US energy chief says 'speculators' not forcing up oil prices (Pelosi, where's the lower gas prices?)

afp ^ | 6/21/2008 | AFP

[Ken522]

I bet Sam Bodman gets in trouble for this ....

[rabscuttle385]

"In the absence of any additional crude supply, for every one percent increase in demand we would expect a 20 percent increase in price in order to balance the market," he said.
"Prices respond when surplus capacity is low, particularly when geopolitical turmoil or events such as hurricanes, threaten supply."

The Pelosi Premium at work?

[Kolokotronis]

“US Energy Secretary Samuel Bodman said on Saturday that speculators were not forcing up global oil prices, which nearly hit 140 dollars per barrel this week.”

Gee, if they were, and they got exposed, how long would it take for the administration to bail them out lest the “free market” in oil dry up? /s

Why am I not surprised to hear this from a functionary of the Administration which used our money to guarantee the bailout of its Bear Stearns buddies? Its almost like the Administration is bound and determined to make sure the Republican Party is finished with the overwhelming majority of the American people.

[AndyJackson]

Of course he takes this position. With an administration that has been bought and paid for by ADM to support biofuels, and a Treasury Secretary that was former chief of Goldman Sachs, who is at the center of the commodities index trading bonanza, what position do you think he is going to take.

Here is Bodman's take: Secretary Bodman and Agriculture Secretary Schafer letter on biofuels

[AndyJackson]

Why am I not surprised to hear this from a functionary of the Administration which used our money to guarantee the bailout of its Bear Stearns buddies?

And former investment banker and head of Fidelity investment. He wouldn't be the least bit interested in whether or not we bail out his wall street friends, now would he?

[kingu]

It is clear that financial markets have seen unprecedented movement of capital into commodities in recent years. Our view is that this capital is following the market upward, it is not leading that movement.

So the claim is that it's just floating the high prices, not causing them. Oh, thank you, I feel so much better knowing that there's no bottom to the market now...

[Sprite518]

LOL! This guy is a freaking moron if he is trying to pretend the speculators have NOTHING to do with the gas prices..

[AndyJackson]

for every one percent increase in demand we would expect a 20 percent increase in price in order to balance the market

Wow. Sounds like a speculators bonanza. It does not take many orders to cause a 3% increase in demand, i.e. 60% increase in price, using his claim.

[Shermy]

This is hilarious.

“There is no evidence that we can find that speculators are driving futures prices,”

That’s right, he’s trying to deny “speculators” have nothing to do with “futures.”

“It is clear that financial markets have seen unprecedented movement of capital into commodities in recent years.”

So he admits it. How does he get out of this wrangle...

“Our view is that this capital is following the market upward, it is not leading that movement.”

LOL. As if speculation doesn’t feed that movement. And it is many commodity futures, not just oil.

Maybe he’s telling these bad lies here because he thinks he can confuse the Saudis in his upcoming visit.

[AndyJackson]

Our view is that this capital is following the market upward, it is not leading that movement

It is like a bad joke. Q. Now why would speculators manipulate the oil markets? A. To make money.

I mean, hello, dude!

[Founding Father]

Anyone remember Nelson Bunker Hunt? Quintuple the margin requirements and oil drops $40 in less than a week.

[Ken522]

I don’t think he’s ever heard of “..tulipmania.”

[AndyJackson]

How does he get out of this wrangle..

Through Greenspanian double talk. After all it worked for him, until it didn't, and he got blamed for the subprime mortgage mess.

[alloysteel]

Some people are utterly surprised that the law of supply and demand, and the price as a measure of effectiveness of the application of that law, worked every time it has ever been tried.

It is working right now, which assures that supply and demand are synchronized closely. It will work in the future.

Attempting to adjust supply and demand, by either lowering the price (through subsidy or just by dictating the price) has the effect of disrupting the supply, or possibly creation of a black market that permits the delivery of the goods or services by extralegal means, or attempting to artificially restrict either supply or demand, only skews the price. The restricted product or service will be bid up in price, until the number of buyers equals the number of sellers. The remainder, who cannot or will not pay the price demanded, just drop out of the market.

Result, overall commerce disappears, and the multiplier effect of one transaction triggering a number of other transactions, also disappears, and the business cycle collapses.

[OKIEDOC]

BULLAVA SHIITE

[allmost]

I don’t think he’s ever heard of “..tulipmania.”

:)

[Toddsterpatriot]

Why am I not surprised to hear this from a functionary of the Administration which used our money to guarantee the bailout of its Bear Stearns buddies?

Your money bailed out Bear Stearns? How do you figure?

[mysterio]

When the product is an essential monopoly good with inelastic demand, the sky is the limit when it comes to prices.

Give oil a competitor or pay the premium price they demand indefinitely.

[mysterio]

Tulips are not an essential monopoly good with inelastic demand.