Obama’s oil market plan more politics than substance

President Obama's call to rein in oil market speculation comes just as those very market forces appear to be accomplishing his real goal of lowering gasoline prices in the middle of an election campaign.

The president announced Tuesday that he wants Congress to crack down on oil market speculators whom he argues have helped drive up the price of crude oil and gasoline.

House Speaker John Boehner, R-Ohio, denounced the plan as unnecessary, saying the White House already has the tools available to crack down on any possible oil price manipulation.

"Where is his Federal Trade Commission? Where is the SEC?" said Boehner. "He's got agencies there. So instead of just another political gimmick why doesn't he doesn't he put his administration to work to get to the bottom of it."

"You can't drive a car with a windmill on it," Romney recently told a campaign crowd in Ohio.

Speculators are not driving up the price of oil. Oil is a global market, and global supply and demand fundamentals combined with the possibility of a supply disruption in Iran are driving up oil prices. Speculators don't care if prices are high or low. Speculators just want market volatility so they can trade more profitably over a wider price range. The same commodity traders who are accused of driving the price of oil up to some kind of "unfair price" have also just traded natural gas down to multi-year lows.

If the price of oil was actually up at an "unfair price", we would see continued large builds in oil inventories throughout the world. We're not seeing a continued increase in oil inventories. Inventories are slightly higher than average levels but that is just the natural result of traders factoring in the possibility of a supply disruption later this year. The resulting higher inventory level is the way the oil market prepares for a possible supply disruption. If a supply disruption occurs, those moderately higher inventories will help to limit an oil price spike.

Speculators are not the cause of rising oil prices. One part of the cause is the huge blunder made by the administration when it imposed a drilling moratorium for several months in the Gulf of Mexico after the BP oil spill. Instead of cancelling several months of drilling work by all companies, the moratorium should only have applied to BP because BP is the only company with a long record of numerous safety and environmental law violations throughout America. The US lost a lot of oil production because of the totally unjustified decision to stop all oil exploration work in the gulf for several months, and that blunder has resulted in higher oil and gasoline prices. Oil traders are actually helping the consumer by setting the price of oil at exactly the right price that prevents shortages and gas lines while maintaining steady and reasonable oil inventory levels.

Under Bush:
$4 a gallon gas and $145 a barrel of oil

SPECULATION!

Under Obama:
$4 a gallon gas and $102 a barrel of oil

I N F L A T I O N!!!

That means this is ALL Obama’s fault! And he is trying to point fingers at someone, anyone, everyone - EXCEPT himself! PUTZ!

Speculators just want market volatility so they can trade more profitably over a wider price range.

Only speculators lacking an ulterior motive in a bigger game. Soros and crew propelled gas prices in 2007 to touch off the mortgage meltdown so that he could cash in on the chaos.

There's speculation, and then there's manipulation.

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