OT - Grumpy Old Man Thread

[847badgerfan]

Canada Dominates Foreign Supply

Canada is by far the single largest source of imported crude oil, supplying nearly 60% of all U.S. crude imports. In 2024, Canadian imports averaged about 4 million barrels per day. Combined with Mexico, these two neighbors accounted for more than 71% of all crude oil entering the country.

After Canada and Mexico, the remaining top suppliers are Brazil, Colombia, and Iraq, each sending roughly 200,000 barrels per day or less. Saudi Arabia, once a dominant supplier, now accounts for a much smaller slice. The overall trend has been a sharp shift away from Middle Eastern oil toward Western Hemisphere sources over the past two decades.

OPEC nations collectively supply a shrinking share of U.S. imports. In 2022, Saudi Arabia and Iraq together made up about 11% of total petroleum imports. Canada alone, at 52%, dwarfs the entire OPEC contribution.

[MikeDeTiger]

If we got no oil from the middle east and prices spiked, that'd be gouging, I guess.  As long as we rely on some percentage and are considered any part of their market, I don't see how rising prices can be avoided, without artificial interference, which usually doesn't work out how anyone intended. 

Actually, I am dead wrong on that.  Not sure what I was thinking there.    

If you're a supplying country and the global supply diminishes, the prices are going up in a free market.  Doesn't matter where we buy our supply.  Finito, end of story.  

I'd also remind that free-market equilibrium is not a quick, calculated thing.  It's a messy friction that often takes time to settle.  So it doesn't necessarily have to be gouging for prices to temporarily rise beyond whatever the true equilibrium price point is.  

[betarhoalphadelta]

You had the important part right, Mike. 

Oil is a global commodity. Prices are determined by supply and demand. It's not like one oil company just decides to "raise prices"--oil is traded as part of a commodities contract market. Like a lot of things, prices are not really "set", they're more "discovered". A commodities futures market is actually a pretty highly efficient engine for price discovery. 

You'd think Badge would know this, considering the first large and organized commodities market in the US was the...

Chicago Board of Trade (CBOT). 

[847badgerfan]

Commodities can and have long been manipulated.

[betarhoalphadelta]

If they're so easily manipulated, why don't prices just stay high all the time? 

[MikeDeTiger]

If they're so easily manipulated, why don't prices just stay high all the time?

From what I know from my foray into day-trading, manipulating commodities is often not so much nefarious as it is the inevitable physics of markets.  For example, say Goldman-Sachs has a bunch of major players as clients who see decline, they want out, so GS drops a massive short order....well, it's kind of a self-fulfilling prophecy.  When that much volume sells, they actually cause the market to go down.  

It's technically illegal to manipulate the market like that, but in reality it happens every day.  The major brokers can't help but manipulate the market.  It's just the nature of the beast.  Those kinds of things, while manipulating the market, are temporary and won't have a lot to say about the long-term overall direction of the market.  If there are other, nefarious, long-term, more massive scale manipulations, I don't know about them.  

Now, there's also running stops, which they absolutely also do.  This is pure asshole behavior and manipulation for the sake of crapping on the little guys, because they can.  This also has little to no bearing on the overall market.  It just wipes out 95% of the people who try to swim in that ocean with such massive sharks.  

[847badgerfan]

If they're so easily manipulated, why don't prices just stay high all the time?

Because there is money to be made when prices are low too.

[betarhoalphadelta]

I dunno, this seems like a lot of handwaving to blame literally anything but a major supply shock, that we actually know is happening, for causing the rise in oil prices. 

[847badgerfan]

It's not a major supply shock. I'm told there is plenty of oil in the chain and that other countries have stepped up.

Another one of my friends is the Chief Engineer and Master Captain on an oil tanker. Two months on, two months off.

He's on duty now.

His normal route is Houston to Fort Lauderdale and back.

Guess what?

His ship is currently in Vera Cruz.

Care to guess why?

[Gigem]

I understand that, but I'm still not buying that gas should be anywhere near $4, let alone $7. It's gouging.

As a (former) business owner, you should know better.  Nobody likes it, but last quarter the Oil Co's were not hardly even making any money.  It takes big bucks to be in the oil/refining business.  Gas was really nice and cheap a few months ago (here), so you got to take the downs with the ups.  

[847badgerfan]

Huh?

[Gigem]

Huh?

What? 

[847badgerfan]

Yes.

[utee94]

Eh?