Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: gogogodzilla
And if speculators are in the futures market as well, then the refiner has to bid higher than the speculator in order to buy a barrel of oil.

But the speculator sells the future before settlement day. If all the speculators were bidding up the price, but not taking delivery of the oil, refineries could wait until the speculators rushed to sell their contracts and buy them up cheap.

65 posted on 07/05/2008 9:12:14 AM PDT by Toddsterpatriot (Why are doom and gloomers, union members and liberals so bad at math?)
[ Post Reply | Private Reply | To 64 | View Replies ]


To: Toddsterpatriot

Refineries can’t play games like that. If they did, and it turned out badly, their customers (you and me) would have no gasoline to fill their gas tanks.

So it really doesn’t matter if the speculator sells at a later date, as those (such as refineries) have already secured their supply of oil... at whatever price was high enough to outbid the speculators.


66 posted on 07/05/2008 11:40:54 AM PDT by gogogodzilla (Live free or die!)
[ Post Reply | Private Reply | To 65 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson