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| Why Fuel Is So Cheap in Denver | |
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| Tweet Topic Started: Feb 26 2012, 09:11 PM (242 Views) | |
| Stoney | Feb 26 2012, 09:11 PM Post #1 |
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I guess more domestic supply works. |
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| Corky52 | Feb 26 2012, 09:16 PM Post #2 |
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Fire & Ice Senior Diplomat
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Stoney, Only reason is the oil can't be moved to the world market, minute you open the transport prices in the area will rise. Gee I wonder why???????
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| Stoney | Feb 26 2012, 09:23 PM Post #3 |
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Right, but that doesn't change the fact that an increase in supply diminished prices. Yes, it would be less so if the coastal refineries were able to handle the supply. It also points out that free markets can work. The refineries could have easily used your argument to keep their prices high. |
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| Corky52 | Feb 26 2012, 09:29 PM Post #4 |
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Fire & Ice Senior Diplomat
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Stoney, Only a limited market, not a free market. Also you have to wonder how soon the oil will simply be left in the ground rather than being sold? Limited pumping would raise the price and save the oil for later sale at a much higher price. Market anomalies are a wonderful thing to watch.
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| Stoney | Feb 26 2012, 09:40 PM Post #5 |
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I don't see any reason to think a limited market isn't a free market. If they're making money on the oil they'll keep pumping and maybe it'll keep coming down to a point where they make money and can transport it further and still make money. A free market will seek that level. |
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| Corky52 | Feb 26 2012, 09:54 PM Post #6 |
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Fire & Ice Senior Diplomat
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Stoney, Oil will stay in the ground when the longterm money is better than the short term money, that is the free market. Price in Denver will not go up, might go down a bit till equilibrium in small market is reached and longterm it makes more sense to hold than sell. Key is that oil does not have to be pumped to have value and does not lose value due to spoilage, costs nothing to leave the oil where it is.
Edited by Corky52, Feb 26 2012, 09:56 PM.
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| Stoney | Feb 26 2012, 10:09 PM Post #7 |
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But leaving the oil where it is does not produce income. I would agree that some would look at it as long term investment instead of income and leave it. Maybe some would agree with you that oil is on the way out and sell it while its still high. That's why central planning doesn't work. There are too many variables involved. |
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| Corky52 | Feb 26 2012, 10:11 PM Post #8 |
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Fire & Ice Senior Diplomat
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Stoney, I don't want central planning, only a truly free energy market that can't be manipulated and doesn't have favored players.
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| Stoney | Feb 26 2012, 10:19 PM Post #9 |
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We're on the same page there for sure. |
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