Question about oil and congress....

Matt414
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Edited Date/Time 1/26/2012 9:13pm
I don't know all the details on how this would work, and I doubt anyone here will exactly either. But, why can't someone in congress put the oil companies under a hearing? Didn't something very similar to all this happen back in the early 80's with Bell south? Congress put them under a hearing, and determined that they had a monopoly on the market and weren't practicing fair trade? And then broke the company up into smaller ones, which seem to have just been slowly growing back into bell south or rather ATT.

Is this possible, or am I missing a big piece of the puzzle.
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txmxer
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5/29/2008 9:07am
There have been ongoing investigations, but nothing of substance.
Racer92
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5/29/2008 9:10am
Matt, dont you remember Standard Oil from your history lessons?

Google it.
BMSOB
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5/29/2008 11:28am
Gov't discloses investigation of crude-oil market

23 minutes ago

WASHINGTON - Federal regulators are six months into a wide-ranging investigation of U.S. oil markets, with a focus on possible price manipulation.
ADVERTISEMENT

The Commodity Futures Trading Commission says it started the probe in December and is taking the unusual step of publicizing it "because of today's unprecedented market conditions."

Crude prices have risen more than 42 percent since early December, when they hovered below $90 a barrel. Gasoline prices are nearing a national average of $4 a gallon, up from about $3.20 a year ago.

The agency said details of the investigation remain confidential.
KAWboy14
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5/29/2008 2:58pm Edited Date/Time 4/16/2016 7:07pm
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers and they are the ones jackin it up....when the brokered oil is jacked up then the companies who sell their own, jack theirs up to match.

The Commodity Futures Trading Commission

The Shop

BMSOB
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5/29/2008 3:02pm
Record profits? Billions in a quarter?
KAWboy14
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5/29/2008 3:05pm
BMSOB wrote:
Record profits? Billions in a quarter?
most products are sold through several layers, what i was stating is, is it the beginning layer, the guy digging the oil or some other layer that is driving the madness?
BMSOB
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5/29/2008 3:18pm Edited Date/Time 4/16/2016 7:07pm
Somehow or other it ends up on the oil companies balance sheet as a profit. The guy that digs for it works for them, the geologist who found it works for them, the guy who markets their products works for them & in many cases the guy who trades on the open market works for them or is controlled by them. Lately the speculators from Wall St. have gotten into the act as a hedge against all those bad loans they financed trying to recover their losses. Definately has something to do with it.
Ivan
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5/29/2008 5:57pm
Maybe Soros, Michael Moore and the Hollywood crowd should invest in an oil company so they can sell it for a fair price and be heros. I don't understand why they don't take their record profits and put up. if there's that much profit in oil (Exxon profit about 9%) then there should be plenty of rich BushExxoncapitalism haters out there to make things right. Maybe Bill Gates should join in (Microsfoft profit 35%), hell he has the bank.
5/29/2008 7:22pm
KAWboy14 wrote:
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers...
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers and they are the ones jackin it up....when the brokered oil is jacked up then the companies who sell their own, jack theirs up to match.

The Commodity Futures Trading Commission
That's an easy one. The oil speculators on Wall Street and all the overseas markets bid on contracts for future delivery of oil. They don't intend to take delivery, but like an auction, the oil contracts go to the highest bidder. So, before the call date(the date you have to sell the contract or take delivery of the product), the speculator sells the contract to someone else, hopefully at a profit. The bidding for the futures contracts drives the prices up. The kicker is, there are also futures contracts for heating oil, diesel, jet fuel, gasoline, etc...So the process repeats itself and the end user gets to pay for both sets of trades.

By the way...I read an article on Yahoo news a week ago about the crude oil market investigation. In that article, it was stated that according to the Commodity Futures Trading Comission, in 2002, speculative trading of oil futures accounted for 25% of the market transactions. The other 75% was accounted for by refiners who actually took delivery of the oil they purchased. As of 2007, speculative trading accounted for 75% of the market transactions. So now, 75% of the oil futures contracts purchased by refiners are purchased from speculators. The speculators make billions, the oil companies make billions, and the refiners and end consumers end up paying the bill.

In my opinion, the only thing governments around the world can do is cap the percentage of oil, gas, heating oil, etc... futures to reduce the amount of speculative trading. They couldn't cap the price of the futures because somewhere, a country wouldn't cap the price, and the countries with caps wouldn't be able to purchase the products they need.
xewbx
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5/29/2008 8:04pm
KAWboy14 wrote:
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers...
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers and they are the ones jackin it up....when the brokered oil is jacked up then the companies who sell their own, jack theirs up to match.

The Commodity Futures Trading Commission
That's an easy one. The oil speculators on Wall Street and all the overseas markets bid on contracts for future delivery of oil. They don't intend...
That's an easy one. The oil speculators on Wall Street and all the overseas markets bid on contracts for future delivery of oil. They don't intend to take delivery, but like an auction, the oil contracts go to the highest bidder. So, before the call date(the date you have to sell the contract or take delivery of the product), the speculator sells the contract to someone else, hopefully at a profit. The bidding for the futures contracts drives the prices up. The kicker is, there are also futures contracts for heating oil, diesel, jet fuel, gasoline, etc...So the process repeats itself and the end user gets to pay for both sets of trades.

By the way...I read an article on Yahoo news a week ago about the crude oil market investigation. In that article, it was stated that according to the Commodity Futures Trading Comission, in 2002, speculative trading of oil futures accounted for 25% of the market transactions. The other 75% was accounted for by refiners who actually took delivery of the oil they purchased. As of 2007, speculative trading accounted for 75% of the market transactions. So now, 75% of the oil futures contracts purchased by refiners are purchased from speculators. The speculators make billions, the oil companies make billions, and the refiners and end consumers end up paying the bill.

In my opinion, the only thing governments around the world can do is cap the percentage of oil, gas, heating oil, etc... futures to reduce the amount of speculative trading. They couldn't cap the price of the futures because somewhere, a country wouldn't cap the price, and the countries with caps wouldn't be able to purchase the products they need.
Why sweat........speculative markets like this always correct themselves. At some point.......somebody is going to be left holding a futures contract that cost more than they can unload it for, and they're going to lose money.

It's just another balloon. There are fewer and fewer investors that take a long approach and diversify across a wide spectrum........today, they all look for the next bubble, and try and ride it as far as they can. Everybody wants a quick buck.

There's nothing stopping anybody on here from putting up some bucks and buying oil futures........ride the wave up. You can make a ton of money, and it ain't rocket science.

'Course........if it the price drops and you can't cover it.........you're fucked. That's the problem with these balloons.......eventually the music stops.......and somebody ends up without a chair.
jtomasik
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5/29/2008 8:10pm
A few questions:

Why won't OPEC increase production?

About 10 years ago, I read an article in Scientific American that described the situation of the world's oil supply. Now, granted that recovery technologies have improved. However, that article predicted the economically recoverable oil supply on the planet would go over the 50% mark right around 2010, and prices would begin climbing.

Any relation?
WhipMeister
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5/29/2008 8:13pm
BMSOB wrote:
Somehow or other it ends up on the oil companies balance sheet as a profit. The guy that digs for it works for them, the geologist...
Somehow or other it ends up on the oil companies balance sheet as a profit. The guy that digs for it works for them, the geologist who found it works for them, the guy who markets their products works for them & in many cases the guy who trades on the open market works for them or is controlled by them. Lately the speculators from Wall St. have gotten into the act as a hedge against all those bad loans they financed trying to recover their losses. Definately has something to do with it.
You conveniently left out the mineral rights holder of the oil in the ground, who collects over 70% of the selling price. Most of the time, in the US, anyway, that's ordinary people like your neighbors. The oil companies are left to do their evil with the portion that's left over.

Guess that makes those ordinary folks evil manipulators stealing from the rest of us, too, right?
KAWboy14
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Austin, TX, USA
5/29/2008 8:16pm
KAWboy14 wrote:
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers...
i think (and someone can correct me if im wrong) but i dont think the "oil companys" get that much. the oil is sold to brokers and they are the ones jackin it up....when the brokered oil is jacked up then the companies who sell their own, jack theirs up to match.

The Commodity Futures Trading Commission
That's an easy one. The oil speculators on Wall Street and all the overseas markets bid on contracts for future delivery of oil. They don't intend...
That's an easy one. The oil speculators on Wall Street and all the overseas markets bid on contracts for future delivery of oil. They don't intend to take delivery, but like an auction, the oil contracts go to the highest bidder. So, before the call date(the date you have to sell the contract or take delivery of the product), the speculator sells the contract to someone else, hopefully at a profit. The bidding for the futures contracts drives the prices up. The kicker is, there are also futures contracts for heating oil, diesel, jet fuel, gasoline, etc...So the process repeats itself and the end user gets to pay for both sets of trades.

By the way...I read an article on Yahoo news a week ago about the crude oil market investigation. In that article, it was stated that according to the Commodity Futures Trading Comission, in 2002, speculative trading of oil futures accounted for 25% of the market transactions. The other 75% was accounted for by refiners who actually took delivery of the oil they purchased. As of 2007, speculative trading accounted for 75% of the market transactions. So now, 75% of the oil futures contracts purchased by refiners are purchased from speculators. The speculators make billions, the oil companies make billions, and the refiners and end consumers end up paying the bill.

In my opinion, the only thing governments around the world can do is cap the percentage of oil, gas, heating oil, etc... futures to reduce the amount of speculative trading. They couldn't cap the price of the futures because somewhere, a country wouldn't cap the price, and the countries with caps wouldn't be able to purchase the products they need.
ah this explains a lot....thanks

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