Reason for high oil prices? Speculators. Biggest speculators?

yup. Nothing really to do with old economics of supply and demand, simply greed.

 

As a side note, which companies were the biggest winners in the latest US mortgage bailout with government welfare?

 

That's just great so almost a 1/3 of the cost of gas is directly attributable to speculation and if we add in taxes almost 1/2 the cost of gas is spec and taxes?!? Makes me furious that the City of Kingsburg wouldn't sell me their Rav 4 EV or even consider saving it from the crusher by putting it out to bid. They could have pocket 20-40K profit for the town but NOOOoooooo!

Matt btw isn't supply and demand the reason behind the speculation?

Wildkow

 

Kow, I thought you were a wholehearted supporter of the free market economic system??? Free market means people can buy and sell any commodity they like (providing it's not otherwise illegal) and enter into whatever contracts they like. Speculators are merely gamblers who engage in perfectly legal trading in commodities and/or contracts to buy or sell commodities at a specified price on a specified date. If this causes you to pay double for gas, they have not broken any law. It's just capitalism as America has always done it.

The alternative is to pass laws limiting people's rights to engage in commerce.

For the record, I oppose capitalism, and this kind of thing is just one of many reasons. But if you support capitalism and such staunch capitalists as G.W.B., then you've got no grounds to complain if the speculators are (legally) removing money from your pocket. After all, you are free to speculate on oil or other commodities too, if you like. :target:

 

To bad Daniel, Capitalism is why you have your computer and Prius.

You are correct about the speculators, bu the reason they can speculate so much is because we don't have any (or enough) oil exploration occurring in stable regions of world. ie the U.S.

"The power to destroy a thing is the absolute control over it" and enough of the oil production occurs in unstable regions of the world where the governments or other rogue groups can inflict enough damage to the flow of oil to dramatically raise costs.

 

Its not so much who is speculating thats causing the rise.
It works both ways in commodities .Puts and calls.
Players are betting on both up and down movement.
That being said the extra $60 per barrel is because everyone is speculating on anticipation of an attack on Iran.
If that doesnt happen ,oil will drop to $70.If speculators thought an Iran conflict was off the table, speculators would all move to the "Put", short side ,betting on a price drop.
Then ,if we were to end the Iraq conflict( with regional stability) oil will be $40.
Bush screwed it all up and is 100% responsible.
Bushs buddies in the oil industry and oil service industry are set for life and longer.

Bush Sr controlled the market assuring cheap gas before elections.Bush Jr used that tactic in 2004.
Its very unusual that Bush cant or wont control the gas price now.
The GOP normally wants $2 gas, for months before an election to assure a win.
This election, Bush is just trying to squeeze every last drop of profit for his main constituent, the oil companies.And leave an Iran attack on the table
He put us $ 9 trillion in debt and gave us $127+ barrel of oil.
Good Riddance Bush.

 

no

 

Of course it is. And don't forget my Zap Xebra. I've always said capitalism is great if you've got lots of money! That does not make it fair or just. The folks who do the hardest, most back-breaking labor get paid the least. The folks who make the decisions that drive our economy into the toilet get paid the most. And people like me who happened to get money from their folks (I was 55 when I came into money: before that I just got by) can live a life of fun and leisure.

But Kow always says he believes in capitalism, and then he complains about the business-as-usual capitalist manipulations of the oil market that enrich the speculators and make him pay more for gas. He can't have it both ways. Honesty and capitalism are mutually exclusive. I'm enjoying capitalism enormously. But I know full well that most of the world would be far better off with a just and honest economic system.

 

Let's not forget that the falling value of the dollar, increased demand in China and India have also added to the increase in the price of Oil.

Also it's been recently reported that Iran is stockpiling oil in large tankers to further shorten the supply. Wait until that crazy man in Venezuela decides to do the same thing.

 

How many days is that good for?

 

NOTICE THE DATE:


Benicia refinery owner says no to Saudi offer - East Bay Business Times:

Friday, May 14, 2004 <<<<<<<<<<<<<<<<<<<<<<<<<<
Benicia refinery owner says no to Saudi offer
East Bay Business Times - by Mike W. Thomas

A pledge by the Saudi Arabian government to invest in the development of two new oil refineries in the United States was met with relative indifference from the nation's largest oil refiner.

Mary Rose Brown, a spokeswoman for Valero Energy Corp., says the current economic situation does not justify an investment in new oil refineries even with financial support from the Saudis. That's the case because the company can still purchase existing refineries for as little as 10 percent to 20 percent of replacement costs.

On April 27, Saudi Arabia's Minister of Petroleum and Mineral Resources, Ali bin Ibrahim Al-Naimi, made a pledge of support while speaking at the U.S.-Saudi Relations and Global Energy Security conference. The event was sponsored by the U.S.-Saudi Arabian Business Council and the Center for Strategic and International Studies.

"On this occasion, let me state emphatically that Saudi Arabia is willing and ready to invest in two new refineries and their associated marketing facilities in the U.S. to help alleviate some of the bottlenecks in product availability," Al-Naimi said.

Al-Naimi said the reason for the current spike in gasoline prices is not due to a shortage of crude oil in the market, but due to market speculation, refinery bottlenecks and environmental regulations.

Al-Naimi said the offer to invest in new refineries in the United States is part of Saudi Arabia's pledge to keep oil prices between $22 and $28 per barrel to stabilize the world's oil market.

 

Reported by who? The Weekly World News, or the National Inquirer?

They could accomplish the same thing (i.e. reduce world oil supply by maybe a tenth of a percent) by cutting back on production. Then they would not have to pay rent on the tankers. I'd say your report is highly suspect.

 

I agree with the weak dollar & increased demand in China and India theory. Iran and Venezuela are wild cards

 

What do you suggest?

Wildkow

 

I suggest that every person in the country be taxed a penny a year and the funds be deposited to my bank account. Maybe then I'd be rich enough to have a mansion with a swimming pool surrounded by bathing beauties.

If I was poor I'd suggest an economic system where the workers, by virtue of their labor, share equally with the investors in the ownership of the means of production. Half the directors of a corporation would be selected by the investors, and half would be selected by the employees, with a chair elected by the employees to break ties.

I'd further suggest a ceiling of 25 times minimum wage for any management position and a minimum wage of $20 per hour (May 2008 dollars) adjusted for inflation each time the cumulative inflation reaches 1%.

And I'd suggest free health care and prescription medicine for everyone, paid for out of general revenues.

And I'd suggest that corporations be deprived of the political rights accorded to individuals.

(Those last two I suggest anyway, even though I'm not poor.)

 

I see this current oil debacle as a "bubble", just like the housing market. Of course, starting a "war" in a region that controls over half of the known oil reserves is also a good reason for prices to spike.
Speculation?... yes, when you know that at any moment Bushie Boy" could press the button plunging us into WWIII. Saudi Arabia and UAE, as the main wheels in OPEC, have the ability to use oil prices as economic warfare. Don't bet that they're not doing that either! For some reason, somebody went and started a war in their back yard! Seems funny, every time Bush shows up at the Saudi Palace with his "scrotum sack" in his hand, it leads to higher oil prices the very next day. I've said it many times, "two oil men in office, and we can't figure out what the problem is?" I agree with mojo on this one... "Bushs buddies in the oil industry and oil service industry are set for life and longer."
I agree that oil is a "finite" resource, and a more long term eco-friendly source of energy that will support the "masses" is needed sooner than later. We need to move away from carbon-based fuels, and face what it's doing to our environment. Maybe facing it now, whether it be by economic warfare, shortages, and speculation is the way to go, sparing us the total collapse of our system later.

 

Saudi Arabia tried in 2004 to keep oil prices low, but were turned away by the oil companies, they made the offer again to GWB and the oil companies right after Katrina, both turned them down.

Saudi Arabia could see what the problem was, the oil people in this country didn't want new refineries, the only thing that would keep prices low. What do you think prices would be right now, if the oil "traders" saw new refineries being built in this country, even with a falling dollar, again caused by GWB, I suspect prices would be much lower.

And thats the main reason prices are high, the US oil companies and GWB don't want lower prices.

 

Would you want lower oil prices if your income was directly proportional to the price of oil? Farmers want higher prices for wheat; coffee growers want higher prices for coffee; oil men want higher prices for oil. If the CEO of Starbucks got elected president, coffee prices would soar.

But speculation, supply & demand, the falling dollar, the quasi-monopolistic nature of the oil industry and our economic dependence on oil, and other capitalist market forces all play their part.