Tuesday, September 16, 2008

Oil Demogogery On the Air

Once again Mr Phil Williams is trying to make out that oil prices are artificialy inflated.
It's a conspiracy he seems to think. I have never given him much credit for brains. I also don't think that he is really a conservative after thirty years of broadcasting in Rock and Roll stations.
I think he is trying to slowly turn the conservative movement back around to liberalism.
Especialy after yesterdays rant on his show.

Mr. Williams.
Here's the explanation of why gas shot up to $4.99.9 a gallon in Knoxville. If you can follow it.

The normal flow of oil is done on a contract basis. There are definite supply times and ammounts contracted for (in the futures market at auction) and with the pipeline companies for delivery times and dates. There are those like Pilot oil that go outside this normal route on the "spot" market (at auction) so they can keep their price lower than the rest in a normal market.

During an interruption of the market like a hurricane and under duress like a panic buying spree this is turned haywire by several factors.
First the supply is interrupted and delivery times are not on schedule.
Second the panic buying makes the supply on hand in the tanks at gas stations dissappear quicker. This makes the normal delivered price moot because the contracted for supply has been sold.
Now there are more bidders for the gas on the spot market (at auction) that companies like Pilot Oil usually bid for. Thus spiking the price. Because we all know what happens at an auction where there are a lot of wealthy bidders....don't we Mr. Williams?

This is why the price goes sky high at the inner city (and isolated) independent stations like Pilot Oil and Weigels first. Because they were already getting hammered by the disrupted schedule on the spot market trying to outbid each other to get some gas for their customers.

If this isn't enough to tell you what happened when your radio station started a panic then you need glasses....... and an education that I can't give you.

No comments:

Boxer owned for Racism

An inconvenient debt.