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Republicans Are Ignoring The Real Reasons For High Gas Prices (It's NOT the pipeline)
Business Insider ^ | 02/21/2012 | Robert Reichhhhhhhh

Posted on 02/21/2012 6:48:43 AM PST by SeekAndFind

Nothing drives voter sentiment like the price of gas – now averaging $3.56 a gallon, up 30 cents from the start of the year. It’s already hit $4 in some places. The last time gas topped $4 was 2008.

And nothing energizes Republicans like rising energy prices. Last week House Speaker John Boehner told Republicans to take advantage of voters’ looming anger over prices at the pump. On Thursday House Republicans passed a bill to expand offshore drilling and force the White House to issue a permit for the Keystone XL pipeline. The tumult prompted the Interior Department to announce on Friday expanded oil exploration in the Arctic.

If prices at the pump continue to rise, expect more gas wars.

In fact, oil prices are rising for three reasons — none of which has to do with offshore drilling or the XL pipeline.

The first, on the supply side, is Iran’s decision to cut in oil exports to Britain and France in retaliation for sanctions put in place by the EU and United States. Iran’s threat to this has been pushing up crude oil prices for weeks.

The second, on the demand side, is rising hopes for a global economic recovery – which would mean increased oil consumption. The American economy is showing faint signs of a recovery. Europe’s debt crisis appears to be easing. Greece’s pending bailout deal is calming financial nerves on both sides of the Atlantic, and the Bank of England and European Central Bank are keeping rates low. At the same time, China has decided to boost its money supply to spur growth there.

Neither of these would have much effect were it not for the third reason — overwhelming bets of hedge funds and other money managers that oil prices will rise

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


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: gasprices; oil
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1 posted on 02/21/2012 6:48:50 AM PST by SeekAndFind
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To: SeekAndFind

Robert Reich is the biggest joke in economic thought in a thousand years. Actually, he’s tied with Paul Krugman for the title. Gas prices are rising because our dollar is diminished. All other factors are secondary. His boogeyman theory about ‘speculators’ is laughable, as always.


2 posted on 02/21/2012 6:52:37 AM PST by ilgipper (Everything you get from the government was taken from someone else)
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To: SeekAndFind

weak dollar.


3 posted on 02/21/2012 6:52:46 AM PST by Perdogg
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To: SeekAndFind
"rising hopes for a global economic recovery"

I had to stop right there.

Anyone who thinks that we are experiencing a "global recovery" is delusional.

Most of the hedge fund and bond manager reports I'm reading are positioning their clients' assets for a CONTRACTION.

Keep dreaming, Robert.

4 posted on 02/21/2012 6:53:07 AM PST by TheWriterTX (All in now for Newt Gingrich)
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To: SeekAndFind

Gee, Gnome Chumpski, if we drilled for offshore oil and built the XL pipeline and drilled in ANWR, wouldn’t that help offset Iran’s threats to cut off oil and help to meet the rising demand created by Obama’s bestest economy in a gazillion years?


5 posted on 02/21/2012 6:53:38 AM PST by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: ilgipper

“His boogeyman theory about ‘speculators’ is laughable, as always.”

Even if speculators are to blame, what’s the best way to beat them? Increase supply. It’s difficult to corner a market that has multiple, and prolific supply points.


6 posted on 02/21/2012 6:55:07 AM PST by brownsfan (Aldous Huxley and Mike Judge were right.)
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To: SeekAndFind

Watch Obama dip into the emergency reserve supply.


7 posted on 02/21/2012 6:56:29 AM PST by SumProVita (Cogito, ergo...Sum Pro Vita. (Modified Decartes))
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To: SeekAndFind
Neither of these would have much effect were it not for the third reason — overwhelming bets of hedge funds and other money managers that oil prices will rise

Ha haaaaaa!!!

Wouldn't it be a hoot if Ukel suddenly approved offshore drilling and the XL pipeline???

Hooooo. I'd love to see the looks on those hedge funds' faces when those prices dropped through the floor.

Oh. Wait. I forgot. The pipeline and drilling have no effect on prices.

8 posted on 02/21/2012 6:57:07 AM PST by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: Texas Eagle
Gee, Gnome Chumpski, if we drilled for offshore oil and built the XL pipeline and drilled in ANWR, wouldn’t that help offset Iran’s threats to cut off oil and help to meet the rising demand created by Obama’s bestest economy in a gazillion years?

A++

9 posted on 02/21/2012 6:58:55 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: ilgipper

I think he has a point though. When the stock market crashed in 2008, it sent the price of gasoline down sharply. The price of gas fell in the neighborhood of 40-50% in a very short time.


10 posted on 02/21/2012 6:59:06 AM PST by ChurtleDawg (voting only encourages them)
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To: SeekAndFind
In fact, oil prices are rising for three reasons — none of which has to do with offshore drilling or the XL pipeline.

Nice try at a Jedi mind trick you little Ewok.

11 posted on 02/21/2012 6:59:15 AM PST by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: ilgipper

I think he has a point though. When the stock market crashed in 2008, it sent the price of gasoline down sharply. The price of gas fell in the neighborhood of 40-50% in a very short time.


12 posted on 02/21/2012 6:59:21 AM PST by ChurtleDawg (voting only encourages them)
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To: ilgipper

If you read his article, you already see how he’s cluthcing at straws to blame the GOP for this.

In fact, he contradcits himself. He thinks readers are stupid enough to buy his argument.

He claims that drilling and the pipeline are pointless yet he says the first reason prices up is (HARUMP HARUMP ) because SUPPLY IS DOWN.

Well DUH !! Why is supply down Mr. Reichhhhh?

Isn’t it because we have all but PREVENTED more drilling in our own shores? Isn’t it because we’ve all but signalled to the world and our neighbors that we don’t want their oil flowing in?

Gas prices are just where Obama WANTS THEM to be. Of course that doesn’t fit in with what the American people want to see, so the excuses start to flow from the Left on why prices are increasing.

He wants gas prices to go up so that people will turn to his precious electric cars and green energy sources. Well, congratulations, he’s successding.


13 posted on 02/21/2012 7:00:27 AM PST by SeekAndFind
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To: Texas Eagle

14 posted on 02/21/2012 7:01:05 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: SeekAndFind
As with most of Reich's points, these come up a little short.


15 posted on 02/21/2012 7:01:05 AM PST by reagan_fanatic (A communist is just a liberal in a hurry)
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To: SeekAndFind

If the US drilled one billion barrels a day and shipped out to overseas markets 1 billion barrels a day, there would be no relief for the US citizen unless he was heavily invested in oil companies. How much Alaskan oil goes directly to Japan? How much of the Canadian oil will be retained here via the XL Pipeline? Not much.


16 posted on 02/21/2012 7:01:58 AM PST by Safetgiver (I'd rather die under a free American sky than live under a Socialist regime.)
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To: SeekAndFind

Like I said,

one thing for sure about high gas prices - they aren’t 0bama’s fault,

because NOTHING is ever 0bama’s fault.


17 posted on 02/21/2012 7:02:24 AM PST by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working for)
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To: Texas Eagle

The oil markets don’t think that long term - the one thing that is true is that if the pipeline and all drilling was approved tomorrow, it wouldn’t drop oil prices, as it would be several years before any of it was on-line.


18 posted on 02/21/2012 7:02:41 AM PST by Strategerist
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To: SeekAndFind

So this clown infers that the Keystone pipeline is not an oil supply line, and has nothing to do with the supply of crude.

We do not have enough refineries and not enough oil wells or we would be in charge of the world price of oil and gas, the economy would be greater than ever and we would not be supplying terrorists with billions of dollars to destroy the world system. The administration cares nothing of the American Way.


19 posted on 02/21/2012 7:02:55 AM PST by mountainlion (I am voting for Sarah after getting screwed again by the DC Thugs.)
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To: ChurtleDawg

RE: When the stock market crashed in 2008, it sent the price of gasoline down sharply. The price of gas fell in the neighborhood of 40-50% in a very short time.

Let’s see where the Democrats want us to go from here -—

High Gas prices are bad for the economy.

Stock market crashes sends the price of gas down.

Therefore, to send theprice of gas down, let’s have more stock market crashes....

BRILLANT. Tell that to all holders of 401K and Pension Plans.


20 posted on 02/21/2012 7:02:55 AM PST by SeekAndFind
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To: SeekAndFind
This appeared in something called Business Insider?

Is this a publication people spend their hard-earned money on or is it one of those leaflets that get handed out for free outside of Occupy Wall Street rape tents?

21 posted on 02/21/2012 7:06:01 AM PST by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: Strategerist

Don’t you think that threatening to increase our supply would stimulate foreigners to increase what they supply? They have every interest in making American production unprofitable (that’s the mechanism that killed west Texas oil production back in the ‘80’s, remember?)

So the price for crude might not drop tomorrow, but it would be moving down by summer. Of course, if we were supplying ourselves, the cost would be net very little as the revenues would circulate inside our economy instead of heading into other sovereign pockets first.


22 posted on 02/21/2012 7:08:28 AM PST by BelegStrongbow (St. Joseph, patron of fathers, pray for us!)
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To: SeekAndFind

23 posted on 02/21/2012 7:09:35 AM PST by Fresh Wind ('People have got to know whether or not their president is a crook.' Richard M. Nixon)
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To: SeekAndFind

Bobbie can’t even see over the top of a gas pump.


24 posted on 02/21/2012 7:10:53 AM PST by Paladin2
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To: Strategerist
The oil markets don’t think that long term - the one thing that is true is that if the pipeline and all drilling was approved tomorrow, it wouldn’t drop oil prices, as it would be several years before any of it was on-line.

Ahhh, yes. But we didn't just start talking about offshore oil drilling. We didn't just start talking about drilling in ANWR. The XL pipeline is something relatively recent.

The point is, we've been hearing this line of reasoning for at least 20 years now.

Next year will be here before you know it. Look how fast this year got here.

25 posted on 02/21/2012 7:10:53 AM PST by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: SeekAndFind
none of our markets, including the oil market, reflect economic reality any longer. They all reflect manipulations and government interference which has nothing to do with supply and demand or financial reality.
26 posted on 02/21/2012 7:12:22 AM PST by paul51 (11 September 2001 - Never forget)
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To: SeekAndFind

“Funny, I don’t hear Republicans rail against speculators. Could that have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?”

Really, Robert? Got an evidence to back that up, or are you just going to throw that out there in hopes that the uneducated democratic voter base laps it up without a hint of skepticism?


27 posted on 02/21/2012 7:14:09 AM PST by bolobaby
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To: SeekAndFind

Huge Plunge In Petroleum and Gasoline Usage

http://globaleconomicanalysis.blogspot.com/2012/02/huge-plunge-in-petroleum-and-gasoline.html


28 posted on 02/21/2012 7:23:05 AM PST by MulberryDraw (Anyone see the democrat budget yet?)
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To: reagan_fanatic

Crikey, he’s a bloomin’ midget!


29 posted on 02/21/2012 7:25:43 AM PST by pingman (Durn tootin'; I like Glock shootin'!)
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To: SeekAndFind

If speculators were influencing the market as Reich suggests I would think the price of a barrel of oil itself would be rising. However, it has stayed pretty static for awhile, only rising lately a little bit in response to the Iranian decision.

It’s the price of gas itself going up.


30 posted on 02/21/2012 7:30:16 AM PST by VeniVidiVici (Obama's War on Prosperity is killing me)
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To: SeekAndFind

Professor Dwarfenstein first to leap into the breach spouting the conspiracy theory of the Grrrrrreeeeedy Eeeeeeevil Speculators.

Expect this to become a crescendo chorus. The Libs don’t have many other cards to play on this one.


31 posted on 02/21/2012 7:34:43 AM PST by Buckeye McFrog
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To: Texas Eagle

“Nice try at a Jedi mind trick you little Ewok.”

Thanks for the morning chuckle.

You know, the little man has a head the size of his body trunk. Too bad it’s not full of gray matter.


32 posted on 02/21/2012 7:36:45 AM PST by poobear
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To: SeekAndFind

Production cost is a key factor in the supply side of the equation, so the Republicans are right to call attention to cost-increasing government policies — things like mandated additives and environmental regulations blocking domestic oil production, pipelines, the construction of more efficient refineries.


33 posted on 02/21/2012 7:47:31 AM PST by Socon-Econ (Socon-Econ)
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Europe’s debt crisis appears to be easing...

Stop! Really, I mean it, just stop. I just peed myself laughing.

34 posted on 02/21/2012 7:53:11 AM PST by ponygirl ( Obamanomics: Handing out condoms on the Titanic. (Mark Steyn))
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To: ChurtleDawg; SeekAndFind
Of course he has a point. Bush was attacked because of high gas prices, but the DOW was high on its bubble!

And when Obama and co took over, gas was cheap and the Dow was low.

Btw, America top export is fuel! The more fuel that's sent overseas, the less of a supply cushion there is at home.

35 posted on 02/21/2012 7:53:57 AM PST by Theoria (Rush Limbaugh: Ron Paul sounds like an Islamic terrorist)
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To: Socon-Econ
This is the Game Changer

I am hoping for Gas lines too.

36 posted on 02/21/2012 7:54:56 AM PST by scooby321
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To: ilgipper
Gas prices are rising because our dollar is diminished.

The dollar has been relatively "stable" against the major currencies for about a 2 years now (CHF being an exception), so I'm not sure how "diminished" plays into the mix NOW more than a year or so ago ...

The Crude price has been stable at ~$100 as well since the beginning of December (ex futures). The futures price is also stable out to July ...

That said - Iran's Embargo of England and France is insignificant and is just being used as an excuse to raise prices.

So if it's not the dollar, and it's not the price of crude, it can only be the Oil Companies themselves that are raising the prices at the pump out of "fear".

37 posted on 02/21/2012 7:56:27 AM PST by An.American.Expatriate (Here's my strategy on the War against Terrorism: We win, they lose. - with apologies to R.R.)
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To: SeekAndFind
Oil demand and forecasts: getting it wrong again in 2012


38 posted on 02/21/2012 7:58:47 AM PST by dirtboy
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To: bolobaby
“Funny, I don’t hear Republicans rail against speculators. Could that have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?”

This comment is absurd on a lot of levels.

First, investment banks such as Goldman Sachs who are major players in commodity funds bankroll Dems more than pubbies.

Second, using speculation to spike prices can only happen if there is a fairly tight supply - and eventually that bubble will pop as it did in 2008 as consumers cut use.

The GOP's solution is to increase supply. The Dems LIKE high gas prices.

39 posted on 02/21/2012 8:04:25 AM PST by dirtboy
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40 posted on 02/21/2012 8:19:43 AM PST by TheOldLady (FReepmail me to get ON or OFF the ZOT LIGHTNING ping list)
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To: Safetgiver
Not true. You are ignoring the supply side.

Roughly 800,000 B/D can be exported from the tar sands to the world markets. That 800,000 B/D adds to the global supply putting downward pressure on prices globally.

41 posted on 02/21/2012 8:38:57 AM PST by Former Proud Canadian (Obamanomics-We don't need your stinking tar sands oil, or the jobs that go with it.)
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To: SeekAndFind

“And nothing energizes Republicans like rising energy prices.”

This is so true. I remember the (now dead) TEA parties, and the violent and abusive townhall meetings sparked by rising gas prices. They even drowned a polar bear. Yeah, that’s the ticket.


42 posted on 02/21/2012 8:39:09 AM PST by Darth Reardon (No offense to drunken sailors)
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To: An.American.Expatriate

What about the increased gasoline and diesel exports from this country to Europe?

With the advent of ultra low diesel and heating oil, it has enabled increased exports to Europe.

Inventories have plummeted as a result.


43 posted on 02/21/2012 8:44:15 AM PST by headstamp 2 (Liberalism: Carrying adolescent values and behavior into adult life.)
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To: SeekAndFind

0bama’s fault, plain and simple. Reich can stuff it.


44 posted on 02/21/2012 8:46:22 AM PST by SueRae (Tale of 2 Towers - First, Isengaard (GOP-e), then 11.06.2012, the Tower of Sauron)
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To: dirtboy

Exactly.

But Reich has no integrity, so he’ll never frame it that way.


45 posted on 02/21/2012 8:48:49 AM PST by bolobaby
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To: headstamp 2
What about the increased gasoline and diesel exports from this country to Europe?

What of it? I stated that it was not the value of the dollar, nor was it the price of crude oil that is responsible for the recent rise at the pump. Increasing exports to Europe only serves to placate demand at the current prices and, if anything would reduce the price if supplies exceeded demand.

I contend that the Oil Companies are again using the specter of "impending crisis" to justify an increase in prices at the pump.

46 posted on 02/21/2012 8:56:53 AM PST by An.American.Expatriate (Here's my strategy on the War against Terrorism: We win, they lose. - with apologies to R.R.)
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To: SeekAndFind

hedge funds, at banks, who can borrow at less than 1% and trade for commodities to earn 5%...looks like a simple bet with low risk. What is wrong with that picture?


47 posted on 02/21/2012 9:12:23 AM PST by q_an_a (the more laws the less justice)
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To: ChurtleDawg
I think he has a point though. When the stock market crashed in 2008, it sent the price of gasoline down sharply. The price of gas fell in the neighborhood of 40-50% in a very short time.

I believe it had more to do with this cause and effect:

.

.


48 posted on 02/21/2012 10:17:25 AM PST by Cobra64 (Common sense isn't common anymore.)
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To: SeekAndFind

What is missing in this article is the role of OPEC which is a price fixing cartel. If the US gets its oil from world markets it’s at the price set by OPEC and the speculators. However American oil sold in the USA is NOT subject to the OPEC price and can find its price equilibrium based on supply and demand. Canada is NOT an OPEC member so Canadian oil can also be sold to the US at market prices. Building the XL pipeline would not immediately bring down gas prices, but it would assure us of an oil supply that cannot be interrupted by chaos in the Middle East or the whims of dictators like Hugo Chavez. Bottom line if we exploited the known oil reserves in the US including ANWAR and the Gulf and completed the XL pipeline we would have secure sources of the oil we need and not be subject to OPEC price fixing.


49 posted on 02/21/2012 10:46:13 AM PST by The Great RJ ("The problem with socialism is that pretty soon you run out of other people's money" M. Thatcher)
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To: SeekAndFind

The prices above were shown on SF KTVU this morning. They are blocking the prices of the higher grades which were over $5/gallon.

Remember the hate America Enviros have wanted $5/gallon for gas for years. If our economy was recovering, this will drive a wooden stake into its heart!

50 posted on 02/21/2012 11:05:26 AM PST by Grampa Dave (ILLEGAL IMMIGRATION IS DESTROYING AMERICA-LOOK AT WHAT IT DID TO THE WHITE HOUSE!)
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