Free Republic

Inconvenient Truths About Oil USA Tom Glennon -  May 24, 2008   http://www.newmediajournal.us/guest/t_glennon/2008/05242008.htm Before my recent retirement after a career of almost 40 years, I had the unique opportunity to work in the technology areas for a major oil company, an international financial operation, and one of the world’s largest international banks. As a result, although not an expert in either exploration or production of crude oil and its impact on financial and consumer markets, I did have access to information that most American consumers did not. This was not secret data, nor was it proprietary information. It was...

Congress is investigating oil speculators, bank stocks are being pummeled, and housing prices are dropping precipitously in certain markets. And this is the good news. I was always taught in my graduate and undergraduate classes that markets are rational, but after looking at the current market valuation of bank stocks, one must seriously consider if our markets are being manipulated. It would be reasonable to question whether the U.S. is being subjected to an economic attack. In the aftermath of 9/11, there was a great deal of speculation about...

SINGAPORE: Investing legend and commodities guru Jim Rogers says crude oil prices have been going up thanks to an unprecedented demand-supply mismatch. He said those who blame speculators for oil price surge do not understand the oil reality in the world. Talking to Commodity Online, Rogers, who founded the Rogers International Commodity Index, said he has been predicting all these years that oil price would go up because of shortage of supply. ”Some people blame speculation for oil price rise. If it is speculation, when the oil price is too high, the people with oil will drown the speculators. It...

NEW YORK (CNNMoney.com) -- Hundreds of grounded planes. Thousands of lost jobs. Nearly two dozen price hikes. Record oil prices have battered the airline industry, and Wednesday the airlines called on Congress to act. In an open letter to all airline customers, CEOs from 12 of the nation's airlines said lawmakers must curb excessive speculation to scale back record fuel costs. "Normal market forces are being dangerously amplified by poorly regulated market speculation," the letter said. "The nation needs to pull together to reform the oil markets and solve this growing problem." The airline industry said that Congress' previously established...

WASHINGTON -(Dow Jones)- Expecting to lose an estimated $10 billion this year because of skyrocketing fuel costs, chief executives of the country's biggest airlines Wednesday resorted to begging their customers to press Congress for tougher regulation of energy markets.

ALTHOUGH the price of oil continues to hit new records, it has in one respect been a quiet week on the oil markets. America’s lawmakers are celebrating Independence Day by taking a few days off. That has led to a brief interruption in the torrent of proposals aimed at curbing speculation. Ten different bills on the subject are in the works in Congress. Before the House of Representatives shut up shop, it approved one by a vote of 402-19. America’s politicians are not the only ones to have fingered speculators for the feverish rise in the price of oil and...

Despite Congress' periodic hauling of weak-kneed oil executives before their committees to charge them with collusion and price-gouging, subsequent federal investigations turn up no evidence to support the charges. Now oil company executives are getting a bit of a respite as Congress has turned its attention to crude-oil speculators, blaming them for high oil prices and calling for tighter control over commodity futures trading. Let's look at the futures market and for simplicity use corn futures. While corn is different from oil, both obey the laws of supply and demand, just as humans are very different from bricks but both...

Congress is back in session and oil prices are still through the roof, so pointless or destructive energy legislation is all but guaranteed. Most likely is stiffer regulation of the futures market, since Democrats and even many Republicans have so much invested in blaming "speculators" for $4 gas. Congress always needs a political villain, but few are more undeserving. Futures trading merely allows market participants to determine the best estimate – based on available information like supply and demand and the rate of inflation – of what the real price of oil will be on the delivery date of the...

NEW YORK (Fortune) -- Atlanta hedge fund manager Michael Masters has been a star witness in two recent Congressional hearings on how speculators are supposedly driving up oil prices. Masters and I don't see eye-to-eye on this issue, so I was surprised to get a call from him after my "Don't Blame The Oil Speculators" column went up on Fortune.com last week. Masters contends that without speculators, the price of oil would be $65 or $70 a barrel. He points out that the amount invested in commodities index products has risen from $13 billion to $260 billion in five years,...

Politicians who try to make oil cheaper by restraining speculation will just make things worse ALTHOUGH the price of oil continues to hit new records, it has in one respect been a quiet week on the oil markets. America’s lawmakers are celebrating Independence Day by taking a few days off. That has led to a brief interruption in the torrent of proposals aimed at curbing speculation. Ten different bills on the subject are in the works in Congress. Before the House of Representatives shut up shop, it approved one by a vote of 402-19. America’s politicians are not the only...

Drilling off the coast of California, Florida and elsewhere would increase domestic oil production by 7 percent by 2030, according to the Energy Information Administration. But “because oil prices are determined on the international market…any impact on average wellhead prices is expected to be insignificant.” There is no short-term benefit to drilling, says the EIA, because it would take at least five years for oil production to begin. (Source: Center for American Progress.)

LONDON: London's Brent crude oil hit 146 dollars a barrel for the first time on Thursday, as traders reacted to Middle East tensions, falling US crude reserves and the weak dollar. Brent North Sea oil for August delivery surged to a life-time peak of 146.34 dollars. New York's main oil contract, light sweet crude for August delivery, meanwhile surged past 145 for the first time to reach an all-time pinnacle of 145.43 dollars a barrel. Analysts said a weaker US dollar, and data that revealed a drop in stockpiles of US crude, helped push prices higher. The US Energy Information...

<p>Before the U.S. Commodity Futures Trading Commission starts scrutinizing the role that speculators may have played in driving up fuel and food prices, investigators may want to take a look at price swings in a commodity not in today's news: onions.</p>

Sen. Obama's plan to attack the "oil speculators" who are "driving" up the price of oil by regulating futures contracts on American oil may not be pandering (America certainly cannot, for example, regulate oil futures on Nigerian crude in Switzerland), but it is sure close, and here is why, and I'm sure all those people who helped him draw up this plan know it.

(remember all those "speculators"?...)

NEW YORK (Fortune) -- "Make no mistake about it," U.S. Rep. Bart Stupak, D-Mich., said Monday while chairing a meeting of the House Energy and Commerce subcommittee on Oversight and Investigations. "Excessive speculation in commodity markets is having a devastating effect at the gas pump that is rippling through our entire economy." Here's a suggestion: The next time a Congressional committee wants to hold a hearing on how "speculators" are driving up oil prices, each committee member should first be required to demonstrate - preferably in their opening remarks - a basic understanding of the mechanics of futures trading. Even...

The U.S. House of Representatives on Thursday overwhelmingly approved legislation that directs the Commodity Futures Trading Commission to use all its authority, including the agency's emergency powers, to "curb immediately" the role of excessive speculation in energy futures markets. Hedge funds, pension funds and other speculators have been blamed by many lawmakers and some energy experts for doubling the price for crude oil in the last year. The Bush administration disagrees, saying high prices are the result of world oil production not being able to keep up with growing global fuel demand. The bill easily cleared the House in a...

WASHINGTON — Growing global demand for oil and the fear of supply disruptions have created a "shortage psychology" that is helping keep fuel prices high, a leading energy analyst told Congress on Wednesday. Many speculators now are convinced the world is "running out of oil," energy expert Daniel Yergin told a Joint Economic Committee hearing. "As prices go up, this psychology becomes self-reinforcing," sending prices higher still - at least, until consumption patterns change dramatically. "We are in an oil shock," said Yergin, chairman of Cambridge Energy Research Associates, a consulting firm. "Four years ago, oil was around $40 a...

NEW YORK (CNNMoney.com) -- Oil expert Daniel Yergin will tell Congress on Wednesday that speculative oil traders have played a role in driving up prices but other factors, such as the subprime mortgage crisis, have also been a factor.

"I believe there needs to be a thorough and complete investigation of speculators to find out whether speculation has been going on and, if so, how much it has affected the price of a barrel of oil. There's a lot of things out there that need a lot more transparency and, consequently, oversight." Those are the words of presidential candidate John McCain. This man is the Republican? There's more. "I am very angry, frankly, at the oil companies not only because of the obscene profits they've made but at their failure to invest in alternate energy to help us eliminate...