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Totally 100% BS. A completely ignorant response driven by the authors political agenda that has no base in any factual reality. There is not one statement of fact in this whole article. The author merely states his emotion based opinions as if they were fact. Notice all his sources are anonymous? That is because no reputable person who actually has a professional background in these field would say such such ignorant crap.

It a simple issue of supply and demand. When you constrict supply at the same time demand is growing you get a price spike

No evil capitalists out to get you, just simple Economics that could be solved by the USA producing more of it own energy instead of buying on the International Market

I’ll have to say I agree with you all for the most part. Make your money where you can, when you can.

Conspiracies about speculation aside, the oil market does have some feel of a bubble to it if only because there are artificial government restrictions on domestic production. Governments change and so can policies rather quickly. As the world economy slows and world inflation rockets, that demand for oil can evaporate quickly just about the same time extra production hits the market. If you are heavily invested in the oil production sector as I am, that nagging feeling of a bubble is in the back of your mind.

When (or if) it really is a bubble and it finally bursts, it will be the second large hit to the world wide economy shortly after real estate and it won’t be pretty.

On the other hand everything might come up roses...no worries, right?

You and I will have to debate that sometime, m'friend. There is precisely no doubt that demand for ''paper oil'', i.e. futures & swaps held and kept outside the world of physical oil, has pushed and is pushing the energy mkts well above straight S/D value.

As to ''no reputable person who actually has a professional background in these field(sic)...''

No offense, but you're quite wrong in this sentiment. I've 30+ years in crude and energy-related mkmts and businesses, and I say exactly that, exactly what Engdahl says -- the only question is ''how much has the price been driven out of whack by the big specs?''. I'd say, depending upon one's assumptions, anywhere between $40 and $70/bbl.

I suggest you consult with thackney, Eric in the Ozarks, Smokin' Joe, and our other FReeper colleagues who work daily in the ''awl bidness''. I believe you will find that they -- all of them, to a man -- also consider that one heck of a chunk of crude's current price is not due to ordinary physical S/D conditions. (And apologies, gents, if I've misspoken about any of your views!)

FReegards!

Yes there is.

It a simple issue of supply and demand. When you constrict supply at the same time demand is growing you get a price spike

Except that inventories are up and demand is down.

"In the U.S. alone, stockpiles of oil climbed by 11.9 million barrels in the month preceding the Energy Information Agency's (EIA) May 7 inventory report [an 8-year high]; they were up by nearly 33 million barrels since Jan. 1. At the same time, MasterCard's (MA) May 7 gasoline report showed that gas demand has fallen by 5.8%, while the government suggested that gasoline consumption might have fallen by slightly over 6%."

The other aspect, aside from the S/D part of the price is as such: Inflation accounts for a lot of the runup in price (notice where the two are plotted together, oil and gold track similarly), and I would expect there is some specualtion in both markets. However, speculators only invest in commodities they think they will be able to profit from, and that means there has to be a reason for the price to climb long before the specualtors will get in on it.

I think if the oil market were closed to speculators tomorrow, there would only be a $10-20 drop in the price, initially, no way it would drop 60%. Wishful thinking on someone's part, anticapitalist nonsense at worst.

Others here could give a better idea what the results of closing the futures market would ultimately be, however, as spot price scrambles for refinery feedstocks would cause wild fluctuations in the price of crude and refined products, especially in a high-demand market.

Ultimately, the consumer would likely suffer far more.

If someone thinks specualtors are making that much, they are free to invest in such a way that they can take advantage of those profits, too.

"When you constrict supply at the same time demand is growing you get a price spike"

When you constrict supply a bit and increase demand a bit then you git a bit of a price spike. If you get a large price spike then someone is taking advantage of the "free market" system.

I suppose you still think that 25-50% yearly increases in home prices from 2000 - 2005 was justified because population was increasing slightly and houses were a bit more difficult to build with slightly more regulations.