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Originally Posted by ADL Colin
Right. They had to write down the value of their assets. Those asset price changes are real in that they are oil and gas - which are now worth considerably less than they were. Directly in that the value of the natural gas purchased in the Burlington deal is now worth less than it was and indirectly in that their 20% ownership of Lukoil is now worth less; which is partly attributable to the fall in energy prices. And ok, give some credit to the Russian stock market and equities in general there too.
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Wrong they are not the oil and gas assets, they are buildings, and refinerys, and contracts on futures of oil that they bought to push the price of oil up to make more on selling oil. ETc.
Quote:
Originally Posted by ADL Colin
The conspiracy theories out there would have led you to believe companies like Conoco, Exxon and BP were able to push prices up over $140/barrel in order to create the profits of the past few years.
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Its not a conspiracy theory go look up the transaction records of futures purchased by the three companies.
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Originally Posted by ADL Colin
The truth is those companies reserves are dwarved by the size of the big nationals; Saudi Aramco, National Iranian, Qatar General Petro, Kuwait Petro and so on.
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Reserves have nothing to do with increasing the price of oil thru speculation and futures.
Quote:
Originally Posted by ADL Colin
Even in that case there was so much speculative money in futures it is not clear to what degree even they can control prices. Though certainly a lot more Exxon, BP and Conoco can.
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The last point this is how the price of oil is determined by futures and estimates of demand, the three companies involved and some very large hedge funds as well as opec providors pushed the price of oil up to reap rewards on short term futures market as well as to increase revenue quickly with refinery and wholesale price increases, its simple business.