Oil Price Watch

[oliver1013]

An unlikely ally appears

[anonemus]

he's an ALLEGORY

the perfect allegory of a predatory investor

all you know is Gates and Buffett

before reading that link posted by hondaboot, you didnt know about the commodities market, futures contracts, speculators, ICE, CFTC

there's a world you're not aware of that affects oil prices

all you know is OPEC and oil companies

I came here to to learn, and I am. Ngayon alam ko na ang mga sakim eh di lang yung mga oil companies pero pati na rin yung mga iba pang investors.

At nalaman ko rin na ikaw ay naninalawa sa kasakiman at walang pakialam sa iba kundi sarili mo lang.

SHOW ME ONE COUNTRY WITHOUT ANY FORM OF MARKET REGULATION AND IS A BETTER SYSTEM.

[safeorigin]

ever heard of thomas jefferson?

[uls]

Originally Posted by safeorigin
agree 100%

there's a misconception kasi that the government should be the one fixing the market where in fact the market fixes itself up

it's called letting-the-system-fail

they "did" it in iceland and they're doing much better now compared to ireland, greece, etc.

but of course, it would inevitably fail in the end

govt interference just prolongs the agony and brings forth much more financial destruction

like what uls posted

the consumer and service provider fair/merchant price will arrive in an equilibrium and that doesn't have to involve govt price control

price control kills the business and as a result, facilities and vehicles are less maintained because they have less resource at their disposal

also, govt intervention creates even more market imbalances

this guy gets it

it's not coz he's taking my side

he really gets it

[safeorigin]

that's coz I spend my time here:

http://mises.org/

[uls]

know why the govt regulates transport fares?

can you handle the truth?

the govt regulates transport fares coz it has to keep fares low enough for the low income masses who use public transport

if the govt allowed fares to rise as fast as fuel prices, the masses will take to the streets and demand higher wages

if wages rise (following price increases in goods and services), you'll have a vicious cycle of runaway inflation

higher wages --> employers will raise prices of goods and services --> workers will demand even higher wages --> employers will raise prices even more --> so on so forth

so it has to be stopped somewhere -- wages. prevent wage increases

to prevent wage increases, the govt keeps transport fares steady or slows the rise. the govt also tries to keep prices of basic goods steady or slow the rise

pansin niyo mabagal kumilos ang gobyerno sa fare increase?

tapos ang gobyerno meron SRP (suggested reference price) para sa basic goods. the DTI goes around checking prices sa mga palengke

the govt is trying to prevent the masses from demanding higher wages

the govt is trying to hold down inflation --- by suppressing wages

[uls]

that's coz I spend my time here:

http://mises.org/

that's good

[safeorigin]

know why the govt regulates transport fares?

can you handle the truth?

the govt regulates transport fares coz it has to keep fares low enough for the low income masses who use public transport

if the govt allowed fares to rise as fast as fuel prices, the masses will take to the streets and demand higher wages

if wages rise (following price increases in goods and services), you'll have a vicious cycle of runaway inflation

higher wages --> employers will raise prices of goods and services --> workers will demand even higher wages --> employers will raise prices even more --> so on so forth

so it has to be stopped somewhere -- wages. prevent wage increases

to prevent wage increases, the govt keeps transport fares steady or slows the rise. the govt also tries to keep prices of basic goods steady or slow the rise

pansin niyo mabagal kumilos ang gobyerno sa fare increase?

tapos ang gobyerno meron SRP (suggested reference price) para sa basic goods. the DTI goes around checking prices sa mga palengke

the govt is trying to prevent the masses from demanding higher wages

the govt is trying to hold down inflation --- by suppressing wages

yep

this may sound counter intuitive

but if you let the system fail

you reset the economy and eventually get rid of the diseases that's plaguing the country

[ame]www.youtube.com/watch?v=djN7qItu5oM[/ame]

regarding regulation

[ame]www.youtube.com/watch?v=xwJyX0qIFOQ[/ame]

[Monseratto]

back to subject...again. GOing against the populist sentiment.

http://www8.gmanews.tv/100days/story...n-oil-products

Aquino not keen on suspending E-VAT on oil products
2011-03-11 14:13:32

The President added that suspending the EVAT on fuel would only give a false sense of security that the government is doing something as “artificially maintaining lower fuel prices would only discourage people from changing their habits of using fuel and save less."

Aquino said the primary focus of the government now is the certainty of supply for at least two months.

[SiRbossR]

Oh My! Eco101 on tsikot!

[anonemus]

* uls --



SHOW ME THE COUNTRY!

[uls]

back to subject...again. GOing against the populist sentiment.

http://www8.gmanews.tv/100days/story...n-oil-products

like i said in another thread (or is it this one?)

the govt can't cut taxes. the govt needs all the revenue it can get. laki utang eh

Govt debt up to P4.718T as of end-December
http://www.gmanews.tv/story/215062/b...f-end-december

The national government’s outstanding debt stood at P4.718 trillion as of December last year, up from the P4.396 trillion recorded in the same period in 2009, the Bureau of the Treasury (BTr) said Friday.

The government owed P2 trillion from foreign creditors and P2.718 trillion from local lenders, BTr records showed.

Theoretically, at P4.718 trillion, each of the 94 million Filipinos carry a debt burden of P50,213.

Domestic loans as of December last year were 10 percent higher than the P2.47 trillion recorded in 2009. Foreign debt also increased by 3.8 percent to P2 trillion from end-2009’s level.

The government’s debt stock in December was lower by P1 billion from November’s debt level of 4.719 due to the decline in foreign debt.

“The decrease in the national government’s foreign debt… was brought about by the P5 billion net repayment and P16 billion appreciation of the peso against the US dollar," the BTr said.

On the other hand, the domestic debt rose P1 billion due to the issuance of government securities by the national government, the bureau added.

This year, the government is hoping that it can contain the fiscal deficit to P300 billion or 3.2 percent of gross domestic product (GDP).

The Philippines incurred a budget deficit of P314.4 billion or 3.7 percent of GDP last year, lower than the ceiling of P325 billion or 3.9 percent of GDP.

By 2013, the Aquino administration is aiming to trim the fiscal deficit to 2 percent of GDP.

[uls]

* uls --



SHOW ME THE COUNTRY!

pre-overregulated USA!!

[anonemus]

pre-overregulated USA!!

And what period in their history was that? And how was it better?

[safeorigin]

^18th century America

how better? oh much better

as a testament to that, read the declaration of independence

http://archives.gov/exhibits/charter...ranscript.html

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

underlined is the politically correct term for "greed"(positive context)

[anonemus]

^ that's a bit ironical. to use a country's constitution to bolster your argument for free market capitalism. A constitution is the foundation for government intervention and regulation.

assuming that 18th century USA was free from government regulation (of which it wasn't) how was it better? facts, please.

(OT na naman)

[safeorigin]

sigh... never thought I would have to use this video again...

[ame="http://www.youtube.com/watch?v=bFxvy9XyUtg"]YouTube - How an Economy Grows and Why It Doesn't (by Irwin Schiff)[/ame]

refer to 33:49 to get my answer

please do not confuse public security and protection of rights with market regulation

[uls]

i'm sure there are people here who want the govt to regulate fuel prices

so let's imagine this scenario:

govt fuel price ceiling takes effect on Monday, March 14

gasoline can't go above P55, diesel can't go above P45

monday arrives. oil companies monitor import prices of crude oil, refined products. Prices are rising. Since they arent allowed to raise prices (to pass higher cost to consumers to maintain profit margin), they don't place orders

they will wait for import prices to fall to a level where it is profitable to sell at the prices set by the govt

a whole week passes but import prices didnt fall to the level where they set their buying price

they havent placed orders in a week but current stocks are still adequate

2nd week -- hopefully this week import prices would fall. but they don't. oil companies don't place orders

they havent placed orders in 2 weeks and current stocks are running low

3rd week -- oil companies begin rationing. retailers only get half the fuel they order. so retailers also limit the amount of fuel they sell per vehicle

import prices fall. oil companies place orders

current stocks are very low

4th week -- some gas stations are closed due to no stock. other gas stations have shortened operating hours. motorists drive all over to look for gas stations still are still open

oil companies waiting for deliveries. stocks are depleted

import prices rise again. no orders are placed

5th week -- most gas stations are closed. number of vehicles on the road drop significantly. goods aren't delivered. groceries can't restock their shelves. police cars, ambulances, fire trucks can't mobilize

economy grinds to a halt

so there. is that what you people want?

[SiRbossR]

^OH no. I can't imagine the roads without cars, groceries without stocks and i dont know....what else.

[anonemus]

Sharing this interesting paper written in 2008, during the last oil price hike:

http://ezinearticles.com/?Philippine...sis&id=1915890

.1 Problem Definition/Structuring

It has been recognized that the problem with oil is far from over as deregulation policy fails to meet its goal to foster a truly competitive market and reasonable oil prices. The current president herself, Gloria Macapagal Arroyo, acknowledges the fact that the oil crisis is threatening to erode the very fiber of the Philippine society.

Unlike in 1998, the crisis today seems to be more irreparable as the United States is facing what many economists describe as the worst economic crisis in its history, triggering unstoppable skyrocketing of oil prices and prices of foodstuffs around the world. As already stated, the oil crisis is a global one and has to be addressed not only at the national level, but at the international level as well.

But why is the oil crisis a global crisis? Is it really beyond the government control?

The Philippines, like many other nations, buys the oil at the spot market. By "spot" is meant, that one buys the oil at a market only 24 to 48 hours before one takes physical (spot) delivery, as opposed to buying it 12 or more months in advance. In effect, the spot market inserted a financial middleman into the oil patch income stream.

Today, the oil price is largely set in the two futures markets: London-based International Petroleum Exchange (IPE) and the New York Mercantile Exchange (NYMEX). Here, traders or investors buy or sell certain commodities like oil at a certain date in the future, at a specified price. Basically, traders invest in the futures market by buying futures contracts called "paper oil" or simply paper claim against oil. The very purpose of buying oil is not to wait for the actual delivery of the physical oil in the future, but to sell the paper oil to another trader at a higher price. That's how investors engage in widespread speculation; and it is becoming a viscous cycle. Almost all countries, including the Philippines, buy the oil at the spot market where the price is already at its peak.

In a year 2000 study, Executive Intelligence Review (EIR) showed that for every 570 "paper barrels of oil"-that is futures contracts covering 570 barrels-traded each year, there was only one underlying physical barrel of oil. The 570 paper oil contracts pull the price of the underlying barrel of oil, manipulating the oil price. If the speculators bet long-that the price will rise-the mountain of bets pulls up the underlying price (Valdes 2005).

This only disproves the popular assumption that oil price hike has something to do with the "law of supply and demand." In fact, as much as 60% of today's crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price (Engdahl 2008).

In its recent statement, IBON Foundation cited a study conducted by the U.S. Senate Permanent Subcommittee on Investigations, which revealed that 30 percent or more of the prevailing crude oil cost is driven only by speculation. IBON further cited that speculation adds about $35 to a barrel of crude oil (Martinez 2008).