PsychoticDan
21-04-2006, 23:20
Here's a great article that gives a good oil trading 101 lesson on how oil prices are set. As you can see from the article, they are not set by oil companies.
With crude oil hitting record levels and gasoline prices nearing last summer's highs, a number of factors are affecting what you can expect to pay at the pump.
What are the main factors behind the rise in oil prices?
The price of oil is set by a global market of buyers and sellers — each look at a variety of factors before deciding how much they are willing to pay or accept for a barrel of crude. Some of those factors are short-term trends, such as weekly statistics on oil supplies in storage. Traders also look at economic trends that may indicate changes in demand for oil.
But since some traders have no intention of ever using the oil, prices can also move on just the potential for future changes in supply or demand. With continued signs of strong economic growth, and multiple hot spots in key oil producing countries, many of those traders make bets on little more than a news flash. And many are betting that prices will go higher.
It goes on to talk about where all the money goes and it goes into specifics about reformulating gasoline etc...
http://www.msnbc.msn.com/id/12410064/
With crude oil hitting record levels and gasoline prices nearing last summer's highs, a number of factors are affecting what you can expect to pay at the pump.
What are the main factors behind the rise in oil prices?
The price of oil is set by a global market of buyers and sellers — each look at a variety of factors before deciding how much they are willing to pay or accept for a barrel of crude. Some of those factors are short-term trends, such as weekly statistics on oil supplies in storage. Traders also look at economic trends that may indicate changes in demand for oil.
But since some traders have no intention of ever using the oil, prices can also move on just the potential for future changes in supply or demand. With continued signs of strong economic growth, and multiple hot spots in key oil producing countries, many of those traders make bets on little more than a news flash. And many are betting that prices will go higher.
It goes on to talk about where all the money goes and it goes into specifics about reformulating gasoline etc...
http://www.msnbc.msn.com/id/12410064/