Oil Price spikes up by $25/bbl

[Regulator75]

Wowza!

[Superflyer]

How are those two things even related?
Gov't is going to bail out home owners and banks so lets shoot up oil prices?

[Wookie]

Hmmmmm.
I have nothing more to add.

[ricoFlame]

good god. that's no fun.

[Claeren]

The same 'poor institutions' and their wealthy investors that the American taxpayer is (potentially) bailing out of a huge mess can now afford to move their capital back to oil and re-place all of their positions that they recently had to vacate to raise capital to cover what they had thought were their own losses (instead of taxpayer losses).

Must be nice, the taxpayer providing $1.5 Trillion in essentially free money so that you can place wild bets in another market instead of owning-up to your losses.




Claeren.

[Ronald Pagan]

Originally Posted by Claeren

The same 'poor institutions' and their wealthy investors that the American taxpayer is (potentially) bailing out of a huge mess can now afford to move their capital back to oil and re-place all of their positions that they recently had to vacate to raise capital to cover what they had thought were their own losses (instead of taxpayer losses).

Must be nice, the taxpayer providing $1.5 Trillion in essentially free money so that you can place wild bets in another market instead of owning-up to your losses.




Claeren.

LOL

Too true, too true.

I agree with your take, this is exactly what is happening. Instead of keeping a whole bunch of cash on hand with the possibility of write-downs, these banks and major investors are now diverting their capital to low-risk commodity market causing huge price increases.

What a joke.

[RougeUnderoos]

Originally Posted by Superflyer

How are those two things even related?
Gov't is going to bail out home owners and banks so lets shoot up oil prices?

I honestly don't believe anyone knows. They are all just faking it.

If this story said "oil slumped by $25 a barrel on the heels of the government bailout" with all the same reasons given, we'd have the same reaction.

[HotHotHeat]

Does anyone remember the front page of the Calgary Herald during the summer the day that oil prices were over $150? The headline read something like 'Calgary oil executives celebrate the good times' and there was a picture of 3 fat old guys sitting at a fancy restaurant drinking what was probably a $5000 bottle of wine. Every time I see something like this happen that headline and picture come back into my memory. It's the most self righteous BS I've ever seen. Not to mention, the editor of the Herald is a clearly a complete ###### bag. Do they really think most of their costumers wanted to read something about how a few rich guys are getting richer? Bunch of crooks.

[Kidder]

So we can expect gas at the pump to hit $2.00/litre by... oh, late afternoon?

Direct correlation you know.

[browna]

Originally Posted by RougeUnderoos

I honestly don't believe anyone knows. They are all just faking it.

If this story said "oil slumped by $25 a barrel on the heels of the government bailout" with all the same reasons given, we'd have the same reaction.

Yes.

I like the justification in some articles today initmating that "oil's increasing as people are seeing it as a hedge against inflation".

Isn't that supposed to be something less volatile, like gold?

Ridiculous that investors suddenly turned a commodity like oil into an extension of thier own schitzophrneic market barometer. Has OPEC even said I think in the past months to affect the supply (thus the demand=price)?

[Bobblehead]

It's why economics is a SOCIAL science.

But humans can do strange things.

In all my econ courses, the "average" person is discussed. The problem is, specific person is the "average" person. Over the moderate to long run, the trends will eventually reflect this mythical person; but to try to apply the scenario to a small sample over the short term will not provide a strong correlation.

[RougeUnderoos]

Originally Posted by HotHotHeat

Does anyone remember the front page of the Calgary Herald during the summer the day that oil prices were over $150? The headline read something like 'Calgary oil executives celebrate the good times' and there was a picture of 3 fat old guys sitting at a fancy restaurant drinking what was probably a $5000 bottle of wine. Every time I see something like this happen that headline and picture come back into my memory. It's the most self righteous BS I've ever seen. Not to mention, the editor of the Herald is a clearly a complete ###### bag. Do they really think most of their costumers wanted to read something about how a few rich guys are getting richer? Bunch of crooks.

Is anyone in Calgary doing this? I doubt it. Clearly oil execs in Calgary will benefit, but they aren't making the price skyrocket based on some vague "reasons" tied to the bank bailout in the States.

[Wookie]

Originally Posted by RougeUnderoos

Is anyone in Calgary doing this? I doubt it. Clearly oil execs in Calgary will benefit, but they aren't making the price skyrocket based on some vague "reasons" tied to the bank bailout in the States.

Yes they are. It's covered in their morning meeting. Right before the lunch meeting at The Ranchmans to set gas prices.

[arsenal]

So question for the market guys out there.
I have yet to even read a report that the bail out has been approved. So are people in the market speculating that the companies that are going to receive the bail, going to enter the oil market?

If these companies that are getting a bail out go into the oil market, they will inflate the price themselves due to huge volumes. So the price could even get any higher.

A few weeks ago, oil was going down because the middle east wasn't in crisis, and 2 hurricanes set to "destroy" the refineries in Texas and Louisiana didn't live up to expectations. So oil went down to to around $90 / barrel. What struck me as strange, was usually when there is impending doom and gloom, oil usually goes up.. this time it went down. Anyone care to explain that one to me?

It just seems more and more at least with oil, there is some serious market manipulation going on. Not sure from who, it just does feel "right".

[HotHotHeat]

Originally Posted by RougeUnderoos

Is anyone in Calgary doing this? I doubt it. Clearly oil execs in Calgary will benefit, but they aren't making the price skyrocket based on some vague "reasons" tied to the bank bailout in the States.

I wouldn't suggest solely, but it's not as if they're oblivious to what's going on.

[Bobblehead]

When a share price can be almost wiped out by an old newspaper article without a date being discovered by the Google news browser, I'm not surprised by anything. Markets are jittery and almost any rumour can make people do strange things. And when it becomes a herd mentality, Oile jumps $25 in a day, stock markets jump 600+ points, etc.

[burn_this_city]

This is what you get for not closing the commodity market to people who can't actually take possesion of a product like oil. Too many hedgefunds are buying up oil contracts which they will liquidate at the end of the month.

[Bring_Back_Shantz]

Originally Posted by arsenal

So question for the market guys out there.
I have yet to even read a report that the bail out has been approved. So are people in the market speculating that the companies that are going to receive the bail, going to enter the oil market?

If these companies that are getting a bail out go into the oil market, they will inflate the price themselves due to huge volumes. So the price could even get any higher.

A few weeks ago, oil was going down because the middle east wasn't in crisis, and 2 hurricanes set to "destroy" the refineries in Texas and Louisiana didn't live up to expectations. So oil went down to to around $90 / barrel. What struck me as strange, was usually when there is impending doom and gloom, oil usually goes up.. this time it went down. Anyone care to explain that one to me?

It just seems more and more at least with oil, there is some serious market manipulation going on. Not sure from who, it just does feel "right".

I'm not exactly sure where you're going with this.
Seems to me that the lack of crisis in the middle east and two hurricanes being a whole lot less sever than expected hardly count as examples of doom and gloom that you would expect to cause oil to rise.

Seems to me that in those cases at least, the price of oil acted exactly as expected.

[arsenal]

Originally Posted by Bring_Back_Shantz

I'm not exactly sure where you're going with this.
Seems to me that the lack of crisis in the middle east and two hurricanes being a whole lot less sever than expected hardly count as examples of doom and gloom that you would expect to cause oil to rise.

Seems to me that in those cases at least, the price of oil acted exactly as expected.

Every other time a hurricane was headed to that area, price of oil went up. This time, it went down. Maybe I am off a little with the time line.
They could have been gone from the area, or the rigs sent word that they where fine, and then the prices went down.

[CGYTransplant]

Remember when the price of gas went up 15 cents overnight, and everyone had a fit and demanded that the government step in? Oil prices had just spiked, because the refineries in the US Gulf had shut down in anticipation of Hurricane Ike (most were able to get running again after Gustav, very few were down the whole time).

Only after Ike passed, and the refineries got up and running again, did the price of oil fall to $90-ish, and the price of gas fell again.