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Obama to pitch $52M plan to regulate oil markets
FOX News ^ | April 17, 2012

Posted on 04/17/2012 5:32:47 AM PDT by Oldeconomybuyer

WASHINGTON – Under pressure to take action on rising gasoline prices, President Obama wants Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions.

The White House plan, which Obama was to unveil Tuesday, is more likely to draw sharp election-year distinctions with Republicans than have an immediate effect on prices at the pump. The measures seek to boost spending for Wall Street enforcement at a time when congressional Republicans are seeking to limit the reach of federal financial regulations.

Obama plans to spell out his $52 million proposal Tuesday at the White House, where he will be joined by Attorney General Eric Holder.

(Excerpt) Read more at foxnews.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events; Politics/Elections
KEYWORDS: energy; fuel; oil; regulations; socialism
Tax, spend, regulate. Repeat.
1 posted on 04/17/2012 5:32:53 AM PDT by Oldeconomybuyer
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To: Oldeconomybuyer

Carter tried to regulate. Remember the even/odd days and gas station lines stretching for blocks.

I hope the republicans draw a clear distinction between free market solutions and government strangleholds.


2 posted on 04/17/2012 5:38:25 AM PDT by randita
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To: Oldeconomybuyer

Every contract transfers 35-40 times, with almost every trade involves investment companies. Since relaxing of regulations, we have seen oil jump from $30 per barrel to $140 a barrel, with no real oil shortages. Take speculation out and oil prices will decline. No political agenda here, just an observation from someone who is involved in the industry.


3 posted on 04/17/2012 5:39:58 AM PDT by rstrahan
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To: Oldeconomybuyer
It's way past time that as a society we demote politicians to their proper place as public servants - not savants. There is such a limited amount of experience and knowledge among the elected. Why would any sane person let them micromanage anything? It just doesn't make sense.

Ask yourself, if you owned a company and were looking for employees, would you actually hire Pelosi? To do what? Would you hire Biden? To do what? Would you hire Obama? To do what? etc. etc.

4 posted on 04/17/2012 5:41:38 AM PDT by pieceofthepuzzle
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To: Oldeconomybuyer

I don’t see anything in there about telling the environmentalists to take a flying leap and doing some serious drilling right here at home.


5 posted on 04/17/2012 5:45:25 AM PDT by NRA1995 (I'll cling to my religion and guns till they're pried from my cold dead fingers!)
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To: rstrahan

All Obama will accomplish is to drive more oil trading out of the US and into more foreign markets. NYSE is not the only place in the world trading oil. With electronic trading, most won’t even notice a difference.


6 posted on 04/17/2012 5:50:21 AM PDT by thackney (life is fragile, handle with prayer)
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To: pieceofthepuzzle

Pel-lousy can clean toilets, Bidet can empty trashcans and 0bummer can learn to sweep floors. They aren’t qualified to do any more than those menial tasks, if that, with training.


7 posted on 04/17/2012 5:50:31 AM PDT by carriage_hill (I'd vote for a "orange juice can", before 0bummer&HisRegimeFromHell, gets another 4yrs. Can-> later.)
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To: randita

Meanwhile the drumbeat of Dictator Obama grows louder:

regulate -— control -— destroy -— Regulate -— control -— destroy -— REgulate -— control -— destroy -— REGulate -— control -— destroy -— REGU


8 posted on 04/17/2012 5:55:09 AM PDT by Graewoulf ((Dictator Baby-Doc Barack's obama"care" violates Sherman Anti-Trust Law, AND U.S. Constitution.))
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To: Oldeconomybuyer

Just another Obama Democrat scam to make the Republicans look bad when they fight regulating the oil companies that the Democrats are blaming for the exhorbitant cost of fuel.

Trying to divert the attention from themselves AGAIN.


9 posted on 04/17/2012 5:57:56 AM PDT by rockinqsranch (Dems, Libs, Socialists, call 'em what you will, they ALL have fairies livin' in their trees.)
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To: Oldeconomybuyer

Ah, yes... regulate the market... because it worked SO WELL when Carter did it.

Yet another election-year “do something” measure that makes the initial problem even more problematic.


10 posted on 04/17/2012 5:58:11 AM PDT by ScottinVA (A single drop of American blood for muslims is one drop too many!)
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To: Oldeconomybuyer
Obama's plan would turn the tables on Republicans...

instead of doing what is right for the country. Here's the bottom line of Mr. Obama's plan.

11 posted on 04/17/2012 6:01:57 AM PDT by MulberryDraw (He who is the Glory of Israel does not lie or change his mind;)
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To: Oldeconomybuyer


But that's sort of difficult to implement when...
 
"...fraud, you probably think there should be rules against it, I think the market will figure it out."
--Alan "The Wizard" Greenspan - circa 1997

Hos 12:7-9
7 The merchant uses dishonest scales;he loves to defraud.
8 Ephraim boasts,"I am very rich; I have become wealthy.With all my wealth they will not find in me any iniquity or sin."

9 "I am the Lord your God,[who brought you] out of Egypt; I will make you live in tents again,
as in the days of your appointed feasts.
NIV


12 posted on 04/17/2012 6:08:12 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Oldeconomybuyer
A Republic is a system, of governance characterized by the Rule of LAW.   When the Law fails, the Republic FAILS.  
 
 
"TO SECURE THESE RIGHTS, governments are instituted among men..."

13 posted on 04/17/2012 6:10:24 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Oldeconomybuyer

Why wait for a second term? At this rate, the POS is going to do us in well before that.


14 posted on 04/17/2012 6:13:13 AM PDT by jersey117 (The Stepford Media should be sued for malpractice)
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To: rstrahan

I don’t understand how multiple “contract transfers” can drive the price in any net direction unless there is manipulation (i.e.painting the ticker) going on. Every contract has a winner and a loser seconds after the trade is made depending on whether the next tic was up or down.
While relaxing regulations(whatever that entailed) may correlate to rising prices, that doesn’t mean causation. Oil is generally fungible so if Akmed in Saudi Arabia or Snuffy in Oklahoma refuses to pump oil for his part of the $100/bl, then the price will go up till they turn the pump on. And the price includes delivery costs too no??? So what’s wrong with traders, acting on behalf of their customers, paying a higher price in return for a guaranteed supply? Isn’t that what futures are all about?


15 posted on 04/17/2012 6:15:30 AM PDT by bossmechanic (If all else fails, hit it with a hammer)
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To: rstrahan

I have a memo I wrote to my crew back in the early fall of 1985, think I have the time correct. Attached to the memo was a one page article from “Oil and Gas Journal” reporting that NYMEX would begin trial trades on oil futures. NYMEX was dying because there was so little volatility in their traditional commodity trades. My memo said that this action by NYMEX would be the onset of extreme volatility in oil prices, mark the day when the oil producer would become price takers and not price makers and that prices would be marked by relatively short frequency and high amplitude price swings.

Before this prices were relatively stable save for the embargoes. Other than that oil prices were set by supply and demand determined by people who understood the market.

Once the futures markets were run by and for the advantage of producers, like farmers, not so much anymore. The futures markets are now operated by rich old men with ambitious racket ball playing youngsters on the trading floor. For all they care they could be trading kumquats... the whole thing is about arbitrage and skimming a little as the trade goes by. Nothing of value is produced and it just feels wrong to me. It is a game of risk and not hard work.


16 posted on 04/17/2012 6:15:30 AM PDT by Sequoyah101
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To: rstrahan

The problem is not commodities traders — who merely respond to supply and demand. Speculation makes the market and provides protection from big quick price swings. Raw speculation arises from uncertainty in the future, Having a drudge headline every week about Greece defaulting, Spain, Italy, France having problems, Striking Iran, closing the straights all keep the upward pressure on the market.

There already is regulation and talk of more regulation is only to provide lip service to a problem they [obama] caused but cannot or do not want to fix.


17 posted on 04/17/2012 6:18:27 AM PDT by Usagi_yo
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To: bossmechanic
So what’s wrong with traders, acting on behalf of their customers, paying a higher price in return for a guaranteed supply? Isn’t that what futures are all about?

For one thing, they never have to take possession of the commodity, so they don't incur any costs of physical ownership.

18 posted on 04/17/2012 6:25:21 AM PDT by Hemingway's Ghost (Spirit of '75)
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To: thackney

Not to be a nit picker but it traders on the New York Merchantile Exchange. Commodities do not trade on the stock exchange.


19 posted on 04/17/2012 6:31:16 AM PDT by woodbutcher1963
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To: woodbutcher1963

Thanks for the correction.

Cheers


20 posted on 04/17/2012 6:44:31 AM PDT by thackney (life is fragile, handle with prayer)
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To: Hemingway's Ghost

The trade process allows the liquidity in the market. When I was a big user of natural gas, I had big tanks and a pump station installed and I had corporate purchasing guarantee those tanks would be filled at a certain price so I could run a casting operation with known energy costs. Maybe spot price was better, I don’t know. But I knew my cost and could plan accordingly. Without traders/speculators (liquidity), unexpected huge price changes would have screwed my end product pricing and shut me down.
For every trade on any stock, commodity, bond etc, there is a winner and a loser at the next tic. There’s always a seller for every buyer and increments are relatively small. Without traders and the at-risk dollars of those elite tennis club armchair players, price/cost stresses would gap to potentially disastrous situations.
Am I missing something here? Someone tell me why free market speculation is wrong. The only types of manipulation that are bad that I’m aware of is cornering a market like the Hunt brothers tried in silver some years ago(and they got screwed) and painting the ticker so as to create a trend - and that’s already illegal and the SEC will get you for doing it.


21 posted on 04/17/2012 6:47:20 AM PDT by bossmechanic (If all else fails, hit it with a hammer)
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To: randita

That’s the ticket!

Bring back the even/odd days to buy gas. Obama can create a new federal bureaucracy to police the stations, administered by Big Sis.

It’s the...umm...the Obama Even-Flo Gas Plan, named after the baby bottle.


22 posted on 04/17/2012 6:49:42 AM PDT by citizen (Romney doubters: Better check your Obama yard sign. The neighbor dog just took a leak on it...again.)
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To: Oldeconomybuyer
Speculation In Crude Oil Adds $23.39 To The Price Per Barrel

'As Goldman Sachs believes that each million barrels of speculation in the oil futures market adds about 10 cents to the price of a barrel of oil, this means that in theory the speculative premium in oil prices due to speculation is as much as $23.39 a barrel in the price of NYMEX crude oil.

In turn oil analysts believe that every $10 rise in the price of crude oil translates into a 24 cent rise in the price of gasoline at the pump. Using the 24 cent rise in the price of gasoline suggests that each dollar increase in a barrel of oil equals about $.56 per barrel.'

23 posted on 04/17/2012 7:05:00 AM PDT by Theoria (Rush Limbaugh: Ron Paul sounds like an Islamic terrorist)
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To: citizen

When Lehmans went under it had contracts for millions of barrels of oil and gasoline. Speculators can and do influence prices. George Soros though speculation and short-selling almost destroyed the British financial system. Lehmans was destroyed by unregulated short-selling, not bad management. Speculators can have a behind-the-door agreement to sell between each other, running up a price, then selling, artificially inflating the price.

It happens all the time.


24 posted on 04/17/2012 7:16:09 AM PDT by rstrahan
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To: rstrahan
Since relaxing of regulations, we have seen oil jump from $30 per barrel to $140 a barrel, with no real oil shortages.

Although this is true, high barrel prices are NOT the cause of our current gas prices! When gas was over $4.00 a gallon under Bush, a barrel of oil was $145! Gas prices are over $4.00 in some areas today and yet a barrel of oil is $102!

This is Obama induced INFLATION! Acting like regulation would solve our current gas prices IS a political agenda!
25 posted on 04/17/2012 7:39:11 AM PDT by ExTxMarine (PRAYER: It's the only HOPE for real CHANGE in America!)
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To: rstrahan
Since relaxing of regulations, we have seen oil jump from $30 per barrel to $140 a barrel, with no real oil shortages.

Although this is true, high barrel prices are NOT the cause of our current gas prices! When gas was over $4.00 a gallon under Bush, a barrel of oil was $145! Gas prices are over $4.00 in some areas today and yet a barrel of oil is $102!

This is Obama induced INFLATION! Obama and his administration acting like regulation would solve our current gas prices IS nothing but a political agenda!
26 posted on 04/17/2012 7:45:11 AM PDT by ExTxMarine (PRAYER: It's the only HOPE for real CHANGE in America!)
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To: Theoria
The Dodd-Frank bill, passed TWO YEARS AGO, gave the Commodity Futures Trading Commission the authority to raise the margins or eliminate them all together. However, the CFTC has 5 members: 3 D's (one of which appointed by Obama) and two R's, and the D's have been purposefully delaying implementing the new rules on margins.

OBOMBA must be scared....he's doing this a little early ...figured he'd wait until August....and spending $52 million? UNNEEDED!!!!

27 posted on 04/17/2012 9:35:35 AM PDT by goodnesswins (2012..."We mutually pledge our Lives, our Fortunes, and our Sacred Honor")
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To: thackney

More Government produces nothing but higher prices. Obama is a Communist who has no idea about wealth as he has lived the AA/Islamic/Marxist coattails his entire life.

Government produces nothing, but he wants more Government.

It’s the paradox of a Left Winger, they have no clue about anything but lies, theft and redistribution of wealth via taxation and regulation.

Obama will tank the nation, given another four years, I hate to say it but if we don’t even elect the slick Mormon Mitt, we are doomed.

Mitt is not what I want, but given the choice, like McCain, I have to vote RINO.

The Kenyan is on a path to make us broke and starving...he needs a cell, not AF1.


28 posted on 04/17/2012 10:25:05 AM PDT by wac3rd (Somewhere in Hell, Ted Kennedy snickers.....)
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To: rstrahan

It is not the futures market that drives up the price of oil, it is tightness of supply relative to demand.

The same rules apply to Natural Gas trading that apply to crude oil.

It is a supply and demand issue. Open up more supply in the oil market and the commodity trading rules will drop the price as it has done for natural gas.


29 posted on 04/17/2012 11:17:46 AM PDT by thackney (life is fragile, handle with prayer)
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