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What to Do About the Price of Oil
Is Big Oil ripping off consumers? Are Wall Street speculators manipulating oil markets? What should be done?
Whether or not Big Oil is improperly restricting refinery capacity, whether or not Wall Street traders are driving up the traded price of oil to heights completely disconnected from supply-and-demand fundamentals, a few things are clear about gas prices -- and so is the most appropriate, immediate policy response.
Current pricing arrangements are generating profit gushers for the large, integrated oil companies -- ExxonMobil, ChevronTexaco and the like. While the price of oil is going up, these companies' drilling expenses are not. Oil can trade at $40 a barrel, $90 a barrel, or $130 a barrel. It still costs ExxonMobil and the rest of Big Oil only about $20 to get a barrel of oil out of the ground.
The oil companies' staggering profits are a windfall of the purest sort (Websters' definition: "an unexpected, unearned, or sudden gain or advantage"). This is not a moral judgment about the oil companies, it is just a description of what's happening.
A windfall profits tax could generate substantial government revenues. Allocated to investment in renewable energy, it could significantly increase funds directed to renewables, and be a small but important down payment on the massive investment needed in mass transit, energy efficiency and renewable energy.
Beyond the immediate future, it is important to get a better fix on energy markets. What's clear now is that the U.S. refining market is very concentrated, thanks to a series of mergers permitted by antitrust authorities; and that oil and energy futures markets are dangerously unregulated.
Just five large oil refiners now control over half of the U.S. market, and the top 10 control over 80 percent, according to Public Citizen. There is very good evidence that the refiners have worked in the past to limit supply and drive up price. Whether this is an ongoing issue is perhaps less clear, given that independent refiners are now facing profit squeezes.
Still, for the medium term, either the government needs to scutinize refinery activity much more closely, adopt new regulatory authority and aggressively enforce antitrust laws, or it must intervene to deconcentrate the market.
Meanwhile, oil and energy markets have mutated in dangerous fashion over the last decade. At Enron's instigation, these markets have become largely deregulated in the United States. Leading Wall Street firms like Goldman Sachs have subsequently bought up oil transport and storage operations -- not because they are looking for new business outlets, but because they want insider knowledge about oil and gasoline markets. Meanwhile, investors large and small are pouring money into oil as a tradable commodity.
Are these markets being manipulated? Perhaps. But even with no manipulation, the intensified financialization of oil trading subjects the market to speculative frenzies characterized by sudden and severe price fluctuations. These prices swings have real impacts at the pump and in the overall economy (and much more ominous impacts for oil-importing developing countries than rich nations).
Re-regulating energy markets, imposing margin requirements and lessening investors' ability to trade with borrowed money, and cracking down on market manipulation will all slow the Wall Street frenzy and limit price spikes.
For the long term, however, oil demand will continue to shoot up -- though higher prices and the U.S. recession will moderate this tendency -- and supply cannot keep up. Ultimately, new sources of oil may become available, including from deep water sites and tar sands and shale, but these will be more expensive to obtain.
The world is likely witnessing a long-term, steady (if bumpy) and permanent rise in oil prices. (More on the causes of oil price increases tomorrow.) This price increase will impose major economic hardships, unless there is a massive effort to shift to oil-displacing technologies and renewable energy.
That exactly this shift is needed to address the even more pressing threat of climate change, makes it all the more urgent that Washington adopt a windfall profits tax (and end governmental subsidies for Big Oil) and invest the proceeds in renewables. This is very unlikely for 2008. Will things be different in 2009?
143 Comments so far
Show AllThe answer is so simple. Drill in alaska before the russians steal it with horizontal drilling and drill the the gulf before china steals it through cuba.
It's the War stupid!
Robert:
You fail to mention WAR! End the war in Iraq and stop threatening war against Iran. Do these two things and watch the price of oil drop to $60 per barrel.
It's really that simple.
Then watch the dollar rise, food inflation go down, the trade defecit go down, interest rates stay low, U.S. economy grow, world food riots end.
It's really that simple.
That no one, including the intelligent Obama, can connect the damn dots is beyond me. End the Wars, they're killing our youth and economomy, and making halliburton and Cheney rich.
It's really that simple.
There is no need to write your article for tommorrow, unless you want to copy and paste this post, it's the war stupid.
But why does the gasoline price go up .02 everyday...why isn't price based on the cost to make it like other consumer goods?
According to my calculations gas has gone up about 30 cents a year since bush was elected. Most of his cabinet are or have been big oil bigshots. It's no shock to me that prices have gone up - look where their loyalties lie.
The war is a very convenient way to not only increase oil prices through instability, but to steal the last (cheap) drops the world has and sell them at inflated prices. The bigger war being quietly waged right now is economic. China, Iran, India, Pakistan, and Russia are all linking their energy economies. Euro-NATO and the US is trying to stop this from happening so that they can have the last of the cheap oil before things really get bad. What we have is the making of the next World War which will begin as soon as the US attacks Iran.
Geographically, Iran is the must-have country for both sides - the US wants it for cheap energy and a perfectly situated military outpost. China, India, Pakistan, and Russia wants it to stick around so they get sweet deals on petro. In the middle is all of us, and we are fucked.
"Is Big Oil ripping off consumers?'
Don't know about that, but do know that big consumers are ripping off future generations of humans.
www.StudentsForTheEarth.org
"End the war in Iraq and stop threatening war against Iran. Do these two things and watch the price of oil drop to $60 per barrel."
An extremely tenuous assertion. I would love to hear you support this while declaiming all the other factors.
"why isn't price based on the cost to make it like other consumer goods?"
Because those ar "sunk costs". Check the wikipedia article on Sunk Cost.
Cheney's Oily Cartel is driving the price of oil. Create fear (war), increase demand (war) and reduce supply (war) - Mission Accomplished!
I understand the cost of oil will continue to increase. But the steep increases begun three months ago show no signs of slowing.
At a certain point, the economy will collapse. It has to.
No one is talking about this.
"increase demand (war) and reduce supply (war) "
You can replace (war) in the above with (econonomic growth in India and CHina) and have the same result, although you and I are not quantifying anything. I think that is your problem, suggesting that the conflict in Iraq weighs more or less in comparison to India and China. Can you do that?
we will never see 60$ a barrel again unless someone invents a replacment for oil that does not hurt the enviro.
Buy a hybrid since the American Gov does not allow none gas vehicles to play on a level field.
Get an electric bike and it helps to get in shape when you have to peddle up the hills.
Buy a scooter like a Vespa or small cc bike.
convert your gas car to electric, cost is 3 to 8,000$
Move or change jobs so you can use public transit or bike or walk.
Get together and vote the person you last elected since they are not listening to you.
Counting the days till I live in Canada forever and I don't care if gas cost more from what I hear, the healthcare more than offsets ANY cheaper gas in America.
Remaining oil is too precious to burn and misuse when clean alternatives exist.
"At a certain point, the economy will collapse. It has to."
Sure, if the trend continues unabated. That's not usually what happens though. "Return to the Mean".
"No one is talking about this."
Certainly they are, it's on the front page every day.
jakenewton:
Must you always be the contrarian? Before the Iraq War, oil was at $25 per barrel, today it is at $125 per barrel. World oil demand has not quintupled in the last 6 years, the dollar has not lost 4/5ths it's value in the last 6 years.
Last year the oil execs said that oil should be at $60 per barrel. The speculative mark-up in the price of oil is huge. It is based on instability in Iraq, and threatened war against Iran.
Figuring this one out doesn't require mental gymnastics. Next you'll be saying that the last two hundred years of global warming wasn't caused by man. Oh yeah, I forgot, you don't believe global warming is man made.
Oh well, have fun arguing, simple logic works for me.
The production and delivery of gasoline, heating oil, etc. has become an essential service, the very definition of a public utility. The petroleum industry should be so designated and as such be subject to government regulation at all levels of production, finance, and profits. Any change in production or prices should be approved by a bipartisan commission and an appropriate profit to shareholders guaranteed by decree.
Look what happened in California when electricity was deregulated. Can you say "Enron"?
"Must you always be the contrarian?"
Yes, as long as I think I am right and you are wrong.
"Before the Iraq War, oil was at $25 per barrel, today it is at $125 per barrel. "
Correlation is not causation.
"World oil demand has not quintupled in the last 6 years,"
In the supply/demand formula, demand isn't merely the current consumption levels, it includes speculation about the future. Example, many people I know will always fill up, because they "know" it will only cost more next time. In a situation where they thought it would be cheaper next time, they might just get half a tank. This is basically what happens on the commodity exchnge.
"Last year the oil execs said that oil should be at $60 per barrel."
Who said this exactly?
"Next you'll be saying that the last two hundred years of global warming wasn't caused by man."
Changing the subject. Specifically, a Straw Man argument.
"you don't believe global warming is man made."
Who told yuo this? Certainly not me.
"simple logic works for me."
You just demonstrated above that you suck at it. A Straw Man argument is a Fallacy of Logic. Also, ignoring factors that don't fit your "it's the war" argument, such as demand in China and India, is also fallacious.
jakenewton
April 3, 2008
"Two days earlier, oil executives told Congress that speculation might be responsible for half the current cost of oil. Leaders from five top companies agreed that current supply and demand levels should place the price near $55 a barrel, instead of the roughly $100 a barrel in recent days."
http://money.cnn.com/2008/04/03/news/economy/senate_oil_prices/
Argue with someone else, or with yourself if you prefer, but not me. You'll lose.
Thanks for that clarification Retire Green, I concede your point about what the oil executives said. What about the other points made, then?
"I concede your point "
*Minor* point, that.
Namaste, you can complete Retire Green's as yet unfinished business for him if you like, I don't care. On the table is whether The War is the only explanation needed for high oil prices.
OTOH, your "Poison the Well" post above is a classic example of dishonesty. You shouldn't bother with it, it only makes you look worse than you already do. Discuss the points on the table, or just shut the fuck up.
Yup, Poisoning the Well. Your last post is a classic, and shameful, example:
http://en.wikipedia.org/wiki/Poisoning_the_well
All of you seem to disagree, but at least all of you are paying attention and reading. It's the millions who have no clue and live for who is doing well on American Idol that make it easy for the corporations to slowly strip away our rights and shrink the middle class. For every person putting an opinion on here, regardless of what that opinion is, there are thousands that couldn't tell you what Halliburton is or find Iraq on an unmarked map. That is scary.
Thomas J. Comer
TComer May 29th, 2008 5:48 pm
Now that makes sense. Excellent point.
Seems to me that the occupation and the other reasons mentioned, plus speculation with a good dose of greed explains why oil is priced where it is.
I asked this before but to near the end of a thread I guess and I hate to expose my ignorance, but exactly what is a "troll"?
Look at the numbers. Everything I've read about the increase in demand from BOTH China and India says that it amounts to a 7% increase. Gas prices have gone up by 400%, and that is NOT a number that can add up to being the problem.
The reality IS that it's the war. If it weren't for the war, prices would have gone up, but not nearly to the point they have. If you want to blame anyone, blame those who started a needless war in a part of the world that ships the largest quantity of the very thing you want increased prices on. Ask Cheney just WHY it is that we can't see the minutes of the "energy task force" meetings, especially since we are supposed to be the ones paying for that gov't in the first place.
Is business gouging the crap out of us? You bet they are, and it's with the blessing of the OIL men in gov't. Look to the MONEY, for Pete's sake. It's ALWAYS about money. Anyone who doesn't see that is a fool. It's ALWAYS about the money.
jeez jakenewton, come off it. Anybody with trivial knowledge of econ 101 knows that increased demand exerts upward pressure on prices. Obviously increased worldwide demand for oil has done this.
Seriously, though, something is wrong with you if you don't smell a rat given such a rapid escalation of oil prices. For one thing, the rise of the economies of developing nations has been predicted, whereas the dramatic rise in the price of oil was not. If you did predict it, then why aren't you rolling in cash with your Exon stock? So why has oil become so unpredictably expensive?
What's something that wasn't predictable 5 years ago and still largely isn't? Anyone? Is this not pathetically obvious? But hey, if you want to try to win arguments on irrelevant minutia, arguments with progressively minded people who are at least somewhat responsive to reality no less, knock yourself out. No, seriously.
Good Posts: ARJAY, RETIRE GREEN & WJM.
Dear Namaste: Don't forget: Do not let the buzzing thing throw off the balance when you are involved in Yoga or the Yoga of life (or even dialog in this forum). Blessings, friend.
jakenewton. There's many economists/oil experts who see the Iraq war as causing oil price rises. This link attributes the war to trebling the cost. http://www.bt.com.bn/en/node/42120/print. The American Petroleum Institute (hardly left-leaning) says the same thing. Oil prices rose similarly at the time of the Iranian Revolution and the Iran/Iraq war. Speculators see conflicts in oil zones as reducing future supply, so the price rises accordingly.
"Argue with someone else, or with yourself if you prefer, but not me. You'll lose."
Are you still with us?
"The reality IS that it's the war. If it weren't for the war, prices would have gone up, but not nearly to the point they have."
Do you think the pit traders beleive this? If so, what do you think they would say?
"something is wrong with you if you don't smell a rat given such a rapid escalation of oil prices."
That's fine, and I've thought about it. I've worked with energy traders before. If I were to hear a specific plausable mechanism from one of these traders where prices on a commodity floor could be reliably fixed, then I would be all ears. The closest I've ever heard involves Interlocking Directorates, but all anyone says is that they exist, without specifying a particular one that could be responsible, IOW, specific names.
"Do not let the buzzing thing throw off the balance "
Don't worry about Crayon Boy. He's just pissed that I kicked his ass in another thread. He'll get over it.
The collapse of the economy is on the front page every day?
Hardly
Economic "trouble" is certainly the story de jour.
But the effect on the economy of rapidly rising oil prices, as in at what point it collapses, is very much avoided.
"Sure, if the trend continues unabated. That's not usually what happens though," says Jake.
What's usual about the current situation? Nothing.
Seems to me the industry requires quick and effective regulation. Otherwise it doesn't seem to know enough to get out of the way of the bus.
"There's many economists/oil experts who see the Iraq war as causing oil price rises."
I agree bidelo, the question is by how much compared to other factors, IOW, what is the premium due to the Middle East situation only. Whatt I object to is those who say it is *only* the war while ignoring economic develop ment in China and India as well as other factors, and I especially don't like it when people claim that the price is controlled from smoked filled rooms somewhere as if they had a Price Dial.
"But the effect on the economy of rapidly rising oil prices, as in at what point it collapses, is very much avoided."
People have *always* claimed that collapse is right around the corner, yet collapses are the exception as history shows. The people who say so today have no special inside track on information, they just warn of collapse. That's an opinion they have, and not a forgone conclusion.
"What's usual about the current situation? Nothing. "
Well OK, but every period is unique including today's.
"For one thing, the rise of the economies of developing nations has been predicted, whereas the dramatic rise in the price of oil was not. If you did predict it, then why aren't you rolling in cash with your Exon stock? So why has oil become so unpredictably expensive?"
You must have heard the joke about the economist who was so good he correctly predicted 11 out of the last 5 recessions.
Here is a serious question: What exactly has changed in the Middle East in the last year to cause the price of oil to double in the same period? That in dollars, about 80% in Euros I think.
people people - You're losing focus.
We have a cartel of OPEC producers and large American Oil corporations which have a monopoly on transportation.
This coporations are so strong, they managed to install a dream president (from their perspective) in the white house.
The oil market is NOT a free market, it is a controlled market, and it has a monopoly on transportation (Cur runs mostly on Oil derived products).
The only solution is to diversify the transportation industries to be able to run on diversified energy sources and not exclusively on Oil. (Such as Methanol, Ethanol Biodiesel and Electricity).
Who killed the electric car.
http://www.youtube.com/watch?v=FXSppyTbSyA&feature=related
"The oil market is NOT a free market, it is a controlled market,"
Please explain this statement and be very specific, if you would.
"Who killed the electric car."
The battery has to recharged from the power grid. Where does that power come from?
Here is a list of over 100 oil companies. There are more, this list is incomplete:
http://en.wikipedia.org/wiki/List_of_petroleum_companies
Monopoly?
I think Mr Weissman is missing an important fact when he states:
"Oil can trade at $40 a barrel, $90 a barrel, or $130 a barrel. It still costs ExxonMobil and the rest of Big Oil only about $20 to get a barrel of oil out of the ground."
That may be, but the fact is that a barrel of oil contains the equivalent energy of 24,000 man hours (about what one person might expend in ten years). This means that a barrel of oil, even at $120 dollars, is vastly underpriced. This massive inequality in value has been largely responsible for the profitability and efficiency of the Hydrocarbon culture for the past 200 years. Now that demand is outgrowing supply, the cost of oil has nowhere to go but up.
jakenewton, here are answers to your questions:
1.The oil market is controlled by OPEC.
You can see that by the variant in production output which has no corollation to production capacity or price.
http://www.youtube.com/watch?v=NLRuGUPkyh4
2. Battery recharged from the grid. The grid gets its power from various power plants, such as Coal, Nuclear, Hydraulic, Geothermic, Wind or solar to name a few (No monopoly to a single source of energy).
Economically, - The energy cost of running an electric car, by average, is less 20% of the energy cost of running a similar car on gasoline.
Which means that if today you pay $100 / week at the pump, and you switch your car to an electric car, your cost will drop to $20 or even less in electricity bill.
Environment - The worse case scenario - if the energy is coming from the most polluting source available (Which is coal) - Than the contribution of an electric car in CO2 pollution will be only 55% of the CO2 emission by a an internal combustion car. And as I said before, there is no monopoly in electricity, and not all the power plants are coal plants.
Now jakenewton, I have a question for you. Are you being payed by the Oil industry or by OPEC?
misanthrope - Nuclear fusion energy (Solar) is far more efficient than Oil.
A barrel of hydrogen contains perhaps 10,000 times more energy than a barrel of oil. Which is, by your own calculation equal to 240,000,000 man hour.
The solar energy that hit the earth is about 10,000 times more than all the energy needs of humanity.
Other advantages of solar energy: It's better for the environment, and it's not owned by ExxonMobil.
The money we use has been debased and the rest of the planet has finally figured this out. That imo is a much bigger problem than anything else including this silly unnecessary Iraq fiasco.
According to a 1934 budget book my parents kept,they paid 19c/gal for gasoline, 15c/lb for steak, and bought a spiffy new brick 2br house in a nice Tulsa neighborhood for $4000!
Gold in 1934 was $35/oz.
Dad earned $125/mo as a beginner telephone engineer for AT&T
A bit of head math says gasoline prices have surged the least of these four items.
We must stop printing dollars and/or borrowing from foreigners and dumping it from helicopters. If we don't stop, people will eventually use dollar bills to wipe their ass or for kindling.
"1.The oil market is controlled by OPEC.
You can see that by the variant in production output which has no corollation to production capacity or price."
It's true that they attempt to control price by imposing production quotas. They are often successful at that but not always. But it's a fact that non OPEC nations produce more oil. So how is it that OPEC alone "controls" the market, given that fact?
"2. Battery recharged from the grid. The grid gets its power from various power plants, such as Coal, Nuclear, Hydraulic, Geothermic, Wind or solar to name a few (No monopoly to a single source of energy)."
I agree with you. The varied sources of that power is a very good point. But an increase in electric cars will cause an increase in the draw on the grid.
There is, of course, a very significant power loss across transmission lines, causing inefficiency. This sort of power loss does not exist when a fossil fuel is burned in the motor of the engine of a conventional car. How do you think this should be delt with? You could set up *many* local power plants with say wind or solar, but has anyone crunched the numbers as to how many would have to be cobstructed? Just something for you to think about.
Besides, the electric car is not dead, they are being made and used in a limited fashion. Check wikipedia for various critiques about that film that you may have missed.
"Are you being payed by the Oil industry or by OPEC?"
Neither. I get payed lots and lots and lots and lots of money by *The Neocons* to discuss these things with you and others here at Common Dreams. You must be new here.
jakenewton:
I'm still around. You have no explanations, other than India and China, for why the price of oil has quintupled in the last six years. As others have pointed out - your sole argument is spurious. You argue just to argue. India and China do not account for the price increase, nor do S.U.V.'s, or anything other than speculation. End the war, and the war talk, and the speculation bubble bursts.
Let me make a larger point. What is Obama's problem? Why can't he connect the dots? Why does he not tie the price of oil and the price you pay (I don't own a car) for gas at the pump, to the war in Iraq, and the talk of war against Iran?
McCain supports the war. Clinton voted for the Iraq War, and voted for the Kyle-Lieberman bill, which gives the green light for war against Iran. Why doesn't Obama link their votes to the current pain of the Average American?
The American People would understand this argument. Even if they own S.U.V.'s, shop at wal-mart, and worry about bogus terrorists. This is a simple, and easy, argument to make. The American people would elect him in a landslide. What stops Obama?
p.s. my argument with jakenewton is over. arguing with reactionaries is boring and useless.
"p.s. my argument with jakenewton is over. arguing with reactionaries is boring and useless."
Oh c'mon, how will I lose this argument if you just quit? Try one more time: What exactly has changed in the Middle East in the last year to cause the price of oil to double in the same period?
jakenewton -
1. "So how is it that OPEC alone "controls" the market, given that fact?"
Oil price can be controlled by OPEC even if they controls only 50% of the production.
And I never said that OPEC alone control the price. The increased demand (also by China and India) contributed to the equation. What I said was that the Oil market is not a free market.
By the way - when I said monopoly - I meant that most cars are running on Oil derived products. The monopoly is OIL, and not a specific Oil company.
2. "There is, of course, a very significant power loss across transmission lines, causing inefficiency."
There is of course, a very significant energy cost to transport oil or oil products to the gas stations (Pipelines, tankers, etc)
There is energy cost in the refinery process. (Just as there is loss in Electricity production)
Internal combustion engine only use 28% of the energy stored in gas. Electrical engine is 95% energy efficient.
By the way - You are shifting the subject of my original post. Which is that there is a real need for humanity to diversify the energy sources needed for transportation, in a way that we are not dependent on one energy source.
Thomas More, a "troll" sounds like a reference to the kind of mythical creature that lurks under the bridge in folk tales, but the word comes from the verb "to troll", as in fishing. Since the early days of online discussion groups in the 1990s, there have always been provocateurs who "troll for newbies", meaning they suck newcomers into the same old discussions. A "troll" used to refer to the *message*, the bait used in trolling, and not the person, but nowadays people seem to assume that a troll refers to Shrek and that it refers to a person.
I suspect that some people here on CD and some other web sites actually are not attention-starved provocateurs, but professional noisemakers paid to post messages that degrade the quality of discussion.
In either case, the proper response to trolling is to ignore it.
"And I never said that OPEC alone control the price."
Ok, when you said:
"The oil market is controlled by OPEC."
You meant not OPEC alone. Thanks for the clarification.
"What I said was that the Oil market is not a free market."
Yes, you did say that. Why is the oil market not free?
"By the way - when I said monopoly - I meant that most cars are running on Oil derived products. The monopoly is OIL, and not a specific Oil company."
I don't think "monopoly" is the correct word then.
"There is of course, a very significant energy cost to transport oil or oil products to the gas stations (Pipelines, tankers, etc)
There is energy cost in the refinery process. (Just as there is loss in Electricity production)"
Granted, you have to weigh that against the transmission losses (I squared R, which is why they jack the voltage up over long distances) WHat numbers have you seen if any?
"Which is that there is a real need for humanity to diversify the energy sources needed for transportation, in a way that we are not dependent on one energy source."
I agree, but the question is how.
"You have no explanations, other than India and China,"
BTW, I just threw that one out as an example. I thought you knew all the others like speculators, what new technologies are in the pipeline, what fields may or may not be discovored or developed, etc. Nothing spurious.
Jakenewton said: "...speculation about the future. Example, many people I know will always fill up, because they "know" it will only cost more next time. In a situation where they thought it would be cheaper next time, they might just get half a tank. This is basically what happens on the commodity exchnge."
Speculators also caused the great depression which caused tremendous suffering and suicides:
"Through the miracle of buying stocks on margin, one could buy stocks without the money to purchase them. Buying stocks on margin functioned much the same way as buying a car on credit. Using the example of RCA, a Mr. John Doe could buy 1 share of the company by putting up $10 of his own, and borrowing $75 from his broker. If he sold the stock at $420 a year later he would have turned his original investment of just $10 into $341.25 ($420 minus the $75 and 5% interest owed to the broker). That makes a return of over 3400%! Investors' craze over the proposition of profits like this drove the market to absurdly high levels. By mid 1929 the total of outstanding brokers' loans was over $7 billion41; in the next three months that number would reach $8.5 billion42. Interest rates for brokers loans were reaching the sky, going as high as 20% in March 192943. The speculative boom in the stock market was based upon confidence. In the same way, the huge market crashes of 1929 were based on fear."
http://www.gusmorino.com/pag3/greatdepression/
Perhaps the solution is to hang parasitic economic speculators who unnaturally skew the economy from the gallows pole until dead for the great suffering they have caused. How do you like them apples Jake Newton?
The Dubai Mercantile Exchange (DMEX) was set up by NYMEX on June 1, 2007, when oil was 60 dollars a barrel. Last week it was at 135 dollars a barrel, despite the world heading into a recession and US consumption declining. The US Government energy futures regulator, CFTC opened the way to the present unregulated and highly opaque oil futures speculation. It may just be coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is a former chairman of the US CFTC."
Today CFTC announced that it is investigating the speculators.
Prices goes down to 126 dollars.
presence_aka_Namaste Jake Newton is a world class sociopath utterly lacking empathy and seeing other people only as resources to be exploited and not other sentient beings to learn from and have compassion for when they are suffering. I think everyone who has been posting here for any amount of time understands EXACTLY where he is coming from and what the consequnces of his philosophy are for anyone other than the upper 5% of the super rich global elite who value money more than morality or decency. Eventually we will have to fight the Jake Newtons of the world in the streets much like in Jack London's novel The Iron Heel, that is my prediction sadly of what the post peak oil future will bring us. For the Jake Newtons know that no other source of energy will provide as much energy per unit area as fossil fuel and rather than sharing and allowing all of us to live with grace and dignity the Jake Newtons will say "I got mine" while millions starve, and thus the civil war will begin.
"Perhaps the solution is to hang parasitic economic speculators who unnaturally skew the economy from the gallows pole until dead for the great suffering they have caused. "
Which ones though? For every seller of a futures contract there is a buyer. One will win and the other will lose. Only one will cause the suffering, not both. Which will you hang? The losers or the winners? Think carefully.