What is Digg?454 Comments
- BobOki, on 06/09/2008, -23/+309This needs to be front page. This is a semi-decent explanation of why gas prices are so high.
I am tried of the idiots on the supply/demand train. We have more supply than demand, and yet the prices still go up = market manipulation. - inactive, on 06/09/2008, -24/+158***** speculators, get a real job.
- junk, on 06/09/2008, -4/+77Stories like this remind of the "I drink your milkshake.." scene in There Will Be Blood. Except... the analysts' straws go in to the future, none of what they are sucking is real and they don't sleep in their private bowling alleys as much.
- WBWB, on 06/10/2008, -6/+75Great article. I'm not surprised to see Morgan Stanley named as one of the giant banks that are ***** things up. They're the ***** who last Friday predicted that oil will reach $150 by July 4 "due to demand in Asia" and thus caused it to go up $11 to $139. By the end of the day the gas stations where I live had jacked the price 22 cents. ***** you, Morgan Stanley and all other speculators.
- johnj21, on 06/10/2008, -5/+61Other proposed headlines for this story:
60% of taday's oil price is 80% speculation
Perhaps 60% of today's oil price is pure speculation, but that's just speculation - jdubdub, on 06/10/2008, -11/+58The only problem with the oil bubble, compared to the housing bubble, is that this bubble is seriously pissing off the whole world every single day they fill up... I think that if this continues, global revolution is nigh.
- rzxc, on 06/10/2008, -9/+49By lowering interest rates and giving money to banks, the Fed has allowed this to happen. People expect inflation. They must invest in things that will not lose value during an inflationary period. (e.g. oil and food). Of course, that raises the price of oil and food. Inflation becomes a self-fulfilling prophecy. Also, lowering interest rates substantially below the EU's forced investors to move their dollars into the Euro, which has killed the dollar, and therefore raised the price of oil and food. Many people thought that a slowdown in the U.S. economy would result in a worldwide slowdown, which would cause the EU to lower interest rates. That hasn't happened. Actually, I wouldn't be surprised if all the money that went into Europe actually helped its economy. Of course, the real loser is the consumer who has to pay more for gas and food. The Fed does seem to understand what it has done. Today, I heard that the Fed may raise interest rates. Also, Secretary Paulson said that we might intervene in the currency markets.
- netdroid9, on 06/10/2008, -4/+41They do have a real job, speculatively speaking.
- inactive, on 06/10/2008, -2/+38How do you explain a doubling of the price in the past year without any significant change to the supply / demand equation.
How about a $15 increase in two days, simply because somebody said something? - XanderDee, on 06/10/2008, -2/+28Question why do speculators buy oil?
Answer: The Federal reserve is printing money like crazy and diluting all money in existence so speculators want to protect their wealth form debasement.
Question how can we stop the speculators from increasing the price of oil?
Answer: The Federal Reserve must raise interest rates to a high enough % so that people like me would move our money into bonds and not oil.
Question so why are they not doing that?
Answer: If the fed raised interest rates, big name banks would go under as more people would default on their home and the $600 Trillion ($600,000,000,000,000) derivatives market will explode, taking down retirement funds, investment banks world wide.
Question so what is the solution?
Answer: Print money until rapid inflation sets in to raise home prices, this starts with commodities once "speculators" make enough "currency" they move the "currency" back into houses and other deflating assets. - brownfallleaves, on 06/10/2008, -3/+25
speculating on speculation - inactive, on 06/10/2008, -2/+21Don't worry higher oil prices just means:
1) More money for OPEC nations
2) More profit for Oil companies
3) High cost of fuel
4) Higher cost of food
5) Higher cost for other forms of travel
6) Inflation on everything else.
7) Less economic growth/stagnation
8) Devaluation of shares.
9) Protests/blockades/riots
10) More incentive to fight for oil
Did I miss anything out? - grey580, on 06/09/2008, -19/+38Tell all your friends guys please. Everyone needs to know. It needs to be Main Stream news.
- beakerwimp, on 06/10/2008, -0/+19FTA: A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.”...The Senate report was ignored in the media and in the Congress...
Every now and again it would be awesome if public servants served the public for a bit. - radink360, on 06/10/2008, -8/+26I've been saying this all along. It's all BS. There's no ***** shortage. It's all made up by the powers that be to make billions and billions of profits.
- spunkmyer, on 06/10/2008, -3/+21Oil jumped back $3 bucks for far this morning from losses from yesterday when both Merrill Lynch & Co. and Citigroup Inc. both saying oil will go up. Self fulfilling prophecy here folks. Talk to your congress rep and get them to move on the commodity market review and close the enron loophole.
- tinkafoo, on 06/10/2008, -0/+18The price of oil is driven by speculation? They just now figured this out?!
Okay kids, what did we not learn from Enron? - rolf, on 06/10/2008, -4/+22Speculators have been around for a long time in many industries. They are usually get crushed by a crash after a huge run-up.
Although, as a solution, I would say that the only ones who can speculate are those who will take actual delivery of the crude.
I don't see a reason for people who never plan on taking delivery to be able to bid. That isn't free market; you are not a buyer or seller: just a leech. - samoan27, on 06/10/2008, -4/+22Finally a real article about the price of oil, none of this "It'll be $10 / gallon by 2012" crap. It's a bubble propagated by fear and those willing to exploit it, anyone who really thinks the price can only go up doesn't need to look too far back in history to know investing in oil isn't a wise long term investment right now.
- inactive, on 06/10/2008, -0/+17The dollar plays a part in it. But since the dollar has fallen only about 10-25%, why has a barrel of oil quadrupled?
- duggdowncatisad, on 06/10/2008, -2/+19Two can play this game.
I PREDICT THAT BY THE END UP SUMMER, OIL WILL GO DOWN TO $20 A BARREL. - Pittance, on 06/10/2008, -0/+16Going slower uses less gas. Unless you do 5mph. Going 50mph is much more efficient than 70mph. Even over the same distance. So what statement are they making again?
- tbstudee, on 06/10/2008, -3/+19dugg because I'm tired of them as well.
- MisterEX, on 06/10/2008, -0/+16Well, you can store up to 15 barrels of oil on my lawn. Anyone else?
- domokunt, on 06/10/2008, -0/+13FYI Oil was at almost $50 PB a year and a half ago.
- sandiegodude, on 06/10/2008, -5/+18I'm up over 200 bucks a week now in gas. It's killing me. What I used to funnel to savings from each paycheck now goes into my commute. This is getting ridiculous. Its not like I drive a gas hog, I just have a 45 minute commute in each direction every day, and unfortunately its at odd hours, so I can't use San Diego's (*****) Mass Transit options. Gas prices are up to 4.50 a gallon here in cali and still rising. Its ***** awful. If the prices keep going up, I'm going to need a raise just to keep making it to work, as I'm teetering on "breaking even" at this point because of goddamn fuel costs!
- wynja, on 06/10/2008, -1/+13By your own words, $1 per gallon of gas is going to speculators presently. That's with your low ball number of 25% being contributed to speculation. If you'd bothered to read the article, then you'd know that it's impossible to say how much of the cost of oil is due to speculators because firms are not required to report their trading of oil futures over the electronic wires...... BTW the price of oil has doubled since this gaping hole was introduced in January 2006.
Drilling in Alaska and off the cost in the Gulf is not the answer, as neither will provide but a drop in the bucket of world wide oil production.
Oh, and the feds have not stopped the building of oil refineries in the US. Oil companies have refused to build refineries that live up to modern environmental codes. FYI, there is a new refinery being built in SD as we speak.
Valdez Alaska is not the cleanest place in the world (http://www.usatoday.com/news/nation/2007-01-31-exx ... In fact, Exxon has failed to repay the state of Alaska and the federal government for the clean up efforts after the great disaster in 1989: http://logicalscience.blogspot.com/2007_02_01_arch ... http://seattlepi.nwsource.com/local/262707_exxonse ... http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spil ... - HorusHeresy, on 06/10/2008, -0/+12I don't know why you are being dugg down. Inflation is directly correlated to money supply and lowering interest rates/running the printing press constantly adds to the money supply. In many parts of the world, the gas prices haven't gone up by a ton, because of the fact that the euro, among other world currencies are climbing against the US currency. The Euro has doubled.
- IPublius, on 06/10/2008, -2/+14Market manipulation, yes, but also a supply and demand issue. In this case it is an artificial demand, but when you are trading for something that doesn't exist yet (futures) perception can distort or become reality.
I am not disagreeing with anything that was said in the article. I found it to be very enlightening. I would like to point out though that supply and demand is still very much in effect, something the author mentioned as well.
What needs to be examined is not whether supply appears to be tighter, but what is driving the perception that it is. - FairDinkumMate, on 06/10/2008, -10/+22100% of this article is speculation that 60% of today's oil price is speculation.
FTA - "In June 2006, oil traded in futures markets at some $60 a barrel and the Senate investigation ESTIMATED that some $25 of that was due to pure financial speculation".
It then takes this one ESTIMATE from 2006 to extrapolate(with NO FACTS or DATA to support this extrapolation either!) "That would mean today that at least $50 to $60 or more of today’s $115 a barrel price is due to pure speculation".
NO - That would mean that IF that 2006 estimate was correct & IF the value of speculation per barrel increased significantly(to keep the same percentage) & excluding ANY other factors then today's price of $115 a barrel COULD be made up of $50-$60 speculation.
He then goes on to LIE about supply & demand. “Over the past couple of years global crude oil production has increased along with the increases in demand; in fact, during this period global supplies have exceeded demand, according to the US Department of Energy “
REALLY? According to the US Energy Information Administration(US Gov't Official Energy statistics):
2006 global production(in millions of barrels per day) was 84.60 while consumption was 84.62 = a net undersupply of .02 or 20,000 barrels per day.
2007 global production(in millions of barrels per day) was 84.60 while consumption was 85.40 = a net undersupply of .8 or 800,000 barrels per day.
2008 global production(in millions of barrels per day) was 86.60 while consumption was 86.61 = a net undersupply of .01 or 10,000 barrels per day.
SOURCE: http://tonto.eia.doe.gov/cfapps/STEO_Query/steotab ...
So it looks to me that supply hasn't exceeded demand since 2005! Hardly the “past couple of years” the author refers to.
It drives me absolutely nuts that this was written not by a blogger with a view to push, but by someone claiming to be a “journalist” writing as part of an independent research and media group of writers, scholars, journalists and activists. I have SERIOUS doubts about his 'independence' and will be spending a little time having a look.
Seriously, I have seen better researched & presented arguments in Digg comments than this guy makes in this article! - richmomz, on 06/10/2008, -1/+13At least there's someone out there that gets it... it's INFLATION! Not speculators, or gas guzzling SUVs, or the war or peak oil... etc. The problem is that our currency has lost more than half its value in the last 10 years. Take a trip to the grocery store and think back at what things USED to cost in the 90s. You will find that most items have doubled or tripled in price in the last decade, and it aint because of people speculating on Lucky Charms futures. Look at health care costs (triple). Look at tuition (triple, if you're lucky). House prices (depending on where you are, roughly double what they were in the 90s, even after the bubble burst).
Everyone is pointing fingers everywhere except where the problem actually is: the Dollar. - Waiting2awake, on 06/10/2008, -1/+13Who is going to make those investments when big Oil and Finance have all the cash?
I remember a few years ago when oil was at $50US/Bar , and study after study done from both pro and con sides said that renewable energy simply wasn't viable until oil hit between 60-70 a barrel.
Here we are, renewable tech has only come down in price and up in efficiency and oil is $120-$130US a barrel - and study after study is telling us we are "almost" there.....
Then you figure out who owns all the rights and patents on these renewable energy things and they are primarily oil companies.
All of a sudden it appears that they are merely using the renewable energy thing as a carrot moves an ass. They have the rights, and it is in their best interest to keep those techs away from general consumption... - joe122370, on 06/10/2008, -1/+12just wait and see what happens in epic failure we call Congress this week. They are actually talking about adding another $2 per gallon in taxes to, get this "stop global warming"! Plus they are talking about raising taxes on the oil companies and windfall profit tax. Guess who's going to pay for that? not the oil companies, they'll just raise the price on the consumer! Stupid f'n politicians!
- Mortikhi, on 06/10/2008, -3/+13You're an intern, which is synonymous with "you don't ***** know *****".
Come back when you're CEO and have the inside details, stupid ass. - inactive, on 06/10/2008, -0/+10as someone said in an earlier story about this subject; the speculators lost their shirts in the subprime mess (they made) so they have to make up the loss somehow
- inactive, on 06/10/2008, -2/+12Isn't it possible to get rid of the speculators? I'm sure OECD countries would like to do that but OPEC are having a field day at the moment and so are these people working in the oil/finance industry.
It kind of sucks how they are manipulating the whole worlds economy and leeching off billions of consumers. Also retarded finance institutes predicting $150~200/barrel doesn't ***** help eithor. - skidooer, on 06/10/2008, -1/+11It's still supply and demand. It's just that the demand isn't based on usage.
- LordRedSnake, on 06/10/2008, -0/+9Laying the blame at the feet of the 4 Anglo-American oil companies is just absurd. These companies are a fraction of the size of OPEC and other state-owned oil companies that are responsible for the majority of the world's supply of oil. OPEC sets the world price for oil, our so called 'big oil' companies do not.
The other major contributing factor here is the falling value of the dollar and uncertainty in the stock market. Investors are dumping their cash into commodities like oil to hedge against a potential recession. You can call them speculators all you want, but even speculators don't act without incentives. The real exercise here is to determine who is responsible for these perverse incentives. - regeya, on 06/10/2008, -1/+10I've got your supply and demand right here.
http://seekingalpha.com/article/47541-the-oil-scam ...
Anwar and tar sands won't cure collusion. - HotSaucePanCake, on 06/10/2008, -2/+11I agree, what is really sad is driving shouldn't be for the rich only... And i guarantee the rich are just as fkn pissed.
- inactive, on 06/10/2008, -0/+9"Although, as a solution, I would say that the only ones who can speculate are those who will take actual delivery of the crude."
That's how it was before Enron lobbied the CFTC to slightly deregulate oil futures trading. - inactive, on 06/09/2008, -20/+29Oil Speculation and Israeli Sabre Rattling:
Israeli Minister Shaul Mofaz triggered the largest one day dollar gain in the price of oil in history with his remarks that attacking Iran is "unavoidable". Did oil speculators have advanced warning that he was going to make such a statement? Ask Congress to investigate.
http://digg.com/political_opinion/Oil_Speculation_ ... - jjgasp, on 06/10/2008, -1/+9Nothing personal, but you could move. Live where you work or work where you live. I think over the next twenty years, the "suburbs" will greatly devolve.
- craighoxton, on 06/10/2008, -7/+15Thanks hedge funds! Because of your insatiable greed (which they call "generating alpha") and the complicity of financial market infrastructure (investment bank-run prime brokers, powerless regulators, clueless ratings agencies) and offshore centres who act as financial flags of convenience where these funds are domiciled for tax purposes (the Caribbean mostly), you've driven up commodities prices across the board - the Third World feels the pinch now, but it'll follow-through to the Developed World later.
And for what? Just so your Lamborghini has another coast of wax, your trophy girlfriend has firmer ***** and you can to-up your escape fund for when you tire of finance you can set up an artisan bakery in a trendy part of New York/London and get your pal at Wallpaper! magazine to write about it.
Unplug your Bloomberg machines and take a look around... - ghuytro, on 06/10/2008, -0/+8I saw "Enron: The Smartest Guys in the Room" on TV last night - first time seeing it.
I wonder about the similarities to what the Enron energy traders were doing in manipulating the California energy crisis.
http://news.bbc.co.uk/2/hi/business/1972574.stm
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2
http://en.wikipedia.org/wiki/California_electricit ...
Here's a tidbit illustrating the kinds of things that went on:
"The transcripts released Thursday, laced with profanity, show Enron traders apparently manipulating California's power market. In other calls, traders complain that their bosses are crooks.
One transcript includes an Enron trader, identified by the utility district as Bill Williams, calling an operator at the company's 52-megawatt Las Vegas power plant on Jan. 16, 2001, and asking that it be taken out of operation the following day.
"We want you guys to get a little creative ... and come up with a reason to go down," he says in the transcript.
The plant ceased operation the next day, as blackouts hit California. " - CanIGetAWitness, on 06/10/2008, -0/+9People would of thought the same thing for the Enron Traders, but some of them are among the richest people in the world. I remember seeing a billionaires list and a former Enron Trader was one of them.
- inactive, on 06/10/2008, -0/+8And like housing this bubble will burst...
- inactive, on 06/10/2008, -0/+7And so is the supply of houses.
- saigumi, on 06/10/2008, -0/+7Take the money and run? Screw whoever you can and then let the tards defend you saying "Well, that is capitalism."?
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