6 ms·

I'm not sure that any of that actually matters. Wars are not Call of Duty. It's politically difficult to invest actual manpower in Iran and Unless China were to

I'm not sure that any of that actually matters. Wars are not Call of Duty. It's politically difficult to invest actual manpower in Iran and Unless China were to nuke Hawaii, an all out war with China would also immediately be politically unpopular. China, like Iran, wouldn't doesn't need to defeat the US, they just need to hold out long enough for the US economy to collapse, which would happen way faster if China is the opposition. The only reason we don't have $6 gas right now is because of a ton of financially engineering. I don't know how anyone could convince the American public that $10 gas and war time rations is worth defending Taiwan.

tintor 1mo ago
> The only reason we don't have $6 gas right now ... I see you are not in California.
- FuriouslyAdrift 1mo ago
  California has both very high taxes on gas and a custom formulation that is only used in California... which is just about the most Californian thing I can think of.
  - hollerith 1mo ago
    The atmosphere of coastal California (i.e., where most Californians live) has about one tenth the capacity to dilute pollutants as the atmosphere of most of the rest of the US (because inversions are common especially in the summer). Air quality in coastal Southern California was awful back when California used the same gas the rest of the country did.
_heimdall 1mo ago
I'm curious what the financial engineering you're referring to was. I've been trying to understand why gas is still comparatively cheap given the war and the best I've landed on so far is that the spread between feedstock (crude oil) and output (diesel, gas, jet fuel, etc) widened in large part die to flooding the market with strategic oil reserves. We keep crude prices low, which is what many indicators track, while we couldn't keep final product prices low as easily because we can't quickly increase refinery capacity. How did they financially suppress fuel prices?
- 0cf8612b2e1e 1mo ago
  China stopped buying 5.5 million barrels of oil per day (quarter of what was carried in the Strait). Huge reduction that has slowed down the catastrophe by months.
- thelastgallon 1mo ago
  China stopped buying: https://www.youtube.com/watch?v=ehoMxfJxTw8 https://www.youtube.com/watch?v=ehoMxfJxTw8 With the reduction in demand, prices didn't skyrocket. This is what OPEC does (cut supply to increase prices), but on the demand side.
- pandaman 1mo ago
  >How did they financially suppress fuel prices? If you google for the "oil price today" you will find something like $75. However, if you look closely, it's the price of oil futures for September. Futures are not oil, they are contracts. If you need to buy oil in September and you expect the price to be higher than $75 you can buy such a contract and guarantee your price to be $75 now. However, you can also buy such a contract even if you don't need to buy oil ever, hoping its price will go up and you can sell it at profit (you can also do it on margin i.e. only put enough money to cover daily price change). And a whole lot of people do exactly this (likewise, they also can sell these contracts even though they don't have a drop of oil to sell). Normally, the large volume of these speculative contracts cancel each other before the expiration date and no oil changes hands. However, because most of these traders don't have oil or the ability to take delivery on oil, a "squeeze" is possible. Say, you bought $75 oil futures for September today, hoping to sell them at premium sometime before today and the last trading day at the end of August. As that day approaches you see that the price is still $75 or even lower. Oil spot price (the actual price) can be anything (it was about $100 last week), maybe $100, maybe $200 but nobody is buying futures at this price, because someone is selling them at $68. If you had a refinery with storage to take few thousand barrels, you'd be happy as you got a great deal on oil. However, if you are just a dude at a computer in a NYC apartment, you are now in big trouble - you have to pay $75K for each contract you hold and take delivery on 1000 barrels of oil. Either or both might be impossible for you so, instead, you just sell yours at $67.99 and take $7K loss on each contract, which 10x less money than you'd have to pay for the oil you can't take delivery on. This is a "long squeeze", as more people find themselves in such a situation they sell at lower and lower price causing the futures price to tank even more. Someone causing a long squeeze is, obviously, taking a loss as some legitimate buyers will buy the cheap futures and take delivery but because of the sheer volume of the speculators, a long squeeze is not nearly as expensive as a direct undercutting the spot price and can be maintained for a long time with relatively small capital.
hollerith 1mo ago
I understand why war with Iran would raise gas prices, but why would war with China?
- _heimdall 1mo ago
  I'd assume any war between large militaries would.

tintor 1mo ago

> The only reason we don't have $6 gas right now ... I see you are not in California.

FuriouslyAdrift 1mo ago
California has both very high taxes on gas and a custom formulation that is only used in California... which is just about the most Californian thing I can think of.
- hollerith 1mo ago
  The atmosphere of coastal California (i.e., where most Californians live) has about one tenth the capacity to dilute pollutants as the atmosphere of most of the rest of the US (because inversions are common especially in the summer). Air quality in coastal Southern California was awful back when California used the same gas the rest of the country did.

_heimdall 1mo ago

I'm curious what the financial engineering you're referring to was. I've been trying to understand why gas is still comparatively cheap given the war and the best I've landed on so far is that the spread between feedstock (crude oil) and output (diesel, gas, jet fuel, etc) widened in large part die to flooding the market with strategic oil reserves. We keep crude prices low, which is what many indicators track, while we couldn't keep final product prices low as easily because we can't quickly increase refinery capacity. How did they financially suppress fuel prices?

0cf8612b2e1e 1mo ago
China stopped buying 5.5 million barrels of oil per day (quarter of what was carried in the Strait). Huge reduction that has slowed down the catastrophe by months.
thelastgallon 1mo ago
China stopped buying: https://www.youtube.com/watch?v=ehoMxfJxTw8 https://www.youtube.com/watch?v=ehoMxfJxTw8 With the reduction in demand, prices didn't skyrocket. This is what OPEC does (cut supply to increase prices), but on the demand side.
pandaman 1mo ago
>How did they financially suppress fuel prices? If you google for the "oil price today" you will find something like $75. However, if you look closely, it's the price of oil futures for September. Futures are not oil, they are contracts. If you need to buy oil in September and you expect the price to be higher than $75 you can buy such a contract and guarantee your price to be $75 now. However, you can also buy such a contract even if you don't need to buy oil ever, hoping its price will go up and you can sell it at profit (you can also do it on margin i.e. only put enough money to cover daily price change). And a whole lot of people do exactly this (likewise, they also can sell these contracts even though they don't have a drop of oil to sell). Normally, the large volume of these speculative contracts cancel each other before the expiration date and no oil changes hands. However, because most of these traders don't have oil or the ability to take delivery on oil, a "squeeze" is possible. Say, you bought $75 oil futures for September today, hoping to sell them at premium sometime before today and the last trading day at the end of August. As that day approaches you see that the price is still $75 or even lower. Oil spot price (the actual price) can be anything (it was about $100 last week), maybe $100, maybe $200 but nobody is buying futures at this price, because someone is selling them at $68. If you had a refinery with storage to take few thousand barrels, you'd be happy as you got a great deal on oil. However, if you are just a dude at a computer in a NYC apartment, you are now in big trouble - you have to pay $75K for each contract you hold and take delivery on 1000 barrels of oil. Either or both might be impossible for you so, instead, you just sell yours at $67.99 and take $7K loss on each contract, which 10x less money than you'd have to pay for the oil you can't take delivery on. This is a "long squeeze", as more people find themselves in such a situation they sell at lower and lower price causing the futures price to tank even more. Someone causing a long squeeze is, obviously, taking a loss as some legitimate buyers will buy the cheap futures and take delivery but because of the sheer volume of the speculators, a long squeeze is not nearly as expensive as a direct undercutting the spot price and can be maintained for a long time with relatively small capital.

hollerith 1mo ago

I understand why war with Iran would raise gas prices, but why would war with China?

_heimdall 1mo ago
I'd assume any war between large militaries would.