Posted on 12/08/2010 9:43:48 PM PST by ChicagoConservative27
The place I fill up my VW TDI and truck jumped diesel from $3.11 to $3.35 overnight!
WTH!!!!
How can we forget that is what set off the Housing Collapse
A voice of reason and insight - good post. If oil “traders” had to have some type of business that could take possesion of the oil then there would be true “futures” market. These traders are buying among themselves because there is so little in other markets that they can spike, take profits and make themselves rich.
There are two majer reasons why oil prices are spiking. One is monetary (the Fed printing money) and the other is fundamental (global oil consumption is on the rise even though the US, Japan and Europe are struggling economically). Many of the world’s oil producers stopped investing in oil drilling/exploration when the economy ebbed in 2008/2009 so oil production is not reday to rise at a very fast rate. Thus, I expect oil prices to continue to have upward pressure for quite a few years.
This is why you don’t get your financial/economic tips from Miami-Herald writers: demand is rising (an imminent cold winter will use more heating fuel) and supply has been curtailed in the form of year-end low inventories and Obama’s latest drilling ban. Add in QE2 and the tax break extensions, and there’s your rise in oil price. Speculators are canaries in the coal mine; they try to anticipate changes before they happen. The extra homework they do alerts us to future gluts and shortages. They do affect the price slightly, but not to the extent the media likes to accuse them of. Think back to the 80’s and $8/bl oil. They didn’t have the ability to make it $20/bl just to screw us all.
Now it's Bush's Big Oil buddies trying to make O look bad.
Regular is 2.89 here, in Houston.
Part of the reason for this is quantitative easing, AKA printing money. They are devaluing the dollar, which makes commodities more expensive in dollars.
Exactly right. Supply and demand. If there are more dollars in the marketplace, they will be worth less in terms of real goods.
The problem is that last time this happened, it triggered an economic collapse. There is more elasticity on demand for oil than had been predicted.
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