Lowest rated blog ever....

1 in Europe, they have been paying the equivalent to $6 per gallon for years.

2 economists are still predicting gas prices could break the $10 mark.

3 yes the oil companies are reporting record profits, but it has a lot to do with mergers and selling off less profitable subsidiaries...and a big reason to be mentioned later (most likely in bold capital letters)

4 Oil prices and gas prices really don’t have that much to do with each other. Just because one goes up and the other goes down does not mean that it’s a conspiracy.

 

Now, I will expand on #4 a bit. I’m sure most of you are familiar with the concept of “Investing in Futures” for this, a person would contact Merrill Lynch (well not anymore you wouldn’t) or a company like it. and request a buy-in of oil futures where you would spend slightly more that the current rate of oil to lock in a price for oil that was currently still in the ground. You can hold on to that for as long as you want(provided an expiration wasn’t written into the agreement) now you wait until oil prices rise above the amount you spent for it, then you sell. If prices are down, nobody is selling, people are buying more, so the actual amount of oil on the market drops, gas supply drops, PRICES GO UP.

Now, because the supply of oil is low, prices rise, people sell their futures, supply goes up, the quantity of gas produced rises, the price of gas drops. Because everyone is selling their futures, there is now too much oil on the market, the value drops, people stop selling, the price of gas goes back up.

This is a constant cycle, 2 wavy lines across a graph trying to catch each other and cancel each other out. As time passes, those waves even out, futures become almost irrelevant since the price of oil tomorrow will be the same as it is today, so people start to invest in corn, beats, coal…something else. Then something like a hurricane happens (or maybe the news comes on and they start screaming recession). This is like dropping a stone in a pool of water, the waves start off large, if the topic that’s under attack is the gas companies or refineries the wave starts by punching up the price of gas, everyone tries to sell what they are holding to meet an increase in demand and oil prices drop. Or if the attack is against an oil field, the price of oil skyrockets, everyone sells, and gas prices drop shortly after.

NOW….why are the Oil companies making record profits? Because 1 they hold the most oil futures out of anyone…and 2, IT”S THEIR JOB AS PUBLICLY HELD COMPANIES TO MAKE AS MUCH MONEY AS THEY CAN FOR THE PEOPLE WHO INVEST IN THEM!!!!

 

There that’s my rant, if you don’t like it, call the government and demand they switch to communism, or move to Cuba, because this is the way it is under our current style of government, no candidate is going to fix it, all they can do is hope to keep the number of stones thrown into the pond to a minimum.

 

And now that I just got my finger smashed by an electric stapler(no really, I didnt' know these things had a battery backup.)….I’m done blogging for the day.