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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: KLP who wrote (64553)	1/6/2003 6:53:43 AM
From: John Carragher	Respond to of 281500

No.. its due to price instability. For decades the oil industry fill every available storage tank for winter or summer demands.. Oil prices were consistent or small inflation .. Hence , no chance of losing money of inventory build up. Maybe a small cost of inventory carrying costs but offset by increase price in winter or summer of product and increase delivery charges for fuel oil in winter when product could not keep up with demand. Now with speculation in the market and political situations it is a high risk to build up huge inventories.. I believe that is why any industry doesn't want the prices jumping around, it tough enough for them to forward plan 10 to 20 years when investing in plant and equipment.