> The problem is as I see it (CNN and CNBC) is that it will be far longer > > than
> > a few days as you seem to think. Many oil platforms have been shut down > > and
> > will require some repairs to return to full output and even after they do,
> > there seems to be extensive damage to the transportation network which > > could
> > take months to repair.
>
> Except that.... LA. isn't the only terminus. Hurricane reports on Katrina
> have been coming in for almost two weeks, enough time to prepare and have a
> reserve.
LOL, a reserve for how long Max. These refineries could be down for months and who knows how long it will take to fully repair the infrastructure. And BTW, they had DAYS, not weeks to prepare.
Typically dozens of tankers sit waiting for a place to offload.
Sure, and where are they going to offload too?
Storage tanks on land are for what, if not to STORE product in the event of
> needing to buffer a supply.
Yea, a buffer for a few days or even weeks, not months.
Granted, oil companies tend to jack prices when
> they feel like it, BUT.... anyone looking at the futures market knows that
> they are raising prices in a reaction to the market price of oil.
Not only do you have to look at the futures market Max, you actually have to understand it and from what you are saying, you don't.
> Fact is, its demand on the futures market pushing the price. Why? because
> people are buying oil that doesn't exist yet as a commodity. And
> realistically, if I said to you, "Hey, I'll pay you more than market price
> for that widget you are making, and I'll buy five of them even though you
> haven't got them yet." What are ya gonna sell it for, market price, or my
> offer? And if you sell me a bunch of those widgets, what price am I gonna
> sell them for? More than what I paid, or market price? And if I buy five
> widgets at a time, you are probably gonna make as many as you can to keep up
> with my demand, so long as I'm buying.
If it were only this simple. First of all, the only way that people could drive uip the price this way is if the supplies are limited which according to you, they are not. Then there is a SIGNIFICANT risk of loss driving up the price in a market that has a ready supply because someone else can sell below what you even paid for it is supplies are plentyful. This is only the beginning and I really don't have the time to list out point by point why this is wrong and you really need to do a little reading. The only thing that I will say that the only way for the futures of something to be driven up like this is because the near future availability of of the item is believed to be in SHORT supply.
> Plenty of widgets, but the price is determined by the investor, not the
> market. And the spiral goes on.....
The price is always determined by the market Max. If people will not pay the price that you want, then you lose money.