Hurricane smashes through the Gulf of Mexico oil production

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facilities and what is the market's reaction? Oil is down $5 after going up $2 since yesterday's opening. That's a $7 drop just as Gustav is striking at the heart of our largest oilfields.

I don't get it.

[HCE SuiGeneris]

1. It's all about futures trading...

not supply and demand. Because the storm didn't reach cataclysmic proportions, the price went down.

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3. But it's as if the hurricane itself has caused the market to

drop the price. If Gustav hadn't come along, I suspect that the price per barrel would've remained flat or would have increased slightly on geopolitical concerns.

I'm so glad I don't have any skin in the oil game because I'd be tearing my hair out right now.

[HCE SuiGeneris]

5. I'm thinking smaller speculators bet on a price increase

and larger blocks of more "influential" movers and shakers sucked that money up. I know... :tinfoilhat:

[Sal Minella]

2. Speculators are putting their "Gonna make me some profit" money elsewhere?

This alone certainly shoots down the "supply and demand" argument BigOil keeps trying to shove down our throats.

From this, I bet a decent statistician could figure exactly how much of our inflated gas price is due to the speculators in the game.

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4. Could you please elaborate..?

"This alone certainly shoots down the "supply and demand" argument BigOil keeps trying to shove down our throats."

How so?

"I bet a decent statistician could figure exactly how much of our inflated gas price is due to the speculators in the game."

Please explain.

[Sal Minella]

7. The supply is threatened, but the price goes down -- people are investing their speculation money

somewhere else.

[malaise]

6. What don't you get?

There's a Rethug CONvention going on - they cannot raise the price. Enjoy the con job.

[madrchsod]

8. it was`t a big storm....

most if not all oil rigs and refineries can handle cat 2-3 hurricanes with no problems. cat 4-5 is when the oil industry begins to worry.katrina did`t damage the oil rigs she disrupted the pipelines from the rigs to the refineries. the big problem was the movement of the pipes on the sea bed and exposure of the pipes on land.