Bingo.
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Delta buys a refinery
- Thread starter nittany03
- Start date
I can't speak to 90%, but speculation, known in polite circles as "trading a commodity"
is definitely a factor. It's funny though, many of the same who cry to the hills how Obama-care tampers with the "wisdom of the free market" and bemoan it as Socialism, are the first to beg the government to step in and curb oil "speculators". Don't get me wrong, not taking a position vis-a-vis either issue, just an amusing observation. Another issue to muddy the waters gents...We tend to speak of the commodity as "oil". That is, it's all the same. The fact is, that it isn't even close to the same. The oil that comes out of the ground in Odessa, TX (West Texas Intermediate or WTI) is a VERY different product than the stuff that comes out of the ground in Odessa, Ukraine. Each barrel of "oil" contains different quantities of different fractions, some requires more extensive and consequently expensive refining...you get the point. To call a barrel of oil a barrel of oil is a gross simplification. Part of the reason the gasoline market reacts so violently to interruptions in gulf oil production is that the vast majority of that oil is LA Light Sweet Crude...from which we get a disproportionately high percentage of the gasoline fraction. The "sweet" refers to the relatively low sulfur content...light, the amount of paraffin or wax in the oil. Crude oil that is low in both sulphur and paraffin or "light sweet" is significantly more expensive than other oils. For those that are interested, or budding chemical engineers...
http://en.wikipedia.org/wiki/List_of_crude_oil_products