oil speculators are now liquidating their oil contracts, and are now betting on the price of oil to fall:


Speculative traders, particular large investment funds, have been liquidating oil positions in recent months and are now shorting crude contracts, or betting that prices will fall, for the first time in 17 months.


still find it amazing that oil has fallen almost $25/barrel, yet in many areas the price of diesel has remained unchanged. think it would remain unchanged if oil suddenly rose $25/barrel? my guess would be probably not.

 

There's always another speculator that can hold their margin position longer up or down....hopefully the swings will burn most of them and discourage future speculation in this market.

Yep, I agree price at the pump has only changed down $.07 to $4.62

 

since less than 5% cash is required to purchase oil contracts, if there is a major price correction, many will simply file bankruptcy and avoid taking a real loss. it's already happened with a company (SemGroup) who filed for bankruptcy after oil slid all the way back to a paltry $125/barrel (funny how they'll only lose 5% of the cash for the contracts, but they took in 100% of the profits).

 

At this point diesel is selling at $4.23 to 4.30 here in Texas, at least at Flying J.
I think heating oil futures(close diesel relative) have dropped to the 3.40 range, meaning, $.60 for tax & profit, diesel should be approaching 4.00, if prices keep falling. Gasoline futures more closely trade at the cuurent market price, less $.60. Diesel is VERY slow to come down. I think the deman/supply for diesel is much greater than gas. There is way more gas production, so prices drop quicker. Regular is getting close to $3.50, in some places.

 

you're right, but before so much U.S. diesel was able to be sold overseas, diesel prices were way less than gas even with it's use as home heating oil.

 

Just read somewhere (cant remember where) that T Boone Pickens said diesel will never be cheaper than gasoline again. I know, dont believe everything you read. But, he is an oil guy.

 

an oil guy who is trying to claim a second fortune in alternative energy.
not any different than GE hopping on the global warming bandwagon, then trying to sell us dangerous mercury filled light bulbs- it's all about trying to cash in on the next big thing.