you wrote:<<Prices for oil and distillates are not set by oil companies.
Prices are set by traders and such in New York >>>
You're absolutely correct! Just as the price of company stocks are set by
rumor, supply & demand, fear and other emotions, fuel & gas prices are set
by headlines, and the other things I mentioned. The traders you mention are
either trying to make money for themselves or save money for their
employers - typically big oil who try to buy as low as possible & use
futures options to accomplish that. If the price is going up and they can
buy options on X thousands barrels of oil, they'll lock in the price.
Depending on what happens they either hold it and exercize the option or
sell it for one more favorable.
Some people seem to think Billy-Bob down at the local Texaco gets bored and
raises his prices - so he can make a few more pennies - it doesn't happen
like that with gas, groceries, cars, electricity, etc. Only the
neighborhood lemonade stand does that - but only until Sally-Sue sees an
opportunity to sell lower and opens her own lemonade stand.
At least that's how I understand it --
;-)
Sincerely,
Larry T ('74 911, '67 MGB, 78 240D)
A Blood Test for your oil - www.youroil.net
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