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Gold/Mining/Energy : Oil & Gas Price Economics -- Ignore unavailable to you. Want to Upgrade?

To: rajaggs who wrote (289)	9/23/2000 4:40:14 PM
From: excardog	Read Replies (2) \| Respond to of 350

jaggs, as I understand it the oil needs to be replaced within 30 days. The refiners will bid on it next week. So if they must replace within a month won't they just purchase a like quantity in the forward futures market? Maybe they wait for futures price to decline before they buy but what if market heads higher? Probably a way for winning bidder to make some extra funds if they guess right.Interesting times.

To: rajaggs who wrote (289)	10/9/2000 3:23:53 PM
From: Ed Ajootian	Read Replies (2) \| Respond to of 350

Jaggs, I agree, now that the dust has settled on the SPR release it seems to be a non-event in the overall scheme of things. Also, with the 800,000 bopd of extra OPEC oil flowing for 9 days so far it seems to be having only a modest impact in keeping oil prices down. I realize that part of what's keeping prices up right now is the political tensions, but still, I bet that is worth only a buck or two on the price. I believe oil prices are now in a nearly perfect range, which is high enough to allow for the creation of a huge amount of cash flow for the US oil producers, yet not so high as to choke off the economy. BTW, I've been meaning to ask a question here. I remember reading that OPEC has been complaining that the consuming nations have been artificially distorting the supply/demand parameters for oil and this has contributed to the high current price for oil. One of these distortive things mentioned was the incidence of high consumption taxes on oil. I don't understand how high taxes on the consumption of a commodity could artificially keep its price too high. I would think it would do the opposite, since it would lead to less use (i.e., demand) of it than would otherwise occur. Can someone less "economics-challenged" than me help me out here?