Gas - $4.00/gal - What Day?

What day in 2008 will regular unleaded gas reach $4.00/gal?

  • Memorial Day - May 26th

    Votes: 21 32.3%

  • Fathers' Day - June 15th

    Votes: 11 16.9%

  • Independence Day - July 4th

    Votes: 19 29.2%

  • Labor Day - September 1st

    Votes: 9 13.8%

  • Not going to happen in 2008

    Votes: 5 7.7%
  • Total voters
    65
I am getting some knowledge or a better understanding of matters of trade, speculation and the rising cost of a commodity.

I have come to understand what traders, not investors, are doing and have come to know the difference. An interesting illustration was made to me yesterday that opened my eye.

While a tanker is being filled, the 'owners' of said quantity crude change multiple times. Once loaded, the same is happening. By the time the crude has reached its destination the 'stock' or 'ownership' of that crude has changed hands multiple, multiple times.

So when one says its the speculators that are raising the cost of fuel I am associating this to the same thing that speculators did to our housing market. They over inflated or over valued a product or commodity simply because they 'trade' it and want to 'hold it' to sell it at profit, to then buy it, to hold it, to sell it....to make a profit...and on and on.

Now I can see that there is a huge difference between traders and investors. Is my conclusion that traders, not investors, are causing these sort of issues with the cost of our commodities, and most in particular at this time our fuel cost?

It would seem, that if that is the case, more fuel supply is not the issue. The issue is with the supply of traders.
 
B5150 said:
I am getting some knowledge or a better understanding of matters of trade, speculation and the rising cost of a commodity.

I have come to understand what traders, not investors, are doing and have come to know the difference. An interesting illustration was made to me yesterday that opened my eye.

While a tanker is being filled, the 'owners' of said quantity crude change multiple times. Once loaded, the same is happening. By the time the crude has reached its destination the 'stock' or 'ownership' of that crude has changed hands multiple, multiple times.

So when one says its the speculators that are raising the cost of fuel I am associating this to the same thing that speculators did to our housing market. They over inflated or over valued a product or commodity simply because they 'trade' it and want to 'hold it' to sell it at profit, to then buy it, to hold it, to sell it....to make a profit...and on and on.

Now I can see that there is a huge difference between traders and investors. Is my conclusion that traders, not investors, are causing these sort of issues with the cost of our commodities, and most in particular at this time our fuel cost?

It would seem, that if that is the case, more fuel supply is not the issue. The issue is with the supply of traders.
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To an extent, yes.


What speculators can do is basically buy and sell large volumes of oil without putting much of the money up (and without fear of actual delivery of oil). For oil, if you buy 1 contract it basically deducts $2500 from your brokerage account but you are in control of 1,000 barrels of oil (1000 barrels x $130 a barrel...$130,000 worth of oil). Its like putting a down payment on a house. You put a small amount down but have the power to control the whole house.

Right now for every 1 cent change in oil, it $10 in terms of your gain/loss.

So you bought 1 contract, oil went up $1, you sold it, you make $1000.

You can do this with a click of a mouse at your home from any futures trading platform (downlaoded software). I use Tradestation myself.


But then you also have to take into account the large firms, airlines, sovereign wealth funds, that buy contracts to hedge their losses in the future. If I feel oil is going to go up in 3 months, I am going to buy contracts today to lock into that price. Now you can either sell it and take profit, or take delivery of that oil.


Most airlines and countries that subsidize oil always operate that way and get locked into fuel prices to hedge their losses. But eventually, it does catch up to you...


Unlike real estate, you have to keep buying over and over and over...



One note...this happens with all commodities as well. Corn, Wheat, Soybean, Gold, Silver, Steel, Cattle, Pork, etc....
 
I understand now what I thought it was. Yes, of course it goes across the board with all commodities.

In that respect it makes working for a living almost foolish. But of course you need that initial capital to start out with. Capital, where art though when I need you ;)

Thanks.
 
B5150 said:
I understand now what I thought it was. Yes, of course it goes across the board with all commodities.

In that respect it makes working for a living almost foolish. But of course you need that initial capital to start out with. Capital, where art though when I need you ;)

Thanks.
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Well, it sounds great if you win, but for the most part 90% of the people that try to do this on their own, fail.

Most people simply don't have the discipline to stick to a plan in which your account can fluctuate thousands of the dollars each day.

Futures are traded 24/7 so you need to have balls of steel to wake up and find that your down $2100 in overnight trading and be able to stick to your plan. Most can't....
 
Retarded?I don't think so.All Saudi Arabia has to say is we are cutting back on production and guess what happens?The prices go up.They said this morning that they will increase production and wow on my way home I saw a couple of gas stations that lowered there prices..So I think that you can control the prices to a certain extent.Now if you can prove this to be wrong then I will agree that my post is retarded.
 
Jmonster said:
Retarded?I don't think so.All Saudi Arabia has to say is we are cutting back on production and guess what happens?The prices go up.They said this morning that they will increase production and wow on my way home I saw a couple of gas stations that lowered there prices..So I think that you can control the prices to a certain extent.Now if you can prove this to be wrong then I will agree that my post is retarded.
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Oil went up yesterday after the Saudi announcement..not down. You are seeing the result of gas dropping last week..it had nothing to do with an announcement.
 
IMHO as long as we have more "traders" trading, and less "investors" investing, there may be no change to this for quite a long time. Am I wrong entirely or partly?
 
Traders follow the investors. The big boys change the price, not the "speculators".
 
whatt f... are u all complaining!! here in the netherlands we pay 1.68 euro per liter! based on some calculation i came up with this;

1 us gallon is 3.79 liter so that would make 6.37 euro for 1 gallon
6.37 euro = 9.24 USD

so in short, $9.24/gal regular unleaded!!!!!!!


and u guys think u got it bad...

most of it is tax by the way , based on a percentage, so the higher the prices, the more our government earns over the back of its own people....
 
How far do you commute to work? What is the average commute distance for your residents. Do you have an effective public transportation system? What are your average types of vehicles and their gas economy. How long has your gas price been stable? Has it doubled in the last 3 years? Do you have socialized healthcare?
 
B5150 said:
How far do you commute to work? What is the average commute distance for your residents. Do you have an effective public transportation system? What are your average types of vehicles and their gas economy. How long has your gas price been stable? Has it doubled in the last 3 years? Do you have socialized healthcare?
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All good points!

I talk to many people in Europe and Asia who make the point they pay more. Then I remind them that they live on an island, or a country the size of the New Jersey.

That being said I bought my buddies hybrid from him last week. The payoff period on gas savings alone should be about 2.5 yrs if we stay around $4 and the little cars hold their value very well. I kept the Avalanche since you cannot pull a trailer, or drive in the desert, or in snow and get very far with any kind of car.
 
B5150 said:
IMHO as long as we have more "traders" trading, and less "investors" investing, there may be no change to this for quite a long time. Am I wrong entirely or partly?
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For you guys who do a lot of investing on your own, how did you learn? I really want to start investing, but I don't really know where to start.
 
What kind of investing? Can yu give some detail as to what you are interested in?

Mutual funds
Stocks
Derivatives
Bonds
Property
Precious metals
etc...

There are a lot of different subjects?

My undergrad was in finance but I have to tell you I have learned far more from reading, talking to experts, and experience over time than the theory and analysis in school.
 
rcaz01 said:
What kind of investing? Can yu give some detail as to what you are interested in?

Mutual funds
Stocks
Derivatives
Bonds
Property
Precious metals
etc...

There are a lot of different subjects?

My undergrad was in finance but I have to tell you I have learned far more from reading, talking to experts, and experience over time than the theory and analysis in school.
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that is the direction that I so desperately need. What books to read, what moguls to look to for direction, etc. Primarily I want to learn about investing in stocks, bonds, and mutual funds.
 
Soup Nazi said:
Traders follow the investors. The big boys change the price, not the "speculators".
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After doing more talking and reading - I agree. All this speculator stuff is most likely smoke and mirrors.

There were REAL supply decreases in Nigeria recently.
 
Its as simple as this guys.C

Commodities are traded in USD's. The USD is losing value because your Goverments over the last 2 decades have spent big and have had to increase M3(broad money supply) to fund the spending spree.
Currency is no different to any other commodity, the more of it there is the less it's worth, combine that with the fact that global demnd for oil is rising every month as the expansion in China and now India gathers pace and oil prices are going nowhere but up. Forget whatever else you here.
The USD will continue to lose value and the downtrend is about to gather pace.
If you really want to protect yourselves against the on coming hyperinflation buy Gold and Silver or Platinum as they are going to skyrocket in value, way more than they have even to date. Gold could easily triple in value over the next 2 years.
If you wanna know how this will unfold look no further than the late 70's.
Only this time it's gonna get far worse because the US is broke and the rest of the world is waking up to the fact.
 
J. Peterman said:
coughiwasrightcough


:D
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it ALWAYS comes down after summer :D

I just dont think well see it as low as it was before....
Its still 4.05 at most stations round my parts and was as high as 4.89 (not the premium stations) at the peak.... diesel was well over 5 dollars and still hasnt hardly dropped at all.
 
jmh80 said:
LMAO!

Bump for all the people that were SCREAMING Big Oil and Bush!!!
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I dated a Hippie once...talk about a big oily bush.
 
1.59 is lowest over here (mardela springs, md), with 20 miles away still running with 1.79 (delaware). my buddy jeff has it at 1.51 in tn.

one question, what the ****?

edit: hah even f v c k is censored :P fuçk!
 
i love looking at these threads and seeing how many people were wrong months ago

1.63/gallon this morning
 
Gas/crude prices are down right at 70% since the peak in summer. Unreal. But if Opec has their way, they will cut production again on the 19th I think, it will probably shoot prices right back up. I think to somewhere above $70. They want 90-100 a barrell. But our economy cannot handle these prices. Look at what has happened because of this. We lost 533,000 jobs last month. The most in 34 yrs!!! Can't anyone see what high crude /gas prices does to our economy? And right now around Charlotte, it is between 1.60 and 1.70. That seems like a bargain, but I remember when it got there to begin with and I was commuting 110 miles a day, it started to hurt me. It is still high historically.
 
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