Did someone on Fox actually make sense regarding gas prices?

[Armstead]

I heard one of Fox's businesses commentators say something that seemed to make sense, regarding high gas prices.

Like I said I heard this on Fox news, so I am skeptical. Plus I am a dummy about financial markets. So I'm wondering what others rthink about this.,

In a nutshell, he said that as the oil markets have gotten more profitable, they have attracted a new type of investor in oil futures. That is the funds and otehr investors who have traditionally stuck to other types of investments, such as stocks and bonds.

He said they have brought the mentality that makes the stock market so volatile into the oil markets, making them more volatime too.

Rather than respond to real conditions, he said, they they react to short term news by driving prices up or down on a whim. As an example, he cited how the price of oil spiked when Ernesto first appeared, but then retreated when the storm appearted to change course.

He also recoimmended that there should be greater regulation to protect oil markets from this type of volatility.

What do you think? Are his observations valid? Or is he blowing Fox-style smoke?

[pooja]

1. There are a lot of people making money on the prospects of the

rise and fall of the barrel.

What is really ridiculous is that the oil companies talk about the barrell. Well, a lot of oil companies own and manage the actual oil production from the ground (who do you think have oil rigs in the gulf? OPEC?).. So they are "buying" barells of oil from themselves and then refining it themselves, shipping it, and you are buying it. If one oil producing country (say Venezuela) decided to put its barrells out on the market for $30.00 (reason USA pissed off about their poor oil/ heat program). They would drop the price of oil on a global scale. Why do you think they were so pissed at Sadaam.. he kept raising and lowering the oil almost weekly. He was extremely detrimental in getting all oil distributors to tote the line and set the price. Anyway its all corrupt and business as usual.

[notadmblnd]

2. All I know is that gas has been going down the last few weeks

form a high of 3.09 down to the 2.60's in just the last couple of weeks. People are claiming that it always goes down at the end of the summer and that is the reason. I'm not buying it. Not this much of a decline. News reports said that shutting down the BP pipeline in Alaska would result in higher prices, we've been hearing for the last few years how we just don't have the refinery capabilities to keep up with demand and that is why prices are high. The last summer holiday weekend is just around the corner and gas is still on the downward slope, so how are they managing to suddenly keep up with production and still lower prices?

[Ignacio Upton]

5. Price rigging an insane speculation

Of course, once the Republicans win on Election Day and keep both houses of Congress (and possibly GAIN seats because voters will be complacent once again) prices will be back up to $65-$70 by January.

[applegrove]

3. Absolutely. Don't know how the futures market works either. But yeah -

it isn't just oil. It is everything that follows a business cycle (one year) or the futures market (even less than that). All long term thinking is down the toilet with this generation of investor & the government who represents them. We know that changing social security.. and the dump into the market that would cause..was supposed to stave off recession. So too all the tax cuts.

No matter what - the * WH tends to the stock market like Chancy the Gardener. And much in the way of government "assets" have been used as fertilizer.

Part of it is an attempt to make part of America so rich that they can overcome Saudi Arabia's investments in the USA.. and not be so vulnerable to one country. Part of growing the rich is the get more Repuke voters out of the deal..just gut the middle class and divide it into haves and havenots, where it used to be lower, middle & upper.

And they do this creation of an uber wealthy class in the US, with distribution of income that looks more like Mexico or Russia than any G8 country, they do this without giving anything back to the voters. I wonder when the not-so-well off people who vote Republican will figure it out? I mean the rich in Canada have a covenant and relationship with everyone else through shared social programs like universal health care. What exactly do the rich in the USA do exactly? What is their purpose?

[notadmblnd]

4. I see them as big giant leeches....

sucking the life blood out of the country. But of course, that is just my observation.

[applegrove]

9. Nope. If they are paying 35% taxes and up..they are providing for

social programs. Like anyone else in an economy they do their part. Keynsian economics (New Deal) requires some re-investment into the country. But Globally - perhaps in the case of the USA - that relationship has been broken.

It can be fixed. If the less well off have good schools and good health care and good programs - so that they too can aim high.

It would be just as easy to stop the Saudis from messing with the US economy if they are forced into democracy and such...forced into funding poorer arab nations like Palestine (instead of just the bombs and wars that destroy infrastructure). And keep hatred festering in the middle east (in the same way that oil money in the USA keeps religious from fighting along side the liberals these days). Same with Iran.

There is always going to be some people with more than others in an economy. Most of us are considered rich if you look at the whole planet. But - yeah.. I hear ya! Why would anyone in the newly struggling middle class... why would they vote for *.

The money the Saudis get rich with comes from your gas station. That is americans handing money hand over fist to backers of the Repukes and the Saudis. So fighting for alternative fuels and such will also help make for a less vulnerable US economy. And in the years to come.. be much cheaper than oil.

[Nickster]

6. Actually sounds about right on the mark.

These hedge funds are dumping TONS of money into Oil and the govt is doing jack to regulate these hedge funds, so the volatility is nuts, BUT people are making tons of cash.

Did they shoot this guy after he spoke? Or snicker at him and call him a commie traitor?

[bananas]

7. Reuters, Aug 16: "Oil industry plans for price correction not crash"

"A Reuters poll of analysts sees oil easing from this year's $78 a barrel peak to $64 in 2007 and $56 in 2008."
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x64345

[johnaries]

8. Well, you think this might have something to do with it?

http://www.suntimes.com/output/business/cst-fin-bp30.html

BP target of U.S. probe on price manipulation

August 30, 2006

WASHINGTON -- BP which for the last six years has tried to position itself as socially concerned and environmentally friendly -- is being investigated for possible manipulation of crude oil and gasoline prices, raising concern that the company ...

Trading of crude by BP is being reviewed by the U.S. Commodity Futures Trading Commission in Washington while the Justice Department is investigating BP's trading in gasoline, BP spokesman Robert Wine said. London-based BP is ''cooperating fully,'' he said.