Comments on: US Top Trade Groups Already Demand an End to Oil Speculation, but Why Congress Not Act and Media Not Report ?

By: Adam C

Adam C — Fri, 06 Mar 2009 21:51:58 +0000

Here’s some quotes from this weeks “Economist” where they argue that “there is little evidence to support” the theory that speculation is a significant part of high oil prices (“Don’t blame the speculators”, p.17):
“the surge in oil futures us not that large…[futures] on NYMEX [are] just 2% of the world’s oil consumption”.
“index funds [and] other speuclators never buy any physical oil…these are bets on which way the oil prices will move… these bets do not affect the price of any oil any more than bets on a football match affect the result”.
“speculators do play a role…based on their expectations of future supply and demand… [hence] the futures market does sometimes signal that prices are likely to rise which might prompt hoarding [but] there is no sign of hoarding”.

In other words, the basics – supply and demand – are still the main factors in setting the price of oil:
“Any attempt to curtail speculation is likely to make life harder for firms and oil more expensive”.

So maybe the answer to your question is that Congress (and the media) are smart enough to heed the advice of experts and not let the short-term needs of people seeking election dictate what could be a horrendously bad decision!

Edit:
Never thought I’d see the day when I am, even a little bit, on the same side as Jello… scary!

By: JOHNNIE B

JOHNNIE B — Wed, 04 Mar 2009 17:50:14 +0000

The Democrats will block anything that might help with the problem. They think as things get worse that we will turn to them so they can Tax us more….

By: Dr Jello

Dr Jello — Mon, 02 Mar 2009 15:15:43 +0000

Ending speculation is just wrong. Why in a free country should the government tell people what they can buy and what they can’t buy?

Face it, the democrats created this problem by limiting the supply of oil. With an ever increasing demand for the product, the cost naturally and expectantly increased.

On top of this, speculators are betting that a supply interruption in Africa, or with Iran will drive prices even higher, or a hurricane in the gulf will shut down the oil fields and again drive prices up.

Speculators are a necessary part of the free market. With prices as high as they are, speculators give the incentive to drill for oil, and motivate people to enter the market.

The problem isn’t the speculators, it’s the government. If the government would allow increased drilling then supply would increase and priced would decrease.

Never forget that this is an artificially created problem by the same people who want to manage your health care.

By: twice bitten

twice bitten — Mon, 02 Mar 2009 12:43:52 +0000

speculation is international.congress has no power over the rest of the world.most large scale speculation is out of london.it moved there when carter regulated it in the us.all con gress could do is damage american investors.which would only exasperate the condition.

By: Richard

Richard — Sun, 01 Mar 2009 09:14:01 +0000

Congress is pandering in an election year. What they don’t want to tell you is there is nothing that can be done, baring making the world more efficient. If you want to end speculation, which the whole market is based on, you’re not going to have a free market economy. How do you people think the market works? It’s all betting (speculating) on the future! It doesn’t matter if it’s a company or commodity. The market is working, better than our pandering government, obviously!

By: chuckufarley2a

chuckufarley2a — Sat, 28 Feb 2009 22:17:29 +0000

While the trade associations are asking for reform, the oil barons, (more commonly known as robber barons,) have no interest, whatsoever, in reform, and, since they have the most money to buy the most congresscrooks, there will be no reforms.

By: -kimber9ly

-kimber9ly — Sat, 28 Feb 2009 21:05:36 +0000

they cant actually tell us the truth- b’cuz then we might stop being sheep