From the media? It seems half the "news" stories these days are nothing but pure speculation.

From big science? More and more science seems to be based on speculation and not hard, observable facts.

I know their agenda, which is to make money.

are zero sum game.  For every futures option on oil that is bought, someone had to write the option.  The buyer is betting the option is going to make it to black and the writer is betting that the price will not (so the writer can keep his 100 barrels of oil along with the nice fat juicy premium the buyer paid).

Therefore, you don't have to worry about speculators at all.  THEY HAVE NO EFFECT ON THE PRICES OF OIL.

such as airlines, trucking companies, etc. They are trying to buy ahead at what they think will be a lower price today than tomorrow. Many home heating distributors offer consumers the same chance in September. Commit to buying 1500 gals at X price and we'll deliver it to you in the winter at that price. Then they go out and commit to buying at a fixed price from their distributors.

If you are looking for a truly evil speculator try George Soros, the big money behind most far left Dims.

All airlines hedge, but the most successful is Southwest Airlines. Their cost I believe is somewhere in the $60 a barrel range for the next few  years. It's not that AMR, UAL & others don't do it, they just don't do it as well as LUV. Look at their profitability, or lack of, and stock price.

A non-union company that runs on common sense is, on Wall Street, worth more than United, Delta, USAir, Continental, etc totaled all together.

This is the core of the problem as it pertains to options on commodities and why it is different than options speculation in say, curremcy or common shares of publically traded companies

the fact that a large % of options are bought for actual delivery ENSURES that there will be sales. A chicken processor CANNOT, not buy the grain he needs. And if supply of grain in short, he's going to pay WHATEVER THE PRICE IS.

As a speculator, the only thing making me want to close my long position is news supply will be greater than expected.....there has been little of that in grains, oil, metals, etc

Longs are staying long on oil because Buttcrack is not showing them that he is willing to do something ina serious way about the supply/demand equation...

NOTHING would punish a speculator who is long oil more than a sane energy policy laid out in the same way the flooding in the midwest is driving corn past 8 bucks....

that's driving the price of corn. It's fucking ethanol that's been driving the price of corn every bit as fast as the price of oil, all this before the midwestern floods drove up the price another 30% or so.

Why is it though that nobody wants to impose a windfall profits tax on corn farmers?

How about coal, natural gas, steel, or any commodity for that matter? How about Microsoft, Google. I can name hundred's of companies with better earnings as a percentage of revenue than Exxon, Chevron, etc. The oil companies are the poster child of evil and greed according to Democrats. Of course, I wouldn't put it pass the Dems to tax companies they believe are making too much money.

Well potion trading is much more sophisticated than in the past where one person  bet prices going down and another bet on the prices going up. It is not that simple anymore, there are many ways of reducing ones risk through derivatives, currency trading etc. So, the buyer and seller both hedges their bets.

According to recent study by the energy department, the world wide demand has gone down 1.5% and production has gone up by 0.5%, This tells me supply and demand is not setting the market price.

Besides, most large speculative funds are financed by China and China has fixed price contracts and there ain't no free market there either.

Of course when one is making money from speculation they will argue speculation is not the cause just like a friend of mine who became multimillionaire selling specialized packing material to the defense dept. Try arguing with him, war was wrong and see what answer you get!

fucked supply all up. get this, producers of ethanol that use virgin feedstocks like corn and soyoil get $1.00/gal crdeit but producers who use recycled oil for biodiesel only get $.50.

""Why is it though that nobody wants to impose a windfall profits tax on corn farmers?""

Thing is, with corn in demand, they're all corn farmers. Last year, the concern was that if crop yeilds exceeded expectations the whole midwest would look like a sea of yellow, well, yeilds DID exceed expectations BUT, so did foreign demand so prices STILL skyrocketed.....

I remember clearly a time in the not too recent past it was incredible to consider loading up on $4 corn...

It seems like its just whenever total profit is higher than certain Dems think is acceptable.

A bigger problem, may be the biggest, is when demand goes up, so does price, and if you are the seller, do you want to produce more product, and have the price go down? So, you work hard to produce 100 widgets for 100 bucks, if you work harder, make 100 more widgets, you can then sell the 200 widgets for 100 bucks. Why would you? Maybe competition, but OPEC is a cartel. But if your customer says we're at a price point where we're going to make our own widgets, then you drop price or you will see price drop.

But if your customer is a Dimocrat, who never wants to do anything for himself, only pisses and moans, second guesses, never proposes a rational act, only pie in the sky foolishness, then you got nuthin to worry about.

who already makes some of your own widgets, and are capable of making more widgets in an environment of spiraling widget costs. The answer should be obvious.

"Raise taxes on your own widget makers, and prohibit them from exploiting the best of your own widget making terrotories." That's the Dims answer to rising widget prices.

AMR, UAL, et. al. don't have the credit rating to hedge their oil purchases. Large traders will not make a bet with you if they think you can't pay (you wouldn't make a $100 bet on the World Series with me if you thought I didn't have $100 in my name). Only LUV has the financial stability (BLU also might).

LUV's $60/bbl hedge wore of a year or two ago (as I recall). But your main point - that they're cost of oil is considerably below that of other airlines - is accurate.

Geezer, you are correct. It is possible for speculators to raise the cost of a commodity, but that is not happening.

To speculat on oil, one of two things must happen. If speculators are raising the cost of oil futures, then the price of spot oil (oil for immediate delivery - you give me $130, I hand you a barrel of oil) would be lower than the futures price. Right now, the spot price is actually higher, which indicates that futures speculators are not raising the price.

The other way to speculate is to stockpile oil. That is, buy it and store it and refuse to sell it. For this to happen, oil inventories would have to rise. The latest inventory report was just this week and it shows that oil stockpiles have been going down as oil has been going up. Therefore, there is no speculative premium in the current price of oil (in fact, there may be a slight negative premium).

All this according to my oil-trading friend. BTW, while GOPsters have been been going on right-wing media outlets telling everyone that oil is just in a speculative bubble (if it wasn't, then it would make GWB look very, very bad), the very same people have been hiring him out to run their money.

How do you explain Costco doing better than Wal-Mart?

I think Dems don't like oil companies because they have funded the Republicans and kept us from developing a few sensible efficiency standards, like COLA standards (MPG requirements, in other words), and more efficient power plants, etc. You can complain about the Dems hatred of oil companies all you want, but you cannot deny that they have been the movers and shakers behind USA's refusal to be more fuel efficient.

be aware of one HUGE difference. A COLA (Cost of Living Adjustment) is an artificial change to an artifical (in many cases) payment. It is intended to provide an automatic adjustment so that the payment at least keeps up with inflation (or sometimes does even better).

Science is immune from such man made things. The laws of physics cannot be adjusted periodically simply because it would be convenient. An internal combustion engine cannot be made more and more efficient just because we say so. Sure there have been relatively minor improvements in their efficiency (or efficiency improvements in MPG by using lighter materials) but the ROI just hasn't been there. . . not until people are willing to pay A LOT more for their cars (or drive much smaller ones to increase the "MPG" of the entire fleet).

-- Modified on 6/28/2008 7:25:25 PM

could you really not figure that out?

Better how? More revenue? Bigger profit? Higher book value? But OK, I'll play along; why is Costco doing better than WalMart?

except for the part about inflation, my comments concerning the efficiency of any particular model of car still apply. Many people believe that improved MPG PER CAR can just be legislated higher and higher.

You're such a WK defending the poor little girl against the big, mean, intentionally abbusive, politico.

We'll be expecting you to start explaining everyone's misuse pf words now.

-- Modified on 6/28/2008 7:40:59 PM

I know it was a figurative image, but for the record, you can't see any yellow (except gold during the brief tasselling period) until the corn is harvested and dehusked.

Better in the way that matters most, share price. Here is a 5yr chart of Costco vs. Wal-Mart: http://finance.yahoo.com/q/bc?s=COST&t=5y&l=on&z=m&q=l&c=WMT

Of course, this doesn't take dividends into account.

I don't know why Costco is doing better than (or at least keeping up with) Walmart. But according to your anti-union views, that should not happen. You should be explaining why Walmart hasn't pulled farther ahead.

Also, unless you are a business owner, you benefit from unions - even if you are not in one. When you negotiate your salary, you say "Hey, these people are making this much and I'm worth at least as much if not more than them (I presume you've never said you weren't worth as much), so pay me as much or more than them". Like most anti-union people I know, you may be arguing against your own best interests. I know a nursing supervisor who hates the nurse union, two speech language pathologists who hate the teachers unions, and an electrical engineer who hates his company's electrical technicians union. The right-wing/business owner/anti-union forces of the world have taught all of these friends to hate unions even though they directly benefit from better working conditions and salaries that the unions negotiate. There is no rational basis for the tremendous anti-union feelings in the US - most of you have been manipulated to hate them.

Maybe they're called CAFE standards. Who knows, you seemed to get my point.

I agree Americans did not want to buy smaller or more fuel efficient standards, and that was probably the biggest factor in not obtaining them. But we didn't need the GOP taking the oil companies' side to block higher MPG standards (whatever they're called), either, or to block research into alternative energies.

St. Croix's original post was simply an angry accusation with no understanding of what really is happening. I doubt if Dems, who are financially supported by the same large corps, are against companies making money. And the tech industry (he gave MS as an example) gives much more to the Dems than does the oil industry. So I'm sure he's wrong.

Of course, the technology industry also hasn't created an environmental quagmire. Who do you think should pay for the environmental damage? You and me? Tech companies? Oil companies? You can probabaly guess where my vote (though I'm not a Dem) would be.

its another to project rationale.

She did explain her words:
"like COLA standards (MPG requirements, in other words)"

She used the wrong acronym, but stated explicitly what she meant. MPG requirements OBVIOUSLY refer to CAFE standards, and have nothing to do with cost of living adjustments. Holy hell, read with your eyes open next time.

Maybe they didn't. Maybe the GOP simply took the side of free enterprise and that just happened to coincide with the interests of the oil industry.

I realize you probably don't buy into an arguement along those lines. It does get down to philosophical differences, not simply who bought who off.

Free enterprise may not be perfect. It's always easy to second guess it's record in accompishing the best thing, quickly enough, but it sure beats the hell out of the alternative.

I'll let you argue your points with St. Croix with him.

lol..

"For the record", I was born and raised on a farm.

The sea of yellow was in reference to excess corn that would'nt fit into the grain silos and spills onto the ground, literally.

buuuuuuttttt:

-- Modified on 6/28/2008 9:55:31 PM

from my thread on a Windfall Profit Tax? Have you not been listening to Hillary and Obama for the past year? They clearly singled out Exxon Mobile because they made $40B in profit in 2007. When you are communicating a populist message and mention to your constituents $40B profit, of course they are going to scream that Exxon Mobile and other oil companies are evil. In previous posts I mentioned that I would like 5 minutes w/Hillary and Obama and show them Exxon's Income and Balance Statements, as well as their 10K & 10Q statements. Exxon's revenue is $400B, and $40B is only a 10% operating margin, which compared to other sectors and companies pales in comparison. Hillary & Obama were threatening Exxon w/a windfall tax in order to divert some of their profit for alternative energy development. That is not the authority of govt, but the Board and Shareholders. Now I have no problem w/Rockefeller stating Hillary and Obama's position to Exxon's board, as he is a large shareholder. Fortunately, or unfortunately, the proxy failed.

Will a targeted windfall tax pass Congress? NO! But it sounds so good to your constituents.

By the way, most companies give to both parties. They are hedging their bets. Kinda like oil.

Exxon's already onerous tax bill. They currently pay ten of billions in taxes, but apparently that's not enough for some.

It does go to show you how stupid many people are, the very idea that American oil companies or politicians set world oil prices is such a ludicrous idea that anyone attempting to propagate such a riduculous arguement should be discredited and never taken seriously on any subject ever again.

I am accusing anyone on this thread of such stupidity, but to anyone to whom the shoe fits, WEAR it.

There you righties go again calling people names (stupid, in this case). Did you forget about the zillions in subsidies the oil companies also get?

You mean the right to write off losses in the year they were incurred???  I've been in the oil business for three decades and I've never got a dime from Uncle Sam.

If you want to talk about subsidies, I'd suggest we talk about the farmers, they're the ones who are truly subidized along with the ethanol producers. BTW, just how much is a "zillion"?

I never mentioned anybody by name, but anyone who thinks that the world' largest consumer and net importer of any commodity has the ability to set prices is STUPID, it is analgous to a junkie setting the prices for heroin.

that was my playground as a boy, sometimes corn, somtimes wheat.

if you wanna hear something incredible, lay down in a field of tall wheat and listen to the wind whistle thru the thin stalks, it's a sound similar to wind blowing thru pines but the smell is decidely differnt......

-- Modified on 6/29/2008 12:24:21 PM

outside commodities markets.

like that was in costa rica

So tonight I am going to take my wife out to dinner. I am betting that I will get a blow job. But to hedge my bet, I have 3 providers phone numbers on speed dial. I guess you could call that speculation outside the commodities market. Who am I kidding? I might as well book a provider and take a long position. Unlike the commodities market, it's a sure thing. Well most of the time.

Yep your original posting got hijacked as they often do.

speculation (possibly dishonest) that is intended to influence others, to either their detriment or to one's own gain.

News used to consist of what “was”. Now it’s morphed into what someone speculates what “might be”.

First gut reaction to speculation is to define it or discuss in financial terms, but two rather important areas of speculation is in the media and academia. I like to think that most adults are smart enough to sift through the speculation (bullshit)thrown at us by the elite media, but I have a real concern about speculation in "thought or conjecture" in most of our universities, because the audience is malleable.