Thread: Fuel Prices
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Old 11-22-2005, 04:34 PM   #11
Phillyfanfrombirth
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Join Date: Dec 2004
Location: South Central PA
Posts: 358
Default Re: Fuel Prices

Markets fluctuate daily, at the exchange and at the pump. Just as in stocks, rarely will you be able to peg daily fluctuations on one thing or another, merely supply and demand (and I would argue liquidity) are the culprits... a lesson in markets. Another lesson is lag times... there is a normal lag time between futures and retail. That lag time is minimized in times of hysteria, which we saw in the week following Katrina.

Thunderhorse is the rig that you are speaking of... and it was Hurricane Dennis. The monster rig was supposed to be online by early next year (expectations mean more to the market than anything), and that event seemed to throw doubt into future supply... something that was later realized with Katrina and Rita. Dare I say, once again, the market was right.

As far as the public perceiving a threat... here's some fundamental investment advice... when the public perceives it, your close to the end. Parabolic "no end in sight" mentality is a key indicator of market tops and bottoms...

We've seen it is baseball cards, beanie babies, Pokemon cards, stocks, bonds, oil, natural gas, and now real estate... Markets work, period.

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