4 ms·

Really? We gave these banks TARP money and they're out spending it on hoarding oil so they can jack consumer prices later? Talk about sleazy.

by gills 18y ago

gravitycop 18y ago
they're out spending it on hoarding oil so they can jack consumer prices later They are providing new value to the economy by smoothing price fluctuations. When the market prices rise, and they sell their stocks of oil, the resulting market prices will be lower than they would otherwise be.
gaius 18y ago
Well, if you're a commodities trader, ideally you want to buy something then sell it quicker than it takes to ship it. Then it can physically be transported directly from the seller to the buyer. "Taking delivery", as it's called, is a nightmare for the typical commodities trader, who generally has absolutely no idea what to do with it, and doesn't want to pay for warehousing out of his potential profit. One tankerload of oil isn't going to be enough to move the market. I suspect what happened was they vastly overpaid for it and can't for whatever reason bear to just write it off.
- gravitycop 18y ago
  One tankerload of oil isn't going to be enough to move the market. From the article: Frontline Ltd., the world’s biggest owner of supertankers, said Jan. 14 about 80 million barrels of crude oil are being stored in tankers, the most in 20 years. A purchaser could buy oil now, keep it for months at sea and fetch better prices by selling futures that are higher than the spot price. The world uses about 86 million barrels of oil per day.
  - deleted 18y ago
    [deleted]
- gills 18y ago
  I do find it curious that MS would actually take delivery, and I also suspect they are trying to minimize the damage of buying at $130/barrel. Sorry about my comment being a little sarcastic...I am constantly amazed at the amount of money that has been swallowed by the derivatives black hole, and I like to poke fun at what I perceive as the flotsam in it's wake.

Really? We gave these banks TARP money and they're out spending it on hoarding oil so they can jack consumer prices later? Talk about sleazy.

by gills 18y ago

Really? We gave these banks TARP money and they're out spending it on hoarding oil so they can jack consumer prices later? Talk about sleazy.

gravitycop 18y ago

they're out spending it on hoarding oil so they can jack consumer prices later They are providing new value to the economy by smoothing price fluctuations. When the market prices rise, and they sell their stocks of oil, the resulting market prices will be lower than they would otherwise be.

gaius 18y ago

Well, if you're a commodities trader, ideally you want to buy something then sell it quicker than it takes to ship it. Then it can physically be transported directly from the seller to the buyer. "Taking delivery", as it's called, is a nightmare for the typical commodities trader, who generally has absolutely no idea what to do with it, and doesn't want to pay for warehousing out of his potential profit. One tankerload of oil isn't going to be enough to move the market. I suspect what happened was they vastly overpaid for it and can't for whatever reason bear to just write it off.

gravitycop 18y ago
One tankerload of oil isn't going to be enough to move the market. From the article: Frontline Ltd., the world’s biggest owner of supertankers, said Jan. 14 about 80 million barrels of crude oil are being stored in tankers, the most in 20 years. A purchaser could buy oil now, keep it for months at sea and fetch better prices by selling futures that are higher than the spot price. The world uses about 86 million barrels of oil per day.
- deleted 18y ago
  [deleted]
gills 18y ago
I do find it curious that MS would actually take delivery, and I also suspect they are trying to minimize the damage of buying at $130/barrel. Sorry about my comment being a little sarcastic...I am constantly amazed at the amount of money that has been swallowed by the derivatives black hole, and I like to poke fun at what I perceive as the flotsam in it's wake.