Speculation almost exclusively affects the futures prices (which have been in backwardation for years now by the way). The spot price is determined by actual demand and supply if you discount a little fluctuation in storage due to speculation. I'm not an expert trader but thought this was fairly common knowledge - am I missing something?
================ Bear Plunger; Agree with a lot of that & havent looked on BP lately; but like thier logo a sun & British Petrol ad''beyond petroleum'' Agree with BP[Boone Pickens] should convert cars to natural gas; they sell gas by liter in Argentina,& bilingual guide filled up his Land Rover auto with natural gas also. Exxon king said $30 bucks in the price of oil; personaly have cut back on gas/oil as much as possible, always bought car with gas economy in mind. And just cooked out- over my favorite hickory coals/smoke; but many in USA love gas guzzlers.
Something I'm curious about. The big contract CL doesn't cash settle, but requires delivery somewhere in OK. My question is: Is there enough storage capacity at that OK facility to handle the deliverables? I know that many positions are closed before delivery time, but is the exchange aware of and compensate for the risk that there might be more deliverable oil than there is storage space?
Yeah but not a very long term solution. The price of corn goes immediately up causing more inflation. Corn at record high. Burning corn oil likely causes health problems similar to burning poisons. Also more farm land not being used for food is another loss causing another imbalance which also affect export of food. Deficit grows with less exports and less value of a dollar with inflation of a major food source. All basic things but not thought through by people promoting it. <a href="http://www.elitetrader.com/vb/showthread.php?s=&postid=1736918#post1736918" target="_blank"> What I said in another thread about alternative fuels</a>
The best thing would be to develop anti-mater generators in space and transport the energy to earth to massive grid stations. For now they should deregulate drilling for oil while at the same time develop some of the alternative I mentioned in another thread. These being hydrogen on demand from magnesium and zinc. Saltwater is also a fuel. There's mega alternatives. The key is to keep developing them and rely less on the archaic ones. Look how far behind the rest of the world the US is because of regulations. Being a net consumer this is ideal for exporters and the opec cartel.
I have an invention that I didn't mention that I would like to patent myself that would provide ample energy. If it would work it would be better than any alternative energy I mentioned with the exception of anti-matter. Anti-matter would be a major ordeal though. My idea is so simplistic it's no wonder nobody has figured it out. I've never given a name for it so for now I'll call it "The Alva Energy Generator".. Copyright Neal Vanderstelt Jan. 5th 2008. This generator will be a free energy device.
Very simple concept.. How much you pay me? I'll accept 10 million for my idea and 100 billion if it works. No guarantee it will work just the idea and some ruff ways of doing it. It would take research if it would work. In global/governmental terms as much that is spent on fuel the price is nothing compared to what it would do. Buffet? anyone? Anyone with the guts to put your money where your mouth is and practice what you preach? Come on rich man...