Isn’t it interesting how nobody is to blame for high gas prices but gas prices continue to climb out of sight? Maybe all that money consumers are paying is just an illusion, and we’ll wake up soon and find out that we each have several thousand dollars we thought was gone.
However, you are still right!!!! the underlying problem is that congress has de-commoditized oil by making it scarce. If Clinton had signed ANWAR and the US was 2 years into the continental shelf, do you think any speculator that was not clinically insane would take possession of oil in the hopes of dumping it later for a profit? HELL NO!
If you want to put the index speculators out of business, make oil a commodity AGAIN!!!!! In a way these guys have actually helped US.... Instead of gas creeping to $4.00 a gallon as the liberals wanted, it accelerated to $4.00. Hopefully this will wake up the American people to understand that drilling has to be a part of any energy plan.
Does anyone else find it interesting that, with the exception of areas affected by Hurricane damage, no fueling stations in the U.S. has suffered from a lack of fuel and had to close their doors, despite all the claims that demand cannot keep pace with supply?
Congress has no idea how futures (or any other) markets work. They trot out the oil execs and badger them, hoping the blame will stick. The talk about windfall profits taxes so all the stupid people in the world will say: "Yeah, that'll fix 'em!" Idiots!
When that didn't work, they trot out speculators and badger them, talking about nine bills to regulate those markets. This is even more stupid because there's nothing to prevent oil speculators from operating in markets where the US gov't has no say whatsoever.
The fact is, Congress and its No Drill policy is where the blame belongs, but as long as Congress has someone or something to drag out and distract all the stupid people, they will continue to do so.
Congress wants to do nothing that will lower fuel prices until after the election. Never mind that two years ago Pelosi promised to lower fuel prices, which were $2.50/gallon then. Congress will not open ANWR, the OCS, or federal lands because they know that just announcing that drilling would be permitted would send the pump price falling and that might just be a good thing for consumers. And whats good for consumers--at least in Democrat eyes--is not good for the Democrat party.
Congress can ease the pressure on oil price tomorrow by simply opening up ANWR, the OCS, and federal lands, but they won't. They put themselves before everyone and everything else, especially those who they are supposed to serve. If I didn't need the oil so badly, I'd tar and feather the lot tomorrow!
Communists.
Still doing their best to sabotage free economies.
fl
Congress critters may or may not understand the market. They are not going to accept the blame they deserve either way. Putting on a show blaming others is a Congressional specialty.
And please explain to me how mucking up futures trading here in the U.S.A. will affect all the other world wide futures traders and thus have an impact on the global price of energy you idiots?
bump
Good article!
Congress is to blame!
Drill! drill! Drill!
It is very apparent now that the Democrats are trying to drive down the economy before we have an election by not allowing drilling off shore and ANWR. The press is going along with it and about half of the people who normally vote Democrat. Just when you thought the Democrats in congress couldn’t stupe any lower they always come through. I just wish the everyday working folks could really see what the Democrats are doing to them.
If ANYONE does not understand how the markets work, then this guy is the one.
There are THREE kinds of traders in the futures market.
Those who hedge, those who speculate on a small scale and those who speculate on a BIG scale.
The Biggest holders of contracts are the hedgers — sellers and buyers of actual OIL, who usually balance out each other (within 10%). They account for about 95% of the contracts HELD.
HOWEVER, they mostly buy/sell their contracts at the beginning and hold until expiration and give/take delivery.
The BIGGEST increase in money traded each day are the BIG speculators — who until Clinton took off the collars (two weeks before Robert Rubin when back to wall street) — had limits on what they could buy and sell. Now they are unfettered. That has increased the money on the speculative side from about $17 Billion in 2000 to well over $300 Billion now.
If you include the commercial hedgers, the CFTC is right, with ALL contracts (those held for the duration and those ACTIVELY TRADED) those short and those long balance themselves — but those ACTIVE in the market every day — the BIG speculators — are nearly 2-1 LONG.
The BIG speculators comprise about 3% of the market — but create about 75%-80% of the volume of trades per day — what causes the price to move. These specs are just really trading paper -- NOT OIL -- and they keep the market high in quiet markets when a realively small amount of buy orders will push the market and take profits (sell to offset their longs) during panic buying, like yesterday and today.
Recently Pension funds, oil mutual funds, and oil ETFs have increase hugely their activity in the markets, as well and they make money ONLY on the long side. There are no inverse oil funds yet, so there is also a newly increased upward (price) bias in the oil futures market.
If sepculation is not the reason then Lybia comments would not have made the price go up.
The dollar remained unchanged.
Lybia saying it would alter demand sent the prices up.
Energy is not traded on a free market basis.
Our central control of energy supply would make Karl Marx proud.
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