>SNIP
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>>You are not correct here Jim. Oil markets, like all commodities, are driven by future expectations, not so much by what is currently available. The hurricane hit in what I understand was a major oil refining area, hence this would/could affect possible future refining output.
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>Then why is it that the price went up RIGHT AWAY????? As I've always understood the futures market, you place an order today at a price you believe will make you money WHEN THAT DATE COMES.

Basically the market is driven by buyers and sellers, or the current owners and those who wish to become owners. As soon as any event occurs that can impact the future supply the current "owners" of that thing are going to exploit that event by increasing (or decreasing) the price at which they are prepared to sell it to you. This is an almost instant occurance in a free market system and completely natural. In the futures market in particular this is extremely volatile due to the liquidity and high gearing that one can trade on.

The OPEC will announce increases or decreases in production of crude oil. As soon as that news is out traders will be forming opinions about what those changes in production will mean in the near and far future and will trade acccordingly. This can happen within minutes of news being released.


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>>Oil companies and OPEC do not dictate the price of oil. They dictate the supply of it. The price is set in free markets by traders (and others) betting on what they believe the future supply and demand conditions will be like.
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>Well I understand that the base price is set at the New York Mercantile Exchange.

Actually base prices are not set like that. Traders bid and offer at prices they think they can buy or sell what they have. Its that simple. If people believe there will be less of something in the future then those who own the thing in question will ask for more money and those who want to own the thing will be prepared to bid higher prices to get it.


>I have a real hard time believing that the folks who do the price setting have no relationship whatsoever to the OIL COMPANIES. The oil companies are now very few in the U.S.. Other businesses have bribed important factors of their businesses in the past, and I just cannot see the U.S. oil companies resisting that temptation. Far too easy and far far far too profitable to ignore.

Well I am sure that the companies, people, and indeed governments of countries that are in the oil business, whether as producer or consumer, will be playing the markets to hedge their bets or otherwise profit from the oil markets. Whether there is corruption as well is another question entirely but in almost any endeavour where humans are involved there is invariable corruption so that should not come as a surprise.