidNJ Report Abuse LCSTEEL, "Where did this person just wake up from, how long have they been sleepping???" !!!!!! Great question!!
umitb Champion Author Indianapolis Posts:3,670 Points:842,465 Joined:Apr 2010	Message Posted: Mar 10, 2012 12:31:30 AM Ignore umitb Report Abuse ok
Beboper Champion Author Virginia Posts:8,717 Points:2,161,840 Joined:Oct 2005	Message Posted: Mar 10, 2012 12:30:13 AM Ignore Beboper Report Abuse just greed
Rageagainsttm Champion Author Tampa Posts:8,293 Points:1,901,030 Joined:Jul 2007	Message Posted: Mar 10, 2012 12:30:00 AM Ignore Rageagainsttm Report Abuse u know it
LCSTEELERBOB Champion Author Gary Posts:2,961 Points:720,130 Joined:Oct 2008	Message Posted: Mar 10, 2012 12:28:34 AM Ignore LCSTEELERBOB Report Abuse where did this person just wake up from, how long have they been sleepping???
RangerTrainer Champion Author Ottawa Posts:2,448 Points:607,495 Joined:Nov 2010	Message Posted: Mar 10, 2012 12:27:55 AM Ignore RangerTrainer Report Abuse Reality
SparkieMi Champion Author Kalamazoo Posts:3,253 Points:586,650 Joined:Sep 2011	Message Posted: Mar 10, 2012 12:27:28 AM Ignore SparkieMi Report Abuse Greed and more greed...
carloco75 Champion Author Richmond Posts:3,706 Points:599,165 Joined:Oct 2010	Message Posted: Mar 10, 2012 12:27:18 AM Ignore carloco75 Report Abuse No sit...
geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 10, 2012 12:26:04 AM Ignore geminijax Report Abuse LOL! The amount of ignorance displayed in this thread is truly astronomical. The number of posters merely complaining about something that they don't understand in the first place is astounding. I see posters throwing around terms like "speculator", "insider trading", etc. I'm willing to bet money none of the complaining posters have any real knowledge of the terms they're using so very loosely. Come on, all those who have been complaining. Prove me wrong!
MidNJ Champion Author New Jersey Posts:7,546 Points:1,171,810 Joined:Sep 2009	Message Posted: Mar 10, 2012 12:25:42 AM Ignore MidNJ Report Abuse The real question is about Robo voting, and WOW how does an article generate so many votes?
Buddy2264 Champion Author Tampa Posts:11,647 Points:2,358,955 Joined:Oct 2005	Message Posted: Mar 10, 2012 12:25:15 AM Ignore Buddy2264 Report Abuse Is it speculation or devalue of the US dollar also?
feistyfella All-Star Author Georgia Posts:881 Points:192,495 Joined:Jun 2010	Message Posted: Mar 10, 2012 12:23:55 AM Ignore feistyfella Report Abuse criminal ####s
MidNJ Champion Author New Jersey Posts:7,546 Points:1,171,810 Joined:Sep 2009	Message Posted: Mar 10, 2012 12:22:17 AM Ignore MidNJ Report Abuse Documentation is important!!! Acording to my records this article, posted by bar1035, is the top. It generated 71 votes so far. ???????? The question is WHY???
hotrod_brother Champion Author Tampa Posts:12,606 Points:2,232,195 Joined:Oct 2006	Message Posted: Mar 10, 2012 12:20:55 AM Ignore hotrod_brother Report Abuse I speculate that I will never win the weekly gas prize on this site. Been cashing in 5,000 points for 5 tickets a week for years now.
52MPG Champion Author Dayton Posts:7,252 Points:1,739,755 Joined:Apr 2006	Message Posted: Mar 10, 2012 12:20:47 AM Ignore 52MPG Report Abuse speculation and possible disruptions both seem to be driven by politics.
liao Champion Author Montreal Posts:3,437 Points:1,426,285 Joined:Sep 2008	Message Posted: Mar 10, 2012 12:19:08 AM Ignore liao Report Abuse Speculators always exists in the stock exchange market looking for big bucks, manupilating all kinds of commodities. It hurts more for everybody when it comes to oil.
frostyWV Champion Author West Virginia Posts:2,339 Points:519,235 Joined:May 2011	Message Posted: Mar 10, 2012 12:18:38 AM Ignore frostyWV Report Abuse tell us something we don't know.
pastorpaulcg Champion Author Virginia Posts:3,615 Points:775,785 Joined:Dec 2010	Message Posted: Mar 10, 2012 12:17:36 AM Ignore pastorpaulcg Report Abuse Unfortunate
TheSicilian Champion Author Jacksonville Posts:5,369 Points:1,467,800 Joined:Feb 2009	Message Posted: Mar 10, 2012 12:17:32 AM Ignore TheSicilian Report Abuse again proving that supply and demand would be better left alone Econ 101
Rudy Champion Author Detroit Posts:35,883 Points:3,744,905 Joined:Aug 2002	Message Posted: Mar 10, 2012 12:17:23 AM Ignore Rudy Report Abuse It's hard to hate OPEC when the speculator's pull crap like this. The government likes their hand in everything. When will the step in and do somehting about this!! Supply and demand is dead as far as oil is concerned.
geminijax Champion Author Jacksonville Posts:16,826 Points:2,725,950 Joined:Aug 2005	Message Posted: Mar 10, 2012 12:15:55 AM Ignore geminijax Report Abuse METEOR49, so why don't you CHOOSE to learn how to invest and profit from rising gas/crude prices? Now that learning process does take hard work. I know that for a fact.
Rappcommuter Veteran Author Virginia Posts:470 Points:553,515 Joined:Apr 2011	Message Posted: Mar 10, 2012 12:15:48 AM Ignore Rappcommuter Report Abuse Speculators amplify the gas price fluctuations.
Bigwaynef Champion Author South Carolina Posts:11,465 Points:2,079,785 Joined:Dec 2006	Message Posted: Mar 10, 2012 12:14:19 AM Ignore Bigwaynef Report Abuse Once again & again...
Bonito Champion Author Dayton Posts:15,740 Points:3,005,945 Joined:Jun 2004	Message Posted: Mar 10, 2012 12:13:55 AM Ignore Bonito Report Abuse Don't forget the RICH that the speculators work for! What goes around will come around!