"Oil Price Mocks Fuel Realities"

It definitely has an element of truth. Prices are affected by speculation. At some point this bubble will burst, the price will come down some......and then next year the same surge will happen, then burst, then surge.....

The Big Picture has not changed. Speculators are hitting on oil like mad for a very good reason. Peak Oil is a fact. When it occurs is an opinion....till it becomes a fact.

 

The price of oil is about double what it should be based on supply and demand right now. The scandalous part is some of our big pension institutions are mainly responsible for the overspeculation in oil futures. When the bottom falls out, these companies may lose their shirts.

 

Very interesting article thanks for the post!

 

In 2004, Saudi Arabia offered to build two refineries in the US, anywhere, they were turned down. After Katrina, they made the same offer, this time to George W. Bush and the oil industry, not just the oil industry, all with the express purpose of keeping oil prices in the $30 range, supply was not the problem, they were turned down again.

So in 2004 and 2005, supply was not the problem, what happened between 2004 and 2008, nothing, its all fueled by US government instability in foreign relations, US government created instability in the Middle East, US government debt building, and instability in the banking industry, also due to US government oversight hands off policy of the financial industry. Add oil trading speculators to that mix, and you have prices gone crazy.

The worst part of the whole situation is, that not only did our own government work against us, the oil industry and our banking industry did also.

So in conclusion, here is the result of our wonderful institutions looking out for the average American, our government not only keeps increasing our debt, but has added to that debt by bailing out the banking industry, which worked against us, supported the oil industry, which worked against us, created a foreign policy that worked against us, and all of that creating a devaluing of the money that the average American uses to live on, and all contributing to the rising price of a currently plentiful supply of oil.

Whats wrong with that picture !!!!!

 

The last statement

 

Hahahahaha, well its all true.

 

Sadly, that is the long and short of it.

Certainly increasing the price of crude oil was at least part (some would say all) of the motivation of going to war with Iraq. I'm sure it's the same motivation that has us saber rattling with Iran right now.

We elect an oil baron as presidunt, and then wonder why gas prices increase 100+% under his term. Ah ............ where's the disconnect people??????????????

... Brad

 

From the article: At the same time, MasterCard's May 7 US gasoline report showed that gas demand has fallen by 5.8%. And refiners are reducing their refining rates dramatically to adjust to the falling gasoline demand. They are now running at 85% of capacity, down from 89% a year ago, in a season when production is normally 95%. The refiners today are clearly trying to draw down gasoline inventories to bid gasoline prices up.

I have been feeling this is a big piece of the puzzle for sometime. True, speculation and government policy has a lot to do with the problem, however, I believe that artificial manipulation of supplies is also a big part.

While prices may drop somewhat I believe that in the long term, the next year or two, they will continue to climb.

Bob

 

Bingo.

Now why isn't Hillary Clinton getting a fairer shake in the media?
After all, oil was $20 a barrel when Bill was balancing the budget and the stock market was booming. Washington is all screwed up these days--both parties. I just got my $1200 giveaway in the mail today. They just keep printing new money. The dollar is going to pot.

 

wow. lets blame oil companies governments and oil speculators. Blame instead of acknowledge that oil is getting expensive because more people want it in China and India and Russia and elsewhere. If they started a run on Coca Cola it would go up in price too. Until a few new plants were built anyway. Clintons good economy was given to him by the Gipper. Bill handed a dirty dress to Monica and a failing foreign policy to the rest of us. Both parties are dirty in oil and the rest of us just get to pay for it.

 

Sorry Sheepdog, you loose, the RIPPER helped create the problems of today, which would have been much worse if it weren't for Clinton, his management of the budget caused the lull in a looming disaster, which Bush promptly destroyed in favor of a disaster.

Since you seem to follow the party line, explain this:

The Swamp: Saudis boost oil, modestly, Bush rebuffed

But, for the second time in five months, the Saudis have rebuffed the Bush administration's request for significantly stepped-up oil production to ease rising oil prices. The Saudi oil minister said the Saudis already had marginally boosted production by about 300,000 barrels a day, as of May 10, to meet world demand, including U.S. demand, as they see it - boosting production to 9.45 million barrels a day during June.

The Saudis have made it clear that they see no great world demand for increased production, Stephen Hadley, the president's national security adviser, said after private meetings between the president and king at Abdullah's ranch - and they are not bowing for one customer, albeit the world's biggest consumer.

"What they're saying to us is... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy,'' Hadley said.


Bush in Saudi Arabia to beg king to help end oil crisis as prices hit $125 a barrel | Mail Online

Anthony Cordesman, a security analyst for the Center for Strategic and International Studies, said Abdullah may produce something "simply because it's good manners," but nothing that would have a significant effect.

"U.S. influence over OPEC and Gulf oil production is diminished," he said.

"It's not clear what the incentive is to Saudi Arabia. We can't deliver on (Mideast) peace. We can't deliver on arms transfers.

"We can't deliver on the Iraq that Saudi Arabia wants. We are raising problems in terms of Iran. And the reality is the market isn't being driven by us; it's being driven by China, by India, by rising Asian demand."

Jon Alterman, director of the CSIS' Middle East program, said the Saudis, with a public that doesn't like Bush and a ruling monarchy with growing interests elsewhere, are not likely "to put themselves out to help this president."

"The Saudis don't have an alternative to keeping the U.S. in its corner, but their reliance on the United States, their confidence in the United States is extremely shaken," Alterman said.

 

Well doesn't this sound familiar?

The whole sub-prime debacle started as the result of no one objecting to folks being leveraged at 20:1 (or sometimes greater.) That's not to imply that I wouldn't look twice at 16:1, three times, or even twenty times, but then again I tend to be "old fashioned" when it comes to finances.

Look at it this way, and yes, this is going to sound more than a tad smug, your effective leverage is 8:1. That's because as a Prius owner you're using about half the gas you would have otherwise (all the hypermilers just need to work with this, most of us haven't attained your mpg's, nor are we likely to any time soon.)

Does that mean that we won't get bitten when the current market bubble bursts (and it will burst, sooner or later)? I wish I thought otherwise, but I'm afraid the answer is "no". Our "bite" won't be as bad, but it's still going to hurt. The best we can hope for is that not too much of the rest of the economy comes down in the crash. (OK, yeah, I know that's not realistic.)

I know that our European brethren think we're whining about this. But I think that they're forgetting that Europe has better public transport buffers and I also think that they've never had to deal with a market that's leveraged to the extent that the current one is.

I wish that I had the confidence to say that I thought we were going to navigate this without running aground, but I don't....