Why does the price of Oil seem to be falling even though Hurricane Ike is headed right for Texas?
Answers
435 points
larryat36 answered one year ago …
As I write this USO is up about 1.25% today it will probably go on to about 2% and be on a wait and see til the storm hits and damage (if any) is assessed.
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Grudun answered one year ago …
The primary reason oil hasn't jumped much with the threat of the hurricane is the US dollar has been gaining strength which has been one of the key factors in decreasing the price of oil(along with reduced demand etc.)
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731 points
thinker70 answered one year ago …
What the oil companies and speculators have accomplished in the past month is to hold the retail prices for gas, diesel and heating fuel at a much higher ratio to crude while dropping crude temporarily, giving a FALSE impression that crude prices are cming back down under $100. per barrel premanently! Their problem essentially was that refiners mergins were squeezed terribly because crude rose TOO FAST and refiners could not make a profit, (or at least very little) and so crude was manipulated down. We here in Canada are still paying very close per litre to what we were paying when crude was over $140. per barrel.
I was on a radio talk show recently quizzing a politician who follows the price and asked him point blank HOW the government can say with a straight face that they have INVESTIGATED accusations of collusion by the oil companies to FIX prices and can find NO EVIDENCE of manipulation or collusion!How can that be when thousands of stations of ALL the major oil companies magically at midnight raise their price to the EXACT SAME pump price to the 1/10th of a cent based on that days price of crude. The price goes UP at a predetermined and obviously AGREED to rate while when crude DROPS the price cut is much less and slower in coming down.
By TEMPORARILY lowering crude while keeping retial prices high the refiners now stand to get back to profitability (hence the recent slew of insider buying by major refinery executives) and just watch retail prices continuing to rise at the same ratio as before as crude is inevitably forced HIGHER by total world demand in the face of DECLINING production! ALL major fields have declining production and any NEW finds of any magnitude are YEARS away from adding to production.!
I DISAGREE with larryat36 the market acts in ANTICIPATION of events, normally a threatening storm would send the price higher, this is an entirely DIFFERENT event, you are witnessing MANIPULATION of the market by the big boys whose agenda supercedes the immediate event! We recently had a 13c a LITRE jump in pump prices while crude was FALLING, so i am not buying the establishment line that reduced demand is lowering prices of crude. Myron Martin
