ROCKMAN wrote:It was certainly a good thought experiment but I assume most now understand it's extremely difficult to model such a complex dynamic. Just consider the $millions KSA er all spends on analysts to model the price/supply/demand dynamic to develop a model. But even at that not all exporters develop the same model because they all don't have the same factors affecting them.
ROCKMAN wrote:It was certainly a good thought experiment but I assume most now understand it's extremely difficult to model such a complex dynamic. Just consider the $millions KSA er all spends on analysts to model the price/supply/demand dynamic to develop a model. But even at that not all exporters develop the same model because they all don't have the same factors affecting them.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
tita wrote:That makes me think that the displayed price we are used to when we buy stuff is just a convention to make things easier. When you travel outside our modern world (Africa is funny), you often have to bargain. And it's the buyer who has to make the first offer, he doesn't ask the price. Then it's a question of offer/demand, pressure on the buyer or the seller to set the final price...
I don't really know how trade is made with oil. I assumed sellers have an amount of oil to sell, and find the best offer they can find. And if that amount is not enough, then the price goes up, so those who can't afford it get out. And if there is too much oil, then the low offers find a seller.
If one seller decide to take no offer under a price, then the offers will goes up. But then he won't find enough buyers for all his oil. The others sellers will just sell under the set price. It's the same outcome than with quotas.
Edit: I wrote bullshit. Like rock said, too much dynamics involved.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
tita wrote:That makes me think that the displayed price we are used to when we buy stuff is just a convention to make things easier. When you travel outside our modern world (Africa is funny), you often have to bargain. And it's the buyer who has to make the first offer, he doesn't ask the price. Then it's a question of offer/demand, pressure on the buyer or the seller to set the final price...
tita wrote:That makes me think that the displayed price we are used to when we buy stuff is just a convention to make things easier.
ROCKMAN wrote:Well, da! The obvious just occurred to me: what f*cking price are we talking about: the price the producers charges or the price the refiner pays?.IOW how is the US govt going to force an exporter to charge only $X/bbl? Can't be done. It can limit how much a US buyer pays for oil. Tried that years ago: remember "old oil" vs "new oil". I'll skip the details of that giant cluster f*ck. Research if you like. I knew oil traders making $30k/year that became millionaires in a year. The systersysterm was gamed so badly because the govt " experts" were so ignorant or found a easy to cash in themselves.
But let's say the get it right this time and no US rerfiney can pay morer then $X/bbl. But the same price for domestic as imported oil? If different would that violate numerous trade agreement? TransCanada is using the US govt fgor $15 BILLION over the Keystone permit: they might not get the whole pop but the smart money says they have a good chance at something. Both Canada and Mexico have lost similar cases to private companies over NAFTA violations.
So the US producers also only getggetg the lower price: what does that immediately do to their stock price? Stock owned by millions of middle income citizens (including union members) that have retirement accounts tied up in public oil companies. And lastly the lower the price of domestic oil the less future oil production and an increases in imports...if those countries accept the lower price.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Tanada wrote: Last 4th of July I was thrilled to be filling my tank for $2.00/gallon for the first time since late 2008, at the time WTI was contracting for about $52/bbl on the exchanges. I am fairly confident, though I hold no Economics degree, that $2.00/gallon gasoline would be quite a boon for Ohio compared to the $3.25 we averaged around these parts in 2013 and 2014.
Users browsing this forum: No registered users and 257 guests