RE: High Petrol/Gas Prices Coming - Don't Blame Big Oil
Interesting — although not all that surprising — information! People who yell at store clerks over the price of ANYthing need to have their heads examined... even if they claim to be "just venting."
I kept waiting for one element to show up in your article (but maybe that's for another post altogether!), which is the reality that gas/petrol is not really a "product," it's a "commodity." As such, isn't the price somewhat subject to fluctuations that have little to do with market forces (supply, demand, cost to actually get the stuff out of the ground) and a lot to do with trading on Wall Street?
I'm trying to remember when it was, but there was a period (maybe 15? 20? years ago) where Southwest Airlines was kicking the collective airline industry's butt because they had a large stake invested in aviation fuel futures... and they were flying on $1.70/gal fuel when everyone else was paying $4.00 spot price.
Anyway, a great educational article!
=^..^=
You are correct about the commodity issue and futures trading really sets the price, but it can't manipulate demand globally. It is a whole other article with a bunch of complexities, but suffice it to say that more money is being made in the oil futures market than anywhere else. The difference is that there is always a loser too so theoretically it should balance out. The churn ratio (the amount of times a barrel of oil is sold before it gets to the actual purchaser ) for oil is over a thousand (maybe more). Natural gas has a churn ratio in the hundreds in the U.S., but in Europe it is only about 12 - 15. The real reason Europe hates the Russians. lol The bankers can't make money off of it.
Aha! So that’s where the fat old cigar smoking white men come in!
They are more like decrepit old men with that "old man stink" if you ask me. lol The financial markets like to be able to play with other people's commodities so they can make money for nothing (and get their chicks for free - old song line). Of course, this industry is even bigger with lots of working slobs just like me also, but I am afforded a few caricatures, right? ;)
When you get right down to it...aren’t we all caricatures to some extent? 😄