Hi Yodacaster,I posted our gas prices in Imperial units for the benefit of our friends south of the border since most Canadians know the metric cost of our gas.Ours here in NL is now equivalent of $5.90/gal or about $1.37/lt. and pundits figure that when the summer increases come,we'll hit $1.50/lt.

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A lesson in Economic, not Politics: If you know how the ups and downs of an economy work you can bypass the reading as you already know what I am about to unfold.

To understand why gas prices go up you must understand global economy. Some may not consider this to be a factor but it is a factoid. Corporations such as Exxon, BP, etc. base their success on growth. During the 90s they grew to epic proportions during the development of emerging markets worldwide. During the past 3 years the consumption of fossil fuels has decreased, more energy efficient vehicles and what not. Hence, the growth of the large corporations (who based their funding for growth in the past on investors and stock holders) must continue to maintain their level of growth or suffer major losses. The wealthy will not stand for losses. As a result of the need for LESS fuel, the balance to continue profit (for the companies and their shareholders), must come from the consumer (YOU).

The ideal time to raise prices is now and blame it on other factors. Stock market is at an all time high (great to sell and rake in the profit if you are a corporate insider) a correction in the market? Possibly. The last good time to buy any stock or investment in the market was when the BP disaster occurred. Insiders and investors have been waiting for a down turn in the market for almost a year. And so have the profit takers. They are needing to sell of before the stocks tank. If you want proof of this just check out “Insider Trading on just how much they have been selling off in the past 2-3 months compared to how much they purchased. With the hopes of higher gas prices (which affect everything) the economy will tank and the insiders will buy in, and the so called news media will blame specific politicians and countries for the condition of your economy.

Jump on the band wagon everyone: fear the Mid East and rising cost of $120+ a barrel oil. Blame your favorite “evil” politician, blame a entire race of people, Fear the downfall of the economy, Watch the news religiously and believe what they want you to know and let them tell you how to think. It’s a lot easier that way. As the great oil man once stated, keep um dumb and fearful and they will do as you say.

Another factoid, After the economy bottoms out to a new level sometime after or during the summer, the stock market will rise sharply as the insiders will have placed their buys, and have restructured their corporations to hire new “Executives” with Stock Options at a all time low price will have occurred and the bottom will have passed. And, we will be on a ride for another rise in the economy.

So in conclusion the lesson here is there is a cycle going on, the bottom of the cycle for investors and insiders are brief and they sell high and buy low. If you want to follow the cycle follow the Insiders (the corporate execs CFOs, CEOs, etc…). they know when to sell and buy because they can indirectly control the cycle.

Good luck and may you have the best of good buys.

Yes.... but Fossil fuels are not just used as fuel for transportation.
Much of what we consume today is a derivative of fossil fuels.

I disagree with your premise, I worked on Wall Street (Nasdaq) in the early nineties. It was much less complicated then, not that it was anything but simple.

Future's.... which are where fossil fuels are categorized, fall and rise according to demands, but that is not the only factor. That would be too simple. As far as your insider trading theory...
Please, the markets have surpassed where one or two insiders dictate prices. Many more variables factor in to the price of futures. Software programs have taken over the trading floors at the exchange's, you do not have a 100 traders screaming at each other and waving little pieces of papers representing Puts and Calls. the by the second or by the minute transactions are so vast and rapid that they defy any attempt by individuals to keep up.
Hence computers and software which specializes in trading.

The demand of durable goods affect future's price's, Commodities affect future's. It is very much interrelated and the logistics at one point on the globe directly affect another part of the equation.

As far as a reduction in fossil fuels, no it has steadily increased, but there is a tipping point where a commodity prices itself out of the market, or when fuel prices reach a cost that is above the possibility of purchase except for a wealthy minority.
Now you have less demand and therefore much reduced profits.
This is where futures enter the equation, anticipating that in six months, the price will be so high that the reduction in demand will severely affect the resulting profits.

If a hundred people buy fuel @ $6.00 a Gal. but then it rises to $12.00 a gallon, you will have fewer buyers and eventually as the price rises even further, fewer customers mean that the price increase no longer offset's the reduction in demand....
Thus why you would lock in a Call @ $7.50 a Gal or a Put for $10.00 today in anticipation.
If your prediction of rising prices doesn't occur, the transaction is nullified and the only cost is the cost of putting in that transaction...


Are you familiar with puts and calls..

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Here you go lads. This'll make your toes curl.

http://www.bbc.co.uk/news/business-12250225

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Thanks for posting lads.

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Wow, that video was interesting. I assume no-doubt that is the case here.

Here, there are 2 refineries in NZ. One is owned by Mobil, Shell, Caltex and BP. They all have a stake in the business. A small share is privately owned- with Mobil, Shell, Caltex totaling 49% share. BP has 51% share. Hardly anyone knows it- but the AA (Automobile Association of NZ) have a stake in the refinery aswell- but not much. BP also have a stake in AA- and we hear the AA telling us as a "independant" that fuel prices are set to go up because of _________... (enter excuse). I would have thought they werent able to make such comments at all... anyhoooo

So the fuel is tariffed per litre of fuel at the refinery. This is obviously decided by all the shareholders of the refinery, but ultimately BP has veto of the desicion here. So being that this refinery is one of the only two in NZ, you can say that BP has us by the short and curlies at the pump.

The second refinery however, is privately owned and operated by Gull NZ Ltd which surprise surprise. They sell their fuel cheaper.

Conflicts, economies, taxes, levies, production costs etc yadda yadda yadda... hasnt changed the bottom line for the giant companies at all.. They blame it all on todays conflicts, market volitality which is all hype. They want us to believe it and buy in to the idea. Yeah they are going to jack the prices when they feel like it and much like the housing market, we will be priced out of it. Then prices will come down, then back up again... much like a mortgage rate. Around and around it goes like a cycle. funny that It will never be stable, there are too many profits to be made.

I guess there is much to be made back after the oil spill in the Gulf of Mexico cost BP billions.

I clearly wish I was an oil tycoon, could you imagine the amount of vintage banjos I'd have...

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Mate, that's chicken feed. We'd be partying if we had them prices. Were looking at $9 US avg. Per gallon in the UK. I worked it out a few weeks back before the last petrol rise.

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