Congress Still Pointing At Everyone But Itself For High Oil Prices
Still … They are in a major state of denial as to the primary reason we are seeing this stupid crisis … No, it is everyone else’s fault but their own.
I, for one, am beginning to wonder if the democrat Congress likes the high price of oil/gas … and why.
Just Speculating
(IBD)
Energy: Democrats, in their never-ending search for scapegoats, have had a go at oil company CEOs, industry profits and now oil “speculators.” They’ve looked everywhere but where they should — in the mirror.
The congressional hearings that kicked off Monday to look into speculative behavior in the markets produced all the usual finger-pointing about the doubling in oil prices over the past year to nearly $137 a barrel.
Meanwhile, Barack Obama, seeking to catch a political wave he can ride all the way to the presidency, has announced he’ll “crack down” on oil speculation by imposing new limits and regulations on oil traders in the futures markets.
But as emotionally satisfying as going after speculators sounds, this will only make our current oil problem much worse.
It’s true there’s speculation in the oil market. But then again, there’s speculation in virtually every exchange-traded good — from oil and gold to corn and pork bellies. This isn’t just acceptable, it’s healthy.
Speculators aren’t evil. They ensure a liquid market for the commodities we need most. They make money by buying low, when the product is in low demand, and selling high, when demand has grown.
It has been pretty easy for them to make money recently, because speculation in oil has become a one-way bet.
Global oil demand has been growing by about a million barrels a day each year — thanks to surging use in fast-growing China, India, the Middle East and parts of Eastern Europe. Supply hasn’t kept pace. In fact, it’s falling at key suppliers including Mexico, Venezuela, Nigeria and Russia. So the price rises.
The logical answer to any question about speculation in a market is: What are you doing to boost supply? In the case of Congress and the solution offered by Obama, the answer is nothing.
They would punish people who do economically useful work, but wouldn’t add a drop to our oil supply. If they really wanted to break the back of speculation, they should signal that they intend to use every means at their disposal to bring energy markets back in line.
High prices already have curbed demand here in the U.S., the latest data show. What’s left is to drill for the literally hundreds of billions of barrels of oil we have here in this country locked up offshore, in Alaska and in vast shale-oil reserves.
Instead, the Democrat-led Congress has pursued foolish energy policies that lead inevitably to higher prices, less supply and declining standards of living for all Americans.
As for speculation, one tell-tale sign of market manipulation is a buildup of inventories kept off the market to keep prices high. That is, as the price runs up, the speculators pull supply off the market.
Is that happening? No. Oil inventories, in the most recent data, are down year over year. No one’s hoarding oil.
Claims of surging speculation likewise fall apart on closer examination. It’s true that speculative positions in oil have jumped from 37% of all oil traded in 2000 to 70% now. But much of that trading involves commercial hedging and risk-management — not speculation by people out to make a killing.
As the Commodity Futures Trading Commission notes: “There are almost as many short speculative positions as there are long positions.” In other words, speculators are betting as much that prices will drop as they will rise.
In short, there’s no real evidence that speculators are driving energy prices up. But there’s plenty of evidence that Congress’ refusal to permit drilling is a big factor keeping supplies down.
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Of course the Democrat Marxist like the high prices. They probably wet their pants every time they see a gas sign with over $4 on the board.
You want energy independence, it’s always been right under your feet.
June 24th, 2008 at 4:07 pmI have $200.00 to send you to DC and Visit the Libtards to Advance our Cause!!
Is every one with me? Drill, Drill, Drill, Build, Build, Build, Jobs, Jobs, Jobs.
$4.00 Gas Is Killing Me!!!!
June 24th, 2008 at 4:20 pm“In short, there’s no real evidence that speculators are driving energy prices up.”
Sure there is. How much oil is sold each day vs. how much oil is pumped each day?
June 24th, 2008 at 4:55 pmThanks, hun … But I doubt $200 would get me bail … afterward
June 24th, 2008 at 4:57 pmWhat happens If we do start drilling In Anwr?
New Handle?
DrillFloida? I Like It.
June 24th, 2008 at 5:11 pmI don’t think you people get it. Production of domestic oil has been steadily declining for the past 30 years. It is the objective of dems to “get rid of carbon based energy.” So, they have put the stranglehold on new production, refinery capacity, etc. They don’t care about the consequences. In fact, it serves their Marxist agenda to have the economy collapse, so it can be the end of American economic power. Then, the triumph of the proletariat. The “little people” can take over and put in place their socialist programs and command economy. And we can all ride bicyles, horse and buggies. No factories to spew pollution. We can all have “green jobs,” whatever they are (ask Obama–he keeps talking about them).
June 24th, 2008 at 5:27 pmOil companies make about 4 cents a gallon profit. Wonder where the 3.96 goes? Not to the oil companies, that’s for sure!
June 24th, 2008 at 5:29 pmSorry but this article is just wrong. I’m all for putting straws in the ground everywhere there might be oil; offshore, ANWR, etc. to increase supply. As well as more nuke plants and whatever else it takes to become energy independent. It’s criminal that a country as resource rich AND technologicall advances as ours in this position at all.
June 24th, 2008 at 5:39 pmBut the fact is that the “risk-management” the author is talking about IS investors AND OTHERS hedging against a falling dollar by betting on the increase price of oil.
Why the fuck else are pension funds in a normally volatile commodity market?
The author admits as much (and actually quite a bit more) when he says…”It’s true that speculative positions in oil have jumped from 37% of all oil traded in 2000 to 70% now.” He just doesn’t complete the story.
Another thing he says is.. “As for speculation, one tell-tale sign of market manipulation is a buildup of inventories kept off the market to keep prices high.”
Well, the Russians and, to a lesser extent, the Saudis, are doing just that. Where’s the best place to keep it? In the ground.
This is a narrative that can defeat us if we don’t agree with it, add it to our own energy ‘plan’ and do something about it.
How fast they forgot what the Big Oil Companies told them…They - the Reps. are at fault…
This is an enlightening video. Rep. Maxine Walters vs Big Oil. You’ll be surprised she actually said what the liberals have been trying to hide for 40ish years now.
http://twana.vox.com/library/post/congress-vs-big-oil.html
June 24th, 2008 at 6:01 pmThe Caribou weigh in at Nose on Your face. Too Funny.
June 24th, 2008 at 7:12 pmhttp://www.thenoseonyourface.com/
“But John the oil might spill!” Good!! That might add a little taste to the f***ing snow we eat 24/7! Do you know what else caribou in this part of Alaska eat Ms. Pelosi? We eat our own turds. Do you know what we nosh on when we get sick of our own turds and want a little variety? We eat our friends’ turds.
This Congress epitomizes the phrase “The Do Nothing Congress.” Under democrat control they’ve passed no meaningful legislation and don’t want to pass any. They just want to look like they’re working by attacking Bush whenever there’s an opening, take trips to foreign countries on taxpayers money, and just debate anything and everything but avoid taking a position and voting on it. Democritiots all!
June 24th, 2008 at 11:06 pmthey’re so out of touch they dont see America is crumbing, all for the sake of their green agenda
June 25th, 2008 at 4:31 am