Berkeley CSUA MOTD:Entry 51569
Berkeley CSUA MOTD
2019/05/21 [General] UID:1000 Activity:popular

2008/10/17-22 [Science/Disaster] UID:51569 Activity:kinda low
        Article speculating that "oil bubble" was caused by hedge funds
        and that oil prices are down now because hedge funds have had
        massive redemptions. Where are the peak oil weenies now? Oil -> $50.
        \_ What are you, twelve?  A drop in price is an opportunity to
           fix our oil dependency once and for all.
        \_ Peak Oil is not a matter of it, just when. As I said before,
           oil prices are very inelestic and since demand is down, prices
           should be way down. They will be back up again soon enough, take
           advantage of the respite to save.
           \_ Uh huh. Obviously oil prices are not that inelastic, because
              they've fallen like a stone.
              \_ Inelastic does not mean what you think it means. Oil
                 consumption in the US is expected to decline, in spite
                 of the fact that prices are down. Worldwide demand is still
                 going to go up, just less than before.
                 \_ So worldwide demand is going up, but prices are falling
                    like a stone. Please start making sense.
                    \_ Go read an econ textbook or something. Elastic ==
                       price and demand are tightly correlated. Inelastic ==
                       demand stays constant (relatively) no matter what
                       happens to price.
              (this is better actually)
                       \_ I've taken more econ. than you have I bet.
                          Please to be explaining why the price of oil is
                          falling. If demand is constant no matter what
                          then what incentive is there for the price to fall?
                          \_ Hmm, let me think, it is called a supply/demand
                             curve. I wonder what variable other than demand
                             could be in play here...
                             \_ You think supplies are increasing that
                                much, huh? Kinda blows away the idea that
                                we are close to peak oil, wot wot? 2008
                                production is 1-2% higher than last year:
                                we are close to peak oil, wot wot?
                                (2008 production is 1-2% higher than last year:
                       . Clearly that's
                                enough to cause the price to fall in half.
                                WTF do you think these curves look like?
                                No, the issue here is with the demand
                                side: specifically, speculators.
                                \_ I think it is pretty obvious what the
                                   curves look like and that you are in denial
                                   about it. A very small increase or decrease
                                   in production over demand has a huge impact
                                   on prices. No one (or no reasonable person,
                                   at least) would claim that the "Peak" event
                                   will happen all at once. There is always
                                   going to be small movement up and down, as
                                   global events influence production. Also,
                                   as prices go up, new sources become
                                   economically recoverable. You should
                                   consider the strengthening dollar in your
                                   analaysis of how much prices have moved.
                                   Priced in Yen or Euro's, oil prices have
                                   moved quite a bit less. Don't mistake dollar
                                   volatility for commodity price volitility.
                       The IEA still believes crude consumption will be higher
                       than in the same period last year (+400,000 bpd)
        \_ sure, lots of levered long plays on oil by all sorts of funds
           (hedge, pension, other institutionals).  with global slowdown,
           everyone ran for the exits.  this is common knowledge for many
           traders.  those evil speculaterss!!1
        \_ I hope they're topping off the Strategic Petroleum Reserve.
        \_ Peak oil isn't scheduled to arrive until around 2010-2012 -- I
           said multiple times only a global recession could drive down prices
           which is exactly what is happening.  Since the market is projecting
           a global economic contraction, demand will be reduced so prices
           go down.  This all has nothing to do with peak oil, which is about
           the peak in oil *SUPPLY*.
           \_ Peak oil weenies claimed that the reason prices were so high
              was because the world was going to run out by 2020 or
              something. That was fear mongering. There's so much supply
              that OPEC is talking about reducing output. The current price
              is a good indicator that we're not close to peak oil yet.
              You don't go from "plentiful oil" to "peak oil" in 2 years
              (or whatever it was), sorry.
              \_ Peak oil specifically says the second 1/2 of the world's
                 total usable oil will be so expensive to extract that
                 it'll cost MORE to extract with current technology than to
                 sell the oil, hence no one will extract it anymore.
                 \_ Okay. And what evidence is there we are at the halfway
              \_ If the definition of "plentiful oil" is "more than demand"
                 then indeed it's easy to do that.  Oil supply has been flat
                 for about 3 years now, and there is no proof that it's going
                 to go up anytime soon.
                 \_ Supply is going to (roughly) match demand. When you can say
                    there's a problem is when supply cannot be met. One
                    indicator of that is when production decreases even as
                    prices rise. Clearly, we are not there yet.
        \- A good (non-ideological) question is "why do oil prices have so
           much more volatility than the instability of supply and demand".
           the simple answer is the prices are also a function of changing
           information/expectation *and* given a production cartel and other
           influential players with "market power" [to abuse that term a
           bit]. so in addition to speculators, there is strategic production
           strategy. it's not reasonable to write another 1000 words on this
           and frankly i dont understand it that well, but there more to it
           than supply and demand and elasticity. You may also want to
           look up Contango and Backwardation. Per my earlier link about
           manipulation in the copper mkt, the way these mkts work is very
           far removed from theory ... i.e. there is no simple answer.
           [if you are familar with economics, part of thinking about this
           involves the "art" of teasing out short run phenomena from long
           run equillibria. for an analogy in FX, say DORNBUSCH OVERSHOOTING
           vs convergence to PPP "eventually"].
2019/05/21 [General] UID:1000 Activity:popular

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2008/10/9 [Science/Disaster] UID:51452 Activity:high
10/9    I'm just wondering where all the "peak oil" morons are now that
        oil prices have fallen almost in half. Anyone who looked at
        consumption versus production could plainly see that, peak oil or
        not, the recent spike was mostly speculative.
        \_ the speculation of peak oil fueled it out, though peak oil
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2008/6/12-13 [Science/GlobalWarming] UID:50244 Activity:very high
6/12    By the way, the Government estimates that the outer continental shelf,
        (the one they said no to yesterday), has 76 billion barrels of oil in
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        America for the next 34 years at our current pace. That's in the one
2008/5/22 [Science/GlobalWarming, Politics/Domestic/California] UID:50026 Activity:high
5/22    We brought together the heads of big oil.
          See that big head over there? Yeah, he runs Shell. That one?  That
        runs ExxonMobil. Mr. Big oil, we're here to talk about the high price
        of gasoline.  How could it have possibly gotten this high?
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2008/3/7-9 [Science/Disaster, Science/GlobalWarming] UID:49375 Activity:high
3/7     So what's the truth about oil prices? I'm sure supply is about
        where it was 5 years ago and I cannot imagine demand is that much
        higher and yet prices are almost triple. Is this a speculative
        bubble where investors are buying oil because they perceive the
        price of oil to be rising, is this manipulated by OPEC, or have
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2007/10/24-26 [Science/GlobalWarming] UID:48438 Activity:nil
10/24   "Peak oil projections from Chevron's CTO | Tech news blog - CNET:"
        I don't get the math.  If "there is a trillion gallons left for human
        consumption" and human are consuming "about 3 billion gallons a day
        worldwide", doesn't mean that we will use up what's left in one year?
        \- world stock is probaby barrels.
2007/6/14-19 [Science/GlobalWarming] UID:46938 Activity:high
6/13    Guess what liberal urbanists-- automobile is not going away! Boohoo!
        Go ahead and cry you cry babies:
        \_ the author clearly doesn't understand the concept of peak oil. -tom
           \_ tom clearly didn't read #1 carefully. We've already tapped
              and used up 1 out of 6-7 units of estimated oil on earth.
2007/3/5-7 [Science/GlobalWarming] UID:45879 Activity:kinda low 90%like:45867
3/4     So much for the peak oil myth (
        \_ I am NostraMotd. Oil price will peak in 2010. World War III
           will happen in 2012 in a blink of an eye.    -nostramotd
           \_ So you went into a trance and your assistant recorded your
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Election 2008 latest news MARKETWATCH FIRST TAKE OPEC left to its own devices Commentary: Hedge fund redemptions lay bare the role in oil speculation By MarketWatch Last update: 2:52 pm EDT Oct. SAN FRANCISCO (MarketWatch) -- The Organization of Petroleum Exporting Nations has called an emergency meeting for Oct. Crude, despite an uptick Friday, has crumbled to $72 a barrel, half the price it fetched in July. Gone is the fear that we are in the pockets of "folks that don't like us very much." Prices are down at the pump, and talk radio has moved on, feasting now on banks, bailouts and rampant greed and corruption on Wall Street. As the industrial world withdraws into a recessionary shell, it takes oil demand with it. China and India's insatiable thirst for oil looks meager now as factory output slows to a trickle. But there's also been a rush of roving capital out of the market. According to the latest data from Hedge Fund Research, third-quarter hedge fund redemptions hit a record-high $210 billion, spearheading an exodus wealth that burst one of the biggest commodities bubbles of all time. It's no coincidence that oil prices plunged in tandem with these record withdrawals, exposing for all to see just how much of the summer's oil-price spike was driven by speculators. While oil's deep "correction" alarms Big Oil, it's even more alarming to producing nations whose economies are entirely grounded in petro-dollars. The extreme pain caused by this sudden revenue loss can be gauged by OPEC's decision to move up their next meeting from November to October, less than two weeks ahead of the US presidential election. This raises the likelihood of another severe tongue-lashing by a politically supercharged Washington, but that's clearly better than enduring further losses. With speculators fleeing, the cartel is going to have to build a floor under oil prices through disciplined production cuts. And given the wheezing global economy, OPEC has only an outside chance of pushing prices back up to $100 a barrel even if they manage to significantly slash output. Unless, of course, another war or natural disaster disrupts supply lines -- at which point all bets are off, and OPEC has us all once again over the proverbial barrel. NASDAQ traded symbols and their current financial status. Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. SEHK intraday data is provided by Comstock and is at least 60-minutes delayed.
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Drinking water is a good example of a good that has inelastic characteristics in that people will pay anything for it (high or low prices with relatively equivalent quantity demanded), so it is not elastic. On the other hand, demand for sugar is very elastic because as the price of sugar increases, there are many substitutions which consumers may switch to. The demand for a good is relatively inelastic when the change in quantity demanded is less than change in price. Goods and services for which no substitutes exist are generally inelastic. antibiotic, for example, becomes highly inelastic when it alone can kill an infection resistant to all other antibiotics. Rather than die of an infection, patients will generally be willing to pay whatever is necessary to acquire enough of the antibiotic to kill the infection. A set of graphs shows the relationship between demand and total revenue. As price decreases in the elastic range, revenue increases, but in the inelastic range, revenue decreases. A set of graphs shows the relationship between demand and total revenue. As price decreases in the elastic range, revenue increases, but in the inelastic range, revenue decreases. undefined), any increase in the price, no matter how small, will cause demand for the good to drop to zero. Hence, when the price is raised, the total revenue of producers falls to zero. A banknote is the classic example of a perfectly elastic good; An example of a perfectly inelastic good is a human heart for someone who needs a transplant; neither increases nor decreases in price affect the quantity demanded (no matter what the price, a person will pay for one heart but only one; nobody would buy more than the exact amount of hearts demanded, no matter how low the price is). edit Mathematical definition The formula used to calculate the coefficient of price elasticity of demand for a given product is E_d = - \frac{\%\ \mbox{change in quantity demanded}}{\%\ \mbox{change in price}} = - \frac{\Delta Q_d/Q_d}{\Delta P_d/P_d} Conventions differ regarding the minus sign, considering remarks like "price elasticity of demand is usually negative". are the original or final values for quantity and price. This formula is usually valid either way as long as you are consistent and choose only original values or only final values. edit Point-price elasticity * Point Elasticity = (% change in Quantity) / (% change in Price) * Point Elasticity = (DeltaQ/Q)/(DeltaP/P) * Point Elasticity = (P DeltaQ) / (Q DeltaP) * Point Elasticity = (P/Q)(DeltaQ/DeltaP) Note: In the limit (or "at the margin"), "(DeltaQ/DeltaP)" is the derivative of the demand function with respect to P "Q" means 'Quantity' and "P" means 'Price'. We wish to determine the point-price elasticity of demand at P = 80 and P = 40. First, we take the derivative of the demand function Q with respect to P: {{\partial Q}\over{\partial P}} = -06 Next we apply the equation for point-price elasticity, namely E_p={{\partial Q}\over{\partial P}}{P \over Q } to the ordered pairs (40, 976) and (80, 952).
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Arc Elasticity) First we'll need to find the data we need. We know that the original price is $9 and the new price is $10, so we have Price(OLD)=$9 and Price(NEW)=$10. From the chart we see that the quantity demanded when the price is $9 is 150 and when the price is $10 is 110. Since we're going from $9 to $10, we have QDemand(OLD)=150 and QDemand(NEW)=110, where "QDemand" is short for "Quantity Demanded". So we have: Price(OLD)=9 Price(NEW)=10 QDemand(OLD)=150 QDemand(NEW)=110 To calculate the price elasticity, we need to know what the percentage change in quantity demand is and what the percentage change in price is. Final Step of Calculating the Price Elasticity of Demand We go back to our formula of: PEoD = (% Change in Quantity Demanded)/(% Change in Price) We can now fill in the two percentages in this equation using the figures we calculated earlier. We conclude that the price elasticity of demand when the price increases from $9 to $10 is 24005. A good economist is not just interested in calculating numbers. in the case of price elasticity of demand it is used to see how sensitive the demand for a good is to a price change. The higher the price elasticity, the more sensitive consumers are to price changes. A very high price elasticity suggests that when the price of a good goes up, consumers will buy a great deal less of it and when the price of that good goes down, consumers will buy a great deal more. A very low price elasticity implies just the opposite, that changes in price have little influence on demand. Often an assignment or a test will ask you a follow up question such as "Is the good price elastic or inelastic between $9 and $10". To answer that question, you use the following rule of thumb: * If PEoD > 1 then Demand is Price Elastic (Demand is sensitive to price changes) * If PEoD = 1 then Demand is Unit Elastic * If PEoD < 1 then Demand is Price Inelastic (Demand is not sensitive to price changes) Recall that we always ignore the negative sign when analyzing price elasticity, so PEoD is always positive. In the case of our good, we calculated the price elasticity of demand to be 24005, so our good is price elastic and thus demand is very sensitive to price changes.
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Oil Homepage Energy Links | About Us | Contact Us | Help Info Center Info Center Energy Events Calendar Forecasts Statistics & Tables Marine Rig Locator Industry Stats October 2008 Vol. No. Inc. All rights reserved. Hidden links: 27.
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On Europe Falling oil demand puts OPEC in a bind: John Kemp * Reuters * , Wednesday October 15 2008 -- John Kemp is a Reuters columnist. The opinions expressed are his own -- By John Kemp LONDON, Oct 15 (Reuters) - For the last two years, analysts have argued about how far oil demand would respond to the rise in prices. But in the past few weeks evidence of a sharp decline in demand has become incontrovertible, resulting in big cuts in forecast oil demand, and posing a sharp dilemma for OPEC about how to respond when ministers meet on Nov 18. The International Energy Agency (IEA) has been steadily dropping its demand forecasts for more than a year, as surging prices have forced conservation measures and substitution for cheaper fuels, while a slowing economy, especially in the United States, bites further into demand. 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