If the law of supply and demand rules oil prices, then why are prices rising? I saw a story this morning about a city here in Oklahoma that is a giant cross road for oil pipelines here in the US. This town is the location of a bunch of oil holding tanks and evidently they are stuffed to the gills with oil. As a matter of fact they are having to build more and more tanks to hold all this oil that is not being released to the market. One major company that stores the oil had a representative on who said that even the additional tanks they are building will not meet the demand.
I thought the demand for what? This company does not drill. This company does not produce oil. This company stores oil. The demand is for oil storage capacity. Oil companies want to store more oil!
Originally posted by Eladar If the law of supply and demand rules oil prices, then why are prices rising? I saw a story this morning about a city here in Oklahoma that is a giant cross road for oil pipelines here in the US. This town is the location of a bunch of oil holding tanks and evidently they are stuffed to the gills with oil. As a matter of fact they are having to build more and ...[text shortened]... storage capacity. Oil companies want to store more oil!
There's something wrong in Denmark.
That's capitalism my friend. Someone is withholding all that oil from the market on purpose in order to make a profit. They work together to act as a cartel which totally destroys the market's resemblance to any kind of free market.
Originally posted by AThousandYoung That's capitalism my friend. Someone is withholding all that oil from the market on purpose in order to make a profit. They work together to act as a cartel which totally destroys the market's resemblance to any kind of free market.
You wouldn't know capitalism if it poked you in the eye with a bonkers candy bar.
People go out to the car port and look at their car, they figure how hard it might be to push that car 10 Kilometers, then they look at the price of gas and decide to buy the litre of fuel instead. It's an old maxim, "Charge em what they'll pay". That is the free market. If you want to look at the tax and levy component of the cost of fuel then you'd be talking 'not free market'.
Originally posted by Wajoma You wouldn't know capitalism if it poked you in the eye with a bonkers candy bar.
People go out to the car port and look at their car, they figure how hard it might be to push that car 10 Kilometers, then they look at the price of gas and decide to buy the litre of fuel instead. It's an old maxim, "Charge em what they'll pay". That is the free market. ...[text shortened]... the tax and levy component of the cost of fuel then you'd be talking 'not free market'.
I agree.
The only way to get that oil cheaper is if all of us tell the oil companies to F off and stay home until the prices drop.
Believe me. 3 days of nobody going to work will bring those prices down (and probably a few governments at the same time).
Originally posted by KazetNagorra So what's the inventory of oil companies in the US?
At the moment, the Cushing's tanks are filled and its capacity is 46.3 million barrels according to one site. The expansion is supposed to be something like an additional 6.1 million barrels.
Originally posted by Eladar At the moment, the Cushing's tanks are filled and its capacity is 46.3 million barrels according to one site. The expansion is supposed to be something like an additional 6.1 million barrels.
The US uses 19 million barrels of oil per day. Storing 6 million more barrels isn't going to have much impact on oil prices.
Originally posted by KazetNagorra The US uses 19 million barrels of oil per day. Storing 6 million more barrels isn't going to have much impact on oil prices.
You have to build the extra storage. That's my point. The laws of supply and demand tell us that prices sky rocket when supplies are short and demand is high, but supplies are very high in the US, so much so that we do not have enough storage capacity.
I'd say the problem comes from monopolies. It seems to me that we do not have enough competition and there is a fix in the works.
Originally posted by Eladar You have to build the extra storage. That's my point. The laws of supply and demand tell us that prices sky rocket when supplies are short and demand is high, but supplies are very high in the US, so much so that we do not have enough storage capacity.
I'd say the problem comes from monopolies. It seems to me that we do not have enough competition and there is a fix in the works.
There are big companies but none has a monopoly on energy supply, if you think they're creaming it put a package together with proof of their excessive prices and some proof of how it's possible to do it cheaper and you're going to have investors knocking down your door throwing money at you. Good luck.
Originally posted by Wajoma There are big companies but none has a monopoly on energy supply, if you think they're creaming it put a package together with proof of their excessive prices and some proof of how it's possible to do it cheaper and you're going to have investors knocking down your door throwing money at you. Good luck.
Yes, we all know banks are keen to throw around billions of dollars in starting capital.
Originally posted by KazetNagorra Yes, we all know banks are keen to throw around billions of dollars in starting capital.
I think you're being sarcarrrrrstick :'(
If you can put together a decent proposal there are other places you can go, but you need a few things: You need to know backwards and forwards what you're talking about and that takes effort, more effort than the armchair whingers are prepared to put in, you also need drive and you might need some more imagination than "banks are where the money is kept".
Originally posted by Wajoma I think you're being sarcarrrrrstick :'(
If you can put together a decent proposal there are other places you can go, but you need a few things: You need to know backwards and forwards what you're talking about and that takes effort, more effort than the armchair whingers are prepared to put in, you also need drive and you might need some more imagination than "banks are where the money is kept".
Boy, aren't you naive. Do you really think it's possible to start an oil company from scratch with mere good ideas and drive?
Originally posted by Wajoma Haha, and what do you think it takes?
Bad ideas? haha
It takes knowing the right people and some significant starting capital. It takes luck and it takes already having some kind of smaller business in the energy sector so investors know you're for real. Given all that it's still not easy since there's a lot of politics involved.
Why are oil supplies growing?
27 May '11 18:43
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