Believe it or not, it was cold today in NY and there was even a little snow falling first thing this morning so all the traders walked to work and said "Yay, now they will buy all my oil to heat their homes and use up that pesky surplus." So for about an hour the price of oil went up.
Bad news – while they have been sitting inside the stock exchange, it has warmed up already and it looks like we won’t see a temperature below 40 until Thanksgiving.
That means not only will Oil go down but there will be a huge build next week and you will start to hear stories about how we are actually running out of places to put the oil.
This is a real testimony to the power of the free market!
When Oil hit $70 a barrel these guys got oil out of every nook and cranny and loaded up every possible vessel and sent it straight over here. eg. Let’s say someone offered you $1.40 for every dollar you could give them right away – you would pretty much pull out all the stops right?
That is the free market in action.
The problem with oil is that once they put the oil in the boats, the boats take a month to get here. So right now there is a conga line of every tanker that they could slap an engine on heading for our country just as we are running out of space to store the oil. Sorry Mr. Tanker driver – we just can’t fit any more oil in our country. Very super sorry my speculator who paid for that oil as it left Kuwait but I really don’t need that oil for $70. No, not for $60 either, where would I put it? $55? Well I guess I can fit a little in the garage... That is our wonderful free market in action!
Of course once you fill up the garage they have to get the price back down to $45 so you will start taking the SUV on joyrides again. As a pool owner, I look forward to wasting gas again but we really do need to do something about this for the long term because it will take nothing more than a storm to run the prices right back up.
