a touch of good news

Price CHNG % Time
Nymex Gasoline Future 167.75 -8.04 -4.57 11:23
Nymex Heating Oil Future 191.50 -8.19 -4.10 11:23

in cents/gallon

and fell off of the front page as if fired out of a cannon...does no one want to comment on the small light here? even if it is only for a while???

subjectProdigal

I can limit my driving to some extent and mitigate that cost as best I can. I can't stop heating my house if I don't want my pipes to freeze, burst, and cause horrific damage. Not to mention, I don't want kidcicles all winter either!

Thanks for the glimpse of the light. It's been so long, I hardly recognized it. :)

all people who currently depend on petroproducts (which is MOST of us). Should we conserve? Hell yes! Should we develop new technologies and energy sources? Hell yes! The only conundrum is that these things don't happen when prices are low and people get killed financially when prices are high...what a viscous cycle.

subjectProdigal

So, talk to me like I'm a dumbbell, please. People are buying gasoline futures at $1.68 a gallon? Have I got that right? If so, what's behind their confidence that it'll eventually descend to that price point? Hell of a gamble, it seems to me. That's a monstrous correction from where we are now.

but, these are wholesale prices and not retail so, while it is a nice correction from the recent FUTURES prices it really is not going to mean that you will be able to buy at a $1.68 anytime soon.

Essentially, a futures contract says I am buying this commodity on (for example) Feb 15, 2006 for the price offered (in this case $1.68). It is like locking in the sale price before the actual spot (or current) price is set...it is a gamble...but a fairly educated one. If the 'spot price' on Feb15 is higher, then I have made money...if it is lower, then I have lost.

The recent trend DOWN in these futures prices (was as high as $2.18 two weeks ago) indicates that the brokers in the market feel that prices will receed in the future.

subjectProdigal

I have an uncertain layman's grasp on the concept of future selling (It's one of the mechanisms that allows say, McDonalds, some stability in their pricing, so their burgers don't shoot up and down in reaction to the short term price of beef. Right?)

In any case, the figures you provide -- 1.68 against 2.18 -- are a remarkable reduction, roughly 25%. Do you think this is a sober projection or a case of overshoot, market momentum running off the leash?