Posted on 03/11/2012 1:56:05 AM PST by Bobbys1963
With regular gas prices topping $3.70 last weekend, angry politicians are blaming the higher prices on speculators and greedy oil companies. On Monday, The Hill newspaper reported that 23 senators and 45 congressmen, all Democrats except for one independent, called for urgent action against the "speculators" they hold responsible. Sen. Bob Casey of Pennsylvania demanded, "Consumers shouldn't be forced to pay higher prices at the pump because of speculative bets on Wall Street."
These politicians want the Commodity Futures Trading Commission to use its new regulatory powers under a law signed by President Obama two years ago to limit the amount of oil that speculators can buy.
This isn't a new concern. Last April, when regular gas prices hit $4 a gallon, the president launched a Department of Justice investigation into what he called "manipulation in the oil markets that might affect gas prices."
Unfortunately, neither the Democrats in Congress nor Obama appear to have a clue how markets work. The policy reminds one of Richard Nixon's attacks on speculators during the 1970s. . . .
(Excerpt) Read more at philly.com ...
Same old crap. They do this every time prices start to climb inordinately at the pump. The question they ought to be asking themselves is this: will consumers be angrier having gas at $3.70 per gallon, or no gas at $3.00 per gallon?
This is posted by an oil man “thackney” just a few days ago:
Too many people believe that supply and demand versus price means they move equally and linearly.
A small move in demand nearly equaling the total available supply will create a skyrocket in demand, of any product that doesnt have much elasticity in demand.
The spot market is a market for actual users of the the oil. It is not a market for speculators unless they have storage capacity and see a significant contango. Even then, it is quite limited before storage capacity runs out or becomes too expensive.
Given that the spot market is not a speculators market, and that the spot market nearly always matches the near month futures market, I do not see how the claim of price driven by speculators and not real supply/demand holds any water.
As usual, the effin politicians jump all over the “speculators” when gas prices increase. In fact, they themselves are chief among many factors which lead to higher prices: they block oil drilling and they print obscene amounts of fiat currency, debasing the dollar, thus causing prices to rise.
I hate lying, thieving politicians.
That is a very good point, FRiend.
There's your reasons. Kings and politicians have always blamed speculators for the results of their economic meddling.
this is another example of why Grover Norquist is not on the side of “conservatives” like those of us at Free Republic. He takes money form the Specualtors, from Arab J ST folks and tells US that we don’t understand the way the world works.
Ed Wallace, a radio car guy in DFW and a writer for BusinessWeek, has been making the same arguement with heavy details about weekly supply and use by users - people from many places call to tell him he is correct AND so are you. The amount of oil in stock, the amount of gasoline in stock is higher than when Clinton was president and gasoline was 99 cents a galllon. The draw down each week is terrible....people are out of work, but specualtors are drving the price up up up. /
The SEC is often asleep or compromised or otherwise unable to act even when illegal price manipulations are apparent. In addition to the SEC's weaknesses in personnel and vigilance, oil and most other major commodity markets are world wide and no longer dominated by US producers and customers.
The US commodity market regulatory regime thus does not and cannot extend to foreign state run companies and cannot effectively police them or foreign cartels, hedge funds, and syndicates. In effect, the people who are often to blame for commodity price manipulations are commonly beyond the reach of US law.
In some instances, as with the DeBeers diamond cartel, the company's principals and representatives avoid travel to the US for fear of getting arrested or at least subpoenaed. And some countries like Switzerland and Dubai are notorious as havens for commodity manipulators.
Nevertheless, in the long run, no one is beyond the reach of the laws of economics. The development of US oil and gas reserves, cheap substitute fuels like methanol, and wider exploration at home and abroad will help to keep fuel prices lower and more stable than they would otherwise be. Shale oil and gas are especially important in the near and medium term, with new nuclear energy sources and reactor designs being essential in coming decades.
“I hate lying, thieving politicians.”
Roger That!!! But you forgot self serving. We are no longer a Nation of “by the people for the people” its by the “politician for the politician”. They are not all bad its just that 98% SH!ts make the other 2 % look bad...
It's as simple as that, folks. We are $15 trillion in debt, and our money doesn't have the purchasing power it once did.
Yep - they demonize the speculators with no sense of the whole picture. While they earn a buck, they also open up to the possibility of losing a buck and smooth out the spikes and dips. Obama said he just wished the price had been slower and smoother - his policies made it move quicker, but the speculators kept it smoother - he ought to express gratitude.....
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"
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