What is Digg?15 Comments
- bosssmiley, on 06/24/2008, -0/+22Interesting. Makes you stop and think about who the *real* price-gougers are.
Speaking as someone from the UK who lives under a 66% fuel tax regime (that's right, govt gets 2/3rds the price at the pump in tax and duty) I know who I blame. - Kent4jmj, on 06/24/2008, -0/+15More info from another source.
"Recall that oil jumped almost $15 on Thursday, June 5, and Friday, June 6, largely in response to Middle East war worries. In fact, on Friday, June 6, stocks plunged 400 points as oil jumped $11 to close at its peak price of $140 a barrel. It was this oil spike that helped trigger various Washington and presidential-campaign attacks on so-called oil “speculators.” But what the heck? Anybody with half a brain operating in the oil markets who thought there was going to be an Israeli-Iranian war would be buying spot and futures contracts — which is exactly what happened." http://kudlowsmoneypolitics.blogspot.com/
Also
But I want to make a separate point. Oil-market traders react rationally to new information. Instead of blaming them, senators McCain and Lieberman might want to visit with some traders on some of the big Wall Street trading floors to better understand the relationship between global news and price discovery.
There’s something more here. Democrats reading from their talking points are completely opposed to Bush and McCain proposals to open up new oil drilling offshore and onshore. The Democratic argument — which I heard again last night on my show from Robert Reich — is that it will take ten years to lift new oil, which will never help today’s price problem. Obama says exactly the same thing, as do Harry Reid, Nancy Pelosi, and all the rest. But they’re forgetting the role of oil traders.
Oil futures markets have contracts that run out five years and beyond. If these traders — or “speculators” — believe new oil supplies are on the way in the future, they will sell those out-year contracts. And before long market arbitragers will backward-ize those price drops toward the spot market, bringing prices down there as well.
In other words, trader/speculators can be very handy instruments of energy (and economic) policies. If demand exceeds supply they are buyers. But a prospective future supply increase makes them sellers. In a free market prices move both ways. And if Sen. McCain would take the time to learn this he could respond accordingly to Obama’s silly criticism that we shouldn’t drill because it will “take too long.”
This is all part of the key point that McCain can turn record energy prices to his political advantage, as polls now show 65 percent, or two-thirds, of the public favors drilling. But to do this the whole GOP must understand the role of oil traders and their speculations. - jhodapp, on 06/24/2008, -0/+13That's insane! I'm glad I live in the U.S. then! But I won't hold my breath in us catching up to the U.K.'s tax level.
- inactive, on 06/24/2008, -1/+8Oil prices have gone up because the Fed has increased the money supply by more than 73% since the year 2000. The government is just trying to scape coat oil companies.
- reland1, on 06/24/2008, -0/+7it's all BS..keep the people fearing SOMETHING at all times! Ayone ever heard of Breton Woods?
- legolas68, on 06/25/2008, -0/+7OPEC nations are spending their revenues as fast as it comes in. The economies of the bigger players in OPEC are built almost solely on pumping oil from the ground. Every barrel we can put on or threaten to put on the market from domestic supply will cause them concern. And it will cause them concern immediately. We need our big oil companies to have the leverage to show that they are capable of finding and drilling for oil whenever and wherever.
I don't give a hoot if the nay-sayers spew the leftist party-line that the domestic oil we pump isn't guaranteed to be sold domestically. It's a simple rule of global supply and demand. With futures contracts it's even easier as it's a simple rule of global supply and demand "projection". If it takes 5 years to get this stuff out of the ground it won't necessarily take 5 years for it to affect the market.
Drill now, drill often. - stienster, on 06/24/2008, -0/+4I'll say it again: Agenda 21. If you believe (like I do) that Obama and McCain are CFR boys to the core, then they'll use their campaigns to promulgate it's goals, without outwardly exposing (or having to answer on) this globalist control scheme. McCain says now "let's drill", and Obama thinks it's much safer to hold out for OPEC salvation. We The People get to pick a side, rep/dem, and neither will do anything other than what the puppet masters have already determined, a/k/a "Agenda 21: Sustainable Development". Isn't evil brilliant?
- Kent4jmj, on 06/25/2008, -1/+3It can't be that powerful or they would not be taking it in the shorts either. The massive regulations and taxes they live with are an undue burden.
- rorster, on 06/25/2008, -0/+2Is the phrase "working schmucks" your way of saying Proletariat?
- libr3volution, on 06/28/2008, -0/+1The real solution to lowering oil prices is to remove Government regulation from the economy, allow a free market and true capitalism and allow the market to sort itself. This is how America was originally intended and it's how it should be. It takes something like 5+ years for a new refinery to be built in the US because of all the red tape, required to get the "right" to do so. The government has basically allowed the big oil companies to control the market because they refuse to allow off shore drilling and the cost of going through their red tape to build more refineries is completely and utterly ridiculous!
- EvilCapitalist, on 06/30/2008, -0/+0Dugg for mises.org source!
- inactive, on 06/25/2008, -2/+2The oil companies have a powerful lobby on Capitol Hill. We working schmucks don't. That's how they get away with stupefying profits every single quarter, and we working schmucks take it in the shorts. That's business as usual.
- EvilCapitalist, on 06/30/2008, -0/+0legolas68: Add to "drill now, drill, often", drill ANWR, drill offshore Carolina (lots of yummy methane hydrates).
- jamessavik, on 06/24/2008, -7/+3Does anyone believe that if some one farts in Yemen, oil goes up $10 a gallon? B.S.
It is obvious that OPEC is engineering this by regulating output.
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