bertsmobile1
Lawn Royalty
- Joined
- Nov 29, 2014
- Threads
- 65
- Messages
- 24,995
Fuel prices have almost nothing to do with governments apart from any taxes that are levied on fuels.
Petrol refineries & chemical plants buy oil futures just sufficient to cover their projected future output .
Speculators then move in a buy the excess futures in the hope that refineries will run short so the speculators can charge them a motza
However it is illegal for the oil producers to sell directly to the refineries , it all has to go through the futures exchanges so when there looks like being a problem with supply the speculators move in and push the price up in order to make massive short term profits .
So it is hedge funds, investment funds & pension funds that jack up the price .
The refineries are always trying to get crude for the lowest possible price so for them in times like this they drop futures & buy on the spot market on a daily basis.
During covid the speculators all got burned and had to pay for oil that they could not on sell and could not store either as all of the storeage space availible was full .
As with a lot of things it is all of the middle men and screen jockies that are setting the price .
The oil producers want to get the highest price they can for their oil because it is a finite resource so once it is all pumped, there is no more ,
A command driven economy will always exploit fear & panic .
If you owned 10 rental properties & the next town got flooded so hundreds of people were looking for accomodation while they rebuilt, do you offer them a discount because they are needy or jack the price up because 90 of them will miss out so will be willing to pay more ?
Petrol refineries & chemical plants buy oil futures just sufficient to cover their projected future output .
Speculators then move in a buy the excess futures in the hope that refineries will run short so the speculators can charge them a motza
However it is illegal for the oil producers to sell directly to the refineries , it all has to go through the futures exchanges so when there looks like being a problem with supply the speculators move in and push the price up in order to make massive short term profits .
So it is hedge funds, investment funds & pension funds that jack up the price .
The refineries are always trying to get crude for the lowest possible price so for them in times like this they drop futures & buy on the spot market on a daily basis.
During covid the speculators all got burned and had to pay for oil that they could not on sell and could not store either as all of the storeage space availible was full .
As with a lot of things it is all of the middle men and screen jockies that are setting the price .
The oil producers want to get the highest price they can for their oil because it is a finite resource so once it is all pumped, there is no more ,
A command driven economy will always exploit fear & panic .
If you owned 10 rental properties & the next town got flooded so hundreds of people were looking for accomodation while they rebuilt, do you offer them a discount because they are needy or jack the price up because 90 of them will miss out so will be willing to pay more ?