Posted on 06/23/2008 10:40:07 AM PDT by Sub-Driver
Gas could fall to $2 if Congress acts, analysts say Limiting speculation would push prices to fundamental level, lawmakers told
By Rex Nutting & Michael Kitchen, MarketWatch Last update: 1:14 p.m. EDT June 23, 2008
WASHINGTON (MarketWatch) -- The price of retail gasoline would fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy futures markets, four energy analysts told Congress on Monday. Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said the price of crude oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.
Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.
Krapels said it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.
"Energy speculation has become a growth industry and it is time for the government to intervene," said Rep. John Dingell, D-Mich., chairman of the full committee. "We need to consider a full range of options to counter this rapacious speculation."
(Excerpt) Read more at marketwatch.com ...
Isn’t this article speculation?
But like I said, that's just speculation.
I’m going to hazard a guess that there are at least four energy analysts out there today with significant short positions in the oil futures market.
The Enron loophole is going to continue on...until half of the senate and congress are fired....my humble opinion. The amount of speculation going on...is beyond reasonable. When pension funds are going into this line of investment....which is normally very risky...something is wrong. Ask yourself how you’d feel if you found out your fund had placed 5 percent of its total power behind energy futures, and suddenly lost that. Old folks don’t ever get into such a risky type venture...and yet here they are.
Danged if you aren’t right. The word “could” gives it away.
Egregious nonsense. And nonsense “more egregious” is hard to imagine.
Ummm...someone explain how this would work, please. Speculators are just big time gamblers, right? They can win (like SW Airlines) or lose big. How is more gubernment control going to make the price go down, and who takes the loss that the price control will impose? My 401k?
speculation is a problem, but HALF.......no.
More like $3 a gallon, not $2.
Boy, it’s not often you can hold an economist’s feet to the fire and see if their predictions are correct in 30 days.
Do it and see how good their forecasting really is....:^)
But I am sure that even if gas prices drop, we are still vulnerable to foreign oil blackmail. I think all the reaction you are seeing is a desperate attempt by some to stop us from developing our own resources.
And think how dumb Americans are, if the price drops they will forget all about foreign dependency, and be unprepared for the next crisis.
they will drive it overseas..........
And then drilling will slow, and 5 years from now we will be even worse off.
Those four analysts are full of Barbara Streisand.
The speculators are speculating that there will not be enough oil in the future, which is why the announcement by the Saudis has had no real affect. The way to ensure that there is a supply in the future to meet future demand is for Congress to get off its brains and drill, drill, drill, and the drill some more. When speculators see that they are serious, the market will correct what needs to be corrected....but that’s just my speculation.
Wait, this has happened before? /sarc
As a matter of fact, if they’ll go short on the contracts before this is implemented with their own money I might even believe two words they say.
I bet if the President and Congress made serious efforts at attacking our oil resources, we could see sub-$90 a barrel oil real quick. The bubble would pop in less than a week. May not be $2 gas, but certainly under $3. But it won't happen. Democrats hate prosperity and are privately thrilled with the prospects of $5 gas.
speculation is what keeps the market efficient. There is a reason for the speculation: nobody knows what the Federal reserve is going to do and nobody knows what liberals will do to screw up the economy.
The government is always three steps behind the times.
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