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MARINERMAGNUM

Was it a scam?

49 posts in this topic

Regular Gasoline Average Prices

USA

Today 2.455

Yesterday 2.464

One Week ago 2.514

One Month ago 2.670

One Year ago 4.067

I remember telling most eveyone I knew that if gas stair stepped down to $2/gal leading up to the election,we were scammed.

I think it was $2.08 on election day here.

It seemed like they wound the spring as tight as they could right toward the end,then let it unwind at the end.

I'll never forget the dingalings at the pumps saying "you'll never see $2 gas ever again" lol!

Save the markets jargon,speculation jockeys,and other theories-when the oil co's were reporting record profits every quarter-by the billions,that logic was just an insult to people.

Our DNR analyst-who usually has a good answer for the sways in gas prices was always flustered when asked why the prices were so high. He'd say "Um,uh,I'm not quite sure" lol

I guess it's a free market out there-they can charge whatever they want,but I wonder why they aren't crankin her up to $4 since last November? grin

Maybe a retroactive investigation is in order?

I just was curious to see if anyone else thinks we got shafted.

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It was a scam.

Look to our last presidential team for responsibility. If they aren't directly responsible, they should know who is.

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of course it was a scam!!!! The better question is what can anybody do about it???? Nothing... Now to me thats the scary thing! eek

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I'm not sure about the rest of you guys but when I don't understand something, I want to learn more. When oil and gasoline prices started skyrocketing, I wanted to learn why. I may not know the exact specifics of how oil/gas prices work but I have learned more about how Wall Street, Stocks, and Futures Markets work now. Not sure what good that has done for me yet but I am holding some long positions in some pretty beat down, speculative companies as a result. Someday... someday...

The one thing that has to be understood about hedge funds and investment banks (ex... Goldman Sachs) is they have to make money, above and beyond what your 401k managers are doing for you. When a sector of the market is rallying, these guys pump money into these areas, A LOT of money because they have to make money. They have to perform.

In the last few years, there haven't been many major sector rallies but oil, refiners, and gas companies were one of them back when we had $4 gas. To put it simply, you couldn't lose if you invested in that sector at that time, eh? Since oil is sold on the futures market, its all speculation. So if you have $150 contracts when oil goes up to $170... good job! Where this goes bad is when your company bet oil wouldn't go down and is holding $150/barrel contracts when oil is trading at $100/barrel. Ouch.

So there were a lot of people making money on the way up, short sellers were also making a lot of money on the way down, but there were also a lot of people who lost money on the way down.

This downside (IMO) is what is keeping oil from going on a rampage again. It'll have its time in the future but I think the big market money is looking at other areas (Tech perhaps, Apple announces earnings tomorrow) where they can jump into right now. Oil won't be down forever, its just got to get some momentum behind it again and look out, we'll be at $4 gas again.

(FYI... not an expert in this field but I hope I got the basics right)

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I'm not sure about the rest of you guys but when I don't understand something, I want to learn more. When oil and gasoline prices started skyrocketing, I wanted to learn why. I may not know the exact specifics of how oil/gas prices work but I have learned more about how Wall Street, Stocks, and Futures Markets work now. Not sure what good that has done for me yet but I am holding some long positions in some pretty beat down, speculative companies as a result. Someday... someday...

The one thing that has to be understood about hedge funds and investment banks (ex... Goldman Sachs) is they have to make money, above and beyond what your 401k managers are doing for you. When a sector of the market is rallying, these guys pump money into these areas, A LOT of money because they have to make money. They have to perform.

In the last few years, there haven't been many major sector rallies but oil, refiners, and gas companies were one of them back when we had $4 gas. To put it simply, you couldn't lose if you invested in that sector at that time, eh? Since oil is sold on the futures market, its all speculation. So if you have $150 contracts when oil goes up to $170... good job! Where this goes bad is when your company bet oil wouldn't go down and is holding $150/barrel contracts when oil is trading at $100/barrel. Ouch.

So there were a lot of people making money on the way up, short sellers were also making a lot of money on the way down, but there were also a lot of people who lost money on the way down.

This downside (IMO) is what is keeping oil from going on a rampage again. It'll have its time in the future but I think the big market money is looking at other areas (Tech perhaps, Apple announces earnings tomorrow) where they can jump into right now. Oil won't be down forever, its just got to get some momentum behind it again and look out, we'll be at $4 gas again.

(FYI... not an expert in this field but I hope I got the basics right)

Good post, Chris.

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Quote:
So there were a lot of people making money on the way up, short sellers were also making a lot of money on the way down, but there were also a lot of people who lost money on the way down.

I know the smaller independent gas retailers make more money when the price of gas is dropping, because each tanker load they buy is less money than the last one. Oil is a commodity, and the price moves in any commodity tend to be exaggerated due to speculation - especially in more recent years. Too many dollars chasing after limited investments and resources, is my theory. Probably going to get worse in the future...

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I agree that Chris is pretty right on on this. Also, OSHA (?) controls most of the worlds oil. Also, the futures folks decide if it's going up or down. This is one thing that we don't have much control over and it will get out of hand again. I remember Biden saying, not to long ago, that "We need to see $5/gallon gas to get up to where the Euro's pay so we get rid of the SUV's and go to more "smart" cars". You also have to look at our own Democrat state run congress that passed yet another gas tax while gas was over $4 a gallon. Real Genious' there.

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Good post, Chris.

Yes, it was a good post.........BUT! conspiracy theories are so much more fun. laugh

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I think the easy credit, low interest, monetary policy is a big factor, because the commodity deals are leveraged.

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While I am appreciating the reasonable gas prices again, I can't help but cringe at the talking heads on MPR lamenting that these "low gas prices" are not helping to encourage people to dump their evil SUV's for "smart cars".

Expect more gas tax preposals to "encourage good behavior".

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I hate to say it, but my feeling is that $4 gas will look cheap in the not too distant future.

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I hate to say it, but my feeling is that $4 gas will look cheap in the not too distant future.

Yeah.....right before, ohhh, election time again?? whistle

And here I thought that big, bad oilman from Texas was to blame? At least that's who everyone was screaming at last fall before they voted for "change".

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Metal prices are on the rise again, so I'm thinking we can look to everything else to go along, when the world economy "rebounds". All the money being dumped into the world economy by all the various governments has to go somewhere, and it will more than likely translate into higher prices.

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Good post Chris. I saw on 60 minutes (or some show like it) that oil companies were only buying something like 10% of the oil futures when it was on its way up to $150. The remaining 90% was purchased by hedge funds and other large investors going after the next hot commodity. Then the bubble burst and all those holding the futures had to deliver on their $150 and were loosing $$, thereby causing a panic and the price dropped like a rock to "reasonable" levels that are supported by supply and demand not by crazed speculation. There needs to be new laws put in place to stop this from happening again. Violent swings in oil prices aren't good for anyone. (except hedge funds)

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It all started out so well, a great post by hanson, and then it happend, turned political.

Shane, I think you ment OPEC, not OSHA.

I don't believe any political party was to blame. (see Hanson's post) People found a way to make money and pushed the market for oil/gas to the top. They (investors, speculators, etc) knew it would fall eventually, they had too. It is their job. The really good ones sold off last summer, and the bad ones bought it up like crazy last summer. It all goes back to the one key work, GREED.

Nobody can get rich fast enough. It will be the downfall of our nation, not taxes, guns, religion, gays, global warming, entitlement programs, etc, etc. It will be a combination of everything relating back to greed. Many think they more, more, more. It is really to bad, and it is snowballing out of control.

So yes scam.

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Your right, OPEC.

During all the high gas price, keep in mind that Gas companies were seeing record profits. I don't think it's all political outside of taxes on it.

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Quote:
During all the high gas price, keep in mind that Gas companies were seeing record profits.

And that's when the push was on to tax the oil companies.. Problem is, higher taxes on corporations are simply passed on to the consumer, raising prices higher yet...

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China was willing to pay more for crude oil than the rest of the world due to a booming economy, resulting in higher costs for the rest of us. If anybody wants higher fuel prices it is the democrats in office. Higher costs will decrease demand and further assist in their propaganda telling us what we should be driving and how much we can and should be consuming.

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We got shafted and will again, that's a guarantee. Big oil companies were making record profits but also spending record amounts of $$ on alternative fuel methods too. You never hear about the good things they do only the record profits. While I am in no way touting big oil, they are companies that are out to make money, not lose it. It all comes down to what some a hole "Thinks" it should/will be. Futures are a dangerous game and someone always loses, usually us.

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I remember lots of people blaming the big, evil, greedy oil companies for the high gas prices. I presume that those people are also attributing the lowering of gas prices to the good will and benevolence of those same companies...

When gas prices spiked, it was a result of higher per-barrel prices of oil. At the time, a major contributing factor to that was the weak dollar. It took more weak dollars to get a barrel of oil. Now, the dollar has rebounded somewhat, driving the cost per barrel back down...and thus, the cost of gas.

But now that we have flooded the economy with more cheap money, and borrowed more and printed more, expect the value of the dollar to fall again...thus raising the price of oil, and the price of gas. In the not-too-distant future.

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