Wall Street is driving up oil prices

[Joanne98]

Source: MSNBC


Oil prices have steadily rose over the last year, and experts are worrying further increases could snuff out an already-fragile global economic recovery.

President Barack Obama is expected to announce Wednesday his plan to open oil and natural gas drilling off the Atlantic Coast and Gulf of Mexico. The proposal aims to reduce the nation’s reliance on foreign oil, which theoretically could hold down prices for U.S. consumers.

OPEC countries also are convening in Mexico this week to map out a strategy for keeping prices from rising higher.

But officials may face an even bigger problem: The recent rise in prices seems to be driven by Wall Street investors — not market supply and demand.



Read more: http://www.msnbc.msn.com/id/36107405/ns/business-oil_and_energy/

[Tansy_Gold]

1. I'm shocked. Not. n/t

[NJmaverick]

2. Oil prices have been manipulated for years and it was the greed of those

manipulators that sent prices so high it triggered the global economic crisis.

[Wickerman]

3. yep

and it's funny how that point is never mentioned when the recession is discussed.

[tom_paine]

14. According to Corporate M$M, history began on 1-20-2009

Standard Bushiganda Op - Corporate M$M IS NOT ALLOWED top mention that Bushonomics got us where we are today.

[pattmarty]

10. There were a number of things that "triggered" the crisis, not just..........

...........Walls st machinations of just oil, but of many different "strategies" manipulating many different commodities AND finances.

[dotymed]

26. 100% true...

Why can't our Congress pass a simple law against "betting" on oil? Come on, we voted for CHANGE not for more change in the wealthiest pockets...

[happyslug]

39. Because the best control on such control is the ability to bet.

During the economic crisis of 2008 all you heard was news report on how short sellers were making things worse. How? By betting that the price of stock would fall for all the economic indicators show that it would. Wall Street did NOT what to hear that the price of stock would fall and thus blamed the short sellers for "Forcing" the price down. How did the short seller "force" the price down? By just sitting on their shorts and waiting for the price to fall. What did Wall Street want? For the stocks to go up AND TO HEAR NOTHING TO THE CONTRARY and short sells are news of the contrary.

Speculators do NOT drive up price UNLESS they have some control over the market. The speculators in 2008 (in terms of oil and stocks) and in oil today do NOT have that control. Such speculators do NOT have the economic power to force the price of oil up and thus their speculations has nothing to do with the price increase.

What is causing the price to go up? First you have seen drops in production in Mexico and Russia. You have seen other drops in other countries (The US Oil production is up compared to 10 years ago, but is down if you go back 20 years). Furthermore China and India are buying oil like there was no tomorrow. Much of this do to electrical shortages in both countries (Diesel and gasoline generators are used extensively in both countries to fill in the electrical gap). Both China and India have adopted cars almost to first world levels (China is expected to pass the US in new car sales within the next few years). Now both China and India use their cars less then we do in the US, but the number of cars has increase oil use in both China and India (China has recently become Saudi Arabia's # 1 customer when it comes to oil purchasing, replacing the US). Iraq may have some untouched production capacity but no one believes it will come on line for at least six months. Saudi Arabia claims it has such unused capacity, but it tends to be a very heavy oil that few refineries can handle.

In short we have a very tight oil supply situation. Exports of oil exceed imports of oil by less then 5% (5 percentage points between those two figures seems to be the norm, some countries are importing oil but NOT counting it, the best explanation is US military purchases for oversea bases and other uses, the US does NOT count such oil as an import for it never reaches the US proper, and the country where the base is located or a ship is refueled also does NOT count it for it is NOT for their domestic use, thus the % percentage point difference between exports and imports). Once oil imports come within 5% of oil exports you start to see prices go up do to excessive demand over supply. If oil exports exceed oil imports by more then 5% then you start to see the price of oil going down do to excess production. Over the last few years as prices of oil went up to almost $4 a gallon and then down, the market has been tight. The recession of 2008 was caused by the high price of oil, which in turn dropped the demand for oil in the US (For only the second time in history, the first time was 2007). Oil usage in the US dropped almost 9% in late 2008 compared to a year earlier (Overall year to year was less by October 2008 to October 2007 saw 9% less oil used in October 2008 then in October 2007). Given that something like 1/3 of all oil is used in the US, that was a substantial drop in demand for oil (and lead to the drop in price of late 2008 and early 2009.

A secondary factor is that people do NOT change their oil usage overnight (Through some did in 2008, which is why we had the drop in oil usage in the US). It takes about two years for high prices of oil to reflect in what cars people drive (Most people can NOT trade in their present car for a more fuel efficient one at the drop of a hat, they have to wait till the old car is paid for and then buy a more fuel efficient car). Thus people did NOT stop buying big cars for small cars in 2008, but waited till 2009 to do so (and this is ignoring the over drop in car sales do the recession of 2008).

More on US oil usage in 2008:
http://www.google.com/#hl=en&source=hp&q=US+Oil+usage+drop&aq=f&aqi=&aql=&oq=&gs_rfai=&fp=a2bb30ecf4f91972

Yes, demand for oil has dropped in the US and most of the World, but that drop has more then been compensated by the increase in demand from India, China and other booming third world economies AND the drop in production of the Russia (The #1 oil producer today, Saudi Arabia is #2 and the US is #3, just remember the US is the #3 producer of oil today AND WE STILL IMPORT ALMOST 40% OF THE OIL WE USED, just to keep in mind how little production of oil is done world wide).

Given the tight oil situation I mentioned above, it is a market subject to speculators betting that demand will exceed supply without the speculators manipulating the market. Such Speculators are just betting what the price of oil will be in 2-3 months based on the above NOT anything else (For example, if someone was keeping oil off the market, no such accusation has been made as to the people who can do so, OPEC and Russia, the oil companies do NOT have the control over enough oil pumps to do it, only Russia and OPEC has that ability). As to OPEC, its members could force the price of oil up, except every last one of them are producing all the oil they can even if its exceeds their OPEC allotment (Saudi Arabia is the historic exception to this rule, but there are indications it is also producing all the oil it can sell, and that excess production is NOT meeting the demand). Russia is NOT a member of OPEC and has NEVER cooperated with OPEC for Russia wants to sell as much oil to get as much Euros and Dollars as it can get. Every so often there is talk of Russian decision to work with OPEC to keep the price up, but Russia like most OPEC members want to sell as much oil as possible to get the most money it can today, even if that is less per gallon then if Russia just cut production.

My point is simple, the price of oil is going up for we have a tight oil market NOT to anything any speculators are doing. We have to address that tight oil market and no one wants to for the best way is to increase the price of oil in the US by a high gasoline tax (i.e. something on the order of what is done in Europe, $4 a gallon). Such an increase will force people to drive less AND provide money to improve mass transit so people can drive less. Obama is NOT even discussing it for it is a hot issue that he wants to avoid. Yes, if you want the price of oil to go DOWN, increase the taxes on it. That is the best way to reduce demand for anything and we need a drop in demand to keep the price of oil low.

[dotymed]

57. Your reply seems well thought out.

It does not change my thoughts on th speculators though. Enron did the same thing. It had nothing to do with most of the reasons you gave. We hear constantly of the oil barges lined up on the water, waiting for prices to go up. If the great folks at at these oil companies can not (and do not) manipulate the oil prices to get maximum profits, I am gonna have to start wearing my tinfoil hat again.

[happyslug]

71. Enron was NOT speculating, it was manipulating the market

Enron created Electrical shortages in California, then charged excessively for the replacement electricity (which was the electricity taken by Enron to cause the shortage in the first place. The scarily point once price controls were implemented the scam collapsed for there was no where to ship the electricity (and no way to prevent it from being produced for it came from Hydro dams in the Pacific Northwest AND the Colorado River). No one else could buy the excess electricity AND it had to be used or lost.

That is NOT a normal situation with speculators, Speculators who may have investment in the item in short supply, but they are NOT the cause of such shortages. Speculators see a shortage coming and invest accordingly (For example they may buy all they can of what they believe will be in short supply, thus driving up the price TODAY based on belief that the price will be at least that high when it is sold later on). Speculators do NOT do what ENRON did, overbook a transmission line for electricity, knowing it is the weak point in the transmission of electricity and thus prevent others from using that line. That is NOT speculation that is market manipulation and has been illegal for Centuries (And has been done for Centuries). This is the difference between legal speculation AND market manipulation. Speculation is good for the market, it tells investors what is expected in the future. Market manipulation is the gaming of the market to create a shortage (The Hunt Brothers in the 1980s and they attempt to corner the market of Silver is another example of market manipulation, they was NO shortage of silver at that time, or even now to justify the price Silver reached at the peak of the Hunt Brother's market manipulation). . Market manipulation is NOT legal for it is harmful to any market as can be seen in how Enron manipulated the electricity market in California in 2000-2001. The board of directors of Enron should have gone to jail for what they did, but no one did for it was all "legal" under deregulation.

The California electricity Crisis:
http://en.wikipedia.org/wiki/California_electricity_crisis

More on Enron, it was a corrupt organization from top to bottom:
http://en.wikipedia.org/wiki/Enron_scandal

I quote from the Federal Energy Regulatory Commission on what happened in California:
"...many trading strategies employed by Enron and other companies violated the anti-gaming provisions..."

What Enron did was NOT speculation, that was market manipulation and is and was illegal. As to oil no one is saying the present raise in the price of Oil is the result of Market manipulation. The present raise in price seems to be a real shortage that is slowly pushing up the price (and speculators are betting that prices will be even higher come the summer driving season). People forget that speculators drove the price of oil up and up but only to the point when people STOP buying oil and the demand for oil fell below production. Speculators show that change and lead the charge in the subsequent DROP in the price of oil in late 2008. Speculators try to guess where the market is going and try to beat it. Some speculators loss money when oil peaked and fell, but many then made up the loss by betting that the price of oil will drop given the huge drop in US oil demand (the 9% drop in demand from October 2007 compared to October 2008 was huge, remember US oil usage INCREASED in every year since WWII except for 2007 AND 2007 was just a hair below 2006 oil usage. Just to point out HOW drastic the 9% drop in demand was (Year to year usage was NOT as high, given the drop in price after October 2008 but the first real drop in demand since gasoline rationing was adopted in 1942).

I hate to make a distinguish between Speculators and Market Manipulators, but one is wearing the White Hat (The True Speculators for such speculators is showing HOW the price is expected to go) AND the black hat wearing Market Manipulators who more often then not tries to pass himself off a a Speculator NOT a criminal.

[dotymed]

74. If "Speculating" (ultimately by the oil companies)

is not "manipulating" the market, maybe I should just eat my tinfoil hat...Really, just break it down to its simplest form. I am degreed (twice, many years ago, when logic was a required course) yet I can see the forest through the trees. The oil companies, through "speculation", "manipulate" the price of oil. They "earn" (LOL) record profits, because the retail prices are artificially high, and the consumer is screwed. We all know that internal combustion (gasoline powered)engines are a relic that corporate America, which owns our government, keeps alive so they can squeeze every last cent out of the people who can least afford it. Most "civilized" countries have begun the switch to non-gasoline powered technology.

[DemReadingDU]

70. Reminds me of the high gas prices in 2008, n/t

[mbperrin]

75. If we required delivery to cover contracts, I'd agree.

But these naked trades are just gambling, and they do control the prices in the physical market.

Easily solved - just do what they made the Hunt Brothers do with silver - take delivery and pay for it.

Allowing people to trade things they never had and cannot obtain is a game, and it's helping to send the country down the drain. All these phantom games and financial "products" are killing the real economy by bleeding capital away from real production of real things - the only source of real wealth, first analyzed by some old guy named Smith back in 1776.

[defendandprotect]

72. As I recall, speculators were keeping tankers of oil floating on the seas awaiting price rises ...

making oil scarce --

Same as they did with Carter administration --

Finally, he assessed a Windfalls Profit tax on them!

[ixion]

4. Yeah, I've been getting calls from people wanting me to invest in oil productions

and citing "analysts" predictions about oil rising to $110.

And it very well may do just that. But it's the speculation, not the market, driving that increase.

[pattmarty]

11. Gold is the "shit" according to the MANY Fox commercials.

:sarcasm:

[dotymed]

27. Remember

when "the brothers" did the same to the cost of silver? Millions lost their life savings when the silver market failed. Eventually, after millions of people are destroyed by these manipulators, oil will find its equilibrium price. Until then, legislate these thieves out of business.

[RedCloud]

37. It's a cycle to keep us from our money...

Precious metals, stock, oil, houses, foreign currencies etc. whatever they tell us to invest in we are going to get screwed because they manipulate the market, always a step ahead of us.

[no_hypocrisy]

5. What, again?

[lonestarnot]

6. More bushitler action.

[LiberalFighter]

7. If George Washington was alive

he would shoot those damn speculators himself.

[Roland99]

8. Oh come on. No way.

We all know oil hit nearly $150/bbl due to true quantity demanded and limited supply!



:eyes:

[lib2DaBone]

9. The Enron Boys over at Goldman Sachs.....

...backed by the full support and encouragement of the U.S. Senate.

"A politician can steal more with a pen than any criminal ever stole with a gun"

[tinrobot]

12. In some ways, I think that's actually a good thing.

Higher oil prices mean people will drive less and look for alternative fuels.

[Jackpine Radical]

15. Yeah, and high health insurance premiums make people want single-payer.

Where the hell you going to "look for alternative fuels?" Your backyard? I don't mean to pick on you and in the long run you're right, but the same people who are driving up the oil prices have the power to suppress innovation.

[tinrobot]

51. The innovation is happening

One alternative fuel could be as close as a wall outlet (i.e. electricity)

Reasonably priced electric cars will hit the market late this year.

Prices of solar panels are dropping rapidly, and government incentives are rising

Other technologies are also coming online (ethanol, wind, etc)

Yes, high oil prices are painful, but it's only because we've chosen to be addicted to cheap oil. We have to wean ourselves of the habit sometime, the only question is when.

Personally, I think the sooner we break our addiction to oil, the better.

[Jackpine Radical]

56. Well, I'm certainly a believer in green technologies too, and have been for years.

The problem is the obstructionist conventional American industries. And electricity only really works as an alternative fuel if we generate it some other way than with coal (or, I would argue, nuke power). Ever see the movie Who Killed the Electric Car?

[tinrobot]

67. Yes, I've seen it.

I also own an electric car.

Many studies have shown that, even with coal generated power, the carbon footprint of an electric car is less than the best gas powered car.

[Jackpine Radical]

68. That may well be--I suspect you're correct--but those coal plants gotta go anyway.

The real tragedy of fossil fuels is that we have enough of a supply do do ourselves in with. I think modern coal plants are about 30% efficient on top of everything else.

[Dont_Bogart_the_Pretzel]

29. Good thing like bread being over $5.00 a loaf?

Or milk close to $6.00 a gallon some paces?










i just don't know what to say anymore to people who think it is a "good thing" whenever oil prices spike !!!

[CountAllVotes]

34. organic milk = $9.58 a gallon

here in California where we really do not deserve nor need Prop. 13 ...

:grr:

[tinrobot]

53. So it's a good thing to remain under Exxon's thumb?

The potential spike in food prices just shows how dependent we are on cheap oil and how much companies like Exxon control the economy.

We have to break our oil addiction sometime, but as long as oil is cheap, it's not going to happen. People are too damn lazy to seek alternatives.

Sadly, the only way we'll break the addiction is for it to become too expensive not to change.

[prolesunited]

33. Tell that to the rural workers

who *MUST* drive more than one hour each was to get to the only job that's available. The cost of the commute eats up half of the low wages.

[tinrobot]

54. Perhaps they need to revisit where they live.

Sorry if it sounds insensitive, but the days of relying on cheap oil to fuel our suburbs are drawing to a close.

[Jackpine Radical]

69. I think it may call for a reorganization of how work is done in rural areas.

A really good argument for widely available high-speed internet would be that rural workers could do a lot more information work from home.

[2Design]

13. oil companies have cut production to get prices up - no shortage -

people cut back on driving or bought fuel efficient cars - so they cut production about a month ago - they want the same money so prices must be higher - just like utilities

[defendandprotect]

73. Agree . . .

[gtar100]

16. This points at one of the major sources of corruption in our economy -

speculation on essential commodities. The fact that a bunch of assholes can "bet" on higher prices and have that action eat into our living conditions so substantially is wrong. Plain and simple, wrong. The incentive system is all wrong here.

[Lugnut]

17. File this in the No Shit Sherlock file. n/t

[Terry in Austin]

18. The "bumpy plateau"

Price instability is an expected result as world oil production levels off. Growth in production stopped in 2005, and all the new projects coming on line for the foreseeable future won't be enough to compensate for depletion.

A couple of years ago, the price shot way up; six months later, it tanked. It'll probably go through several such cycles over the next few years before prices start consistently reflecting fundamental supply constraints due to permanent depletion rates of 5% or more.

Yes, the proximate cause of high oil prices is the trader types, but not the root cause. For that, we can blame geology.

[The2ndWheel]

19. We've been privatizing the profits of oil

and socializing the costs of oil to the rest of the planet for a long time.

We sound like all those corporations we continuously rail against day in, and day out. Higher prices are better for the whole environment. Think of it as a tax on the rich. If we pay higher prices, then our whole Earth community will be better off.

But we don't want to do that. We can't. How much of all this would work if we had to pay the true cost of something? We want lower prices. We have to get to work. We have to do this and that. We like our profits. We want more. Because it is all about us. We have a lot more in common with corporations and the top 1% than we care to admit. It just depends on how you look at it.

[seabeckind]

20. So what's the definition of insanity again?

Perhaps we need a change in the way we non-handle the corporate interests and their operating principles.

People aren't working or have had their net buying power reduced, therefore not buying as much of a product. So, since the primary duty of any good corporatist is to sustain profits, they must raise prices.

Makes sense to me. :sarcasm:

[mike_c]

23. exactly-- how many times will we let the foxes assure us that they only have the henhouse's...

...best interests at heart? Sheesh!

[paparush]

21. Aww Geez...

[Schema Thing]

22. Get the fucking speculators out of oil markets. For now and forever.

[liberation]

36. Markets by definition are based on speculation

Capitalism at its core is just that "speculation" where do you think the "growth" in capital based systems comes from mainly?


Remove speculation and credit and then capitalism fails, and you know why it fails? A very simple reason, those who control the system then have to get actual real proper jobs. I.e. they have to actually produce wealth. Which involves actual labor in order to provide an actual, tangible, asset with a an actual value proposition.

Capitalism at its core now is nothing more than simple blackmail. Those at the top feel entitled to profit, just because. The system is set up so that the minute they don't get the profits they feel entitled to it fails. It is as I said, extortion of the many by the very few. It is no coincidence that the tarp bailout at its basic core was nothing more than plain old robbery. It was a transfer of wealth at a massive scale, in order to make up for the deficit with reality that Wallstreet financial schemes were starting to display and whose hubris was too obvious to cover up.

Same case can be made for the healthcare "reform" no one can actually make a case as to why a few corporations have to still be entitled to profit just because they add 30+% overhead to healthcare costs with no value added whatsoever. But not a single mainstream politician dared put forth a reform which removed those few corporations out of the loop. In other words, we health care of millions hostage to the entitlement to profit of a couple of thousand (at most) top level execs working in insurance companies.


Saying that the way to fix our current system is to remove speculation from the markets, is like claiming that the best way to fix healthcare is to remove medicine from hospitals.

[Schema Thing]

38. no, it's nothing like saying that.

speculators in oil markets are simply making bets, and more often than not they are betting on what-other-people-will-bet, rather than betting on the true use of oil in the world market.

Oil markets should be restricted to players with actual skin-in-the-game. Businesses with a direct connection to the use of oil or businesses who actually buy and sell oil.

[liberation]

41. I hate to repeat myself...

... but markets by definition are based on speculation. You can have all the hand waving tangential thought experiments you want, but you end up making a case that "some speculators are better than others."

In our current system, without speculation and credit there is no growth. So it is not about the amount of "skin" one has in the game, but the fact that the game is flawed to begin with.

We can continue fixing leaks, or we can finally realize that building a roof out of straw is not the best way to protect ourselves from the elements regardless of the type of straw being used.

[Stumbler]

24. Here we go again...

Instead of lowering national speed limits, encouraging conservation through using mass transit or carpooling, or *gasp* re-opening the hundreds of land-based wells we've already discovered, tapped and capped, we're going to drill offshore... Because of this false sense of supply & demand, which is *gasp again* caused by speculators and market manipulation. :banghead: W.T.F?

[h9socialist]

25. Oil Prices are way out of balance . . .

. . . the best indicator is it's ratio to the price of natural gas -- which is now about 20-to-1. It's normally less than 10-to-1. Although I have high regard for President Obama, opening up off-shore drilling is not the way to resolve this. It would be better to regulate oil prices -- but that would require international agreements and include OPEC. Domestically, the anti-trust division at the Justice Department should be in hyperdrive on aggressively stopping price gouging. Contrary to conservative protestations, markets do not serve the public good and this is aprime example of that.

[UtilityCurve]

28. And now for something completely different

And for a completely opposite perspective, using precisely the same data, there's this: http://www.nytimes.com/2010/03/31/business/energy-environment/31oil.html?th&emc=th

I am fascinated by what may happen to natural gas prices with this announcement from the White House; over the past year, they've fallen like a stone in the only place that matters to me, my monthly gas bill ($/CCF). (I am greatly relieved that I didn't sign a long-term supply contract with an energy services company--I live in NYS, where the supply market is deregulated--I would've been screwed royally if I had locked in last year at this time, which was my intention. Thankfully, I just never got around to it!)

[frylock]

30. if only the dems were in charge, then maybe this practice would come to..

aww, fuck it anymore.

[tomm2thumbs]

42. yes, the democrats will see to it that...

aww, double fuck it

[ThomThom]

31. and us putting a few drops of oil on the world market will bring the price down

If we really want to hold the price down, cut a deal with the real people that market the stuff or cut consumption world wide. Stopping world speculation is impossible, free trade you know.
The economy may not like high oil prices but the environment sure does.
Maybe we should work harder on alternative sources of energy?

on edit:
I don't believe there is any mechanism to bring oil pumped in our country to the US people directly... bringing down the price to us. It all goes on the world market and if it is refined in the US does anyone really think oil companies would cut us a break? Not on your life, it just means more profit to them with less transportation costs.

[groovedaddy]

32. Allowing oil to be speculated on via the commodities market (bad) and allowing OPEC (monopoly) to

control production to rig prices. STOP IT NOW!

[Bragi]

35. No way!!. That would be against the public interest. /nt

[Mr. Sparkle]

40. Fixing campaign finance law, is the only way of fixing wall Street.

Otherwise they will just keep on buying off congress with their billions.

[bullwinkle428]

43. It will be VERY interesting to track the price during the fall campaign season!

I'll be SHOCKED if they creep upward over the course of that two-month period! :sarcasm: :tinfoilhat:

[grantcart]

44. For accuracy sake its speculators not Wall Street

two completely different things that sometimes intersect and sometimes do not.

[Subdivisions]

45. Really? Then what effect is this having:

???

[Subdivisions]

46. Yoo-hoo...Helllooooo...

Anyone?

[BeHereNow]

47. My brother, in Saudi Arabia, told me gas prices there are about $1.50

Guess we are paying at the pump so the Saudi Kingdom can enjoy cheap gas and
mega profits all at the same time.

BHN:mad:

[harkadog]

49. Are there any government taxes on the gas in Saudi Arabia?

That is a big portion of the U.S. price.

[BeHereNow]

50. I'll ask him if he knows- we Skype regularly.

He tells me the wealth where he is staying is
so over the top he can't describe it.

BHN

[harkadog]

58. Also some of those countries subsidize the price of gas.

When I was in Iraq 2003-2004, the equivalent of a gallon of gas was 3 cents a gallon. Not a mis-type it was 3 cents. The price of gas was subsidized by the government. I don't know if it still is.

[tecelote]

48. Double the cost of oil...

During the Bush Presidency, the cost of a gallon of gas was $1.70, if I remember right. It went to $4.00+

It raised the cost of transportation of everything resulting in higher prices for everything we buy.

It raised the cost of manufacturing resulting in higher prices for everything we buy.

Is our economic decline due to big banks mishandling risk? Partially, but not as much as you think. Oil companies love DC and DC loves oil companies. They have been protected from blame.

Come on, double the cost of a gallon of gas and you don't think American's will suffer?

Why not raise prices again. We don't give a damn.

Fool us once... what's that saying?

Oh Yeah - we started a war or two. But, that didn't have any economic impact either.

[Subdivisions]

52. Please describe the economic fundamentals of oil concurrent to the time frame

of this doubling. Thank you.

[tecelote]

55. Simple.

The increased price of gas increased the cost of transportation and manufacturing. In less than a decade, the cost of everything increased significantly as a result. To offset this inflation, the Feds dropped interest rates to near zero. Consumers suffered the consequences but didn't realize it immediately because we had easy credit and bought a lot of stuff. We bought more than we could afford... just to add salt to the wound.

[Subdivisions]

59. Good point but you missed the one I was shooting for. To wit, during that

time frame demand for oil, due to a booming global economy driven by the housing bubble, was outstripping oil producers' ability to bring oil to the market. A classic supply/demand-driven market reaction. This stoked fears of a peak in world oil production which, in turn, led to more speculative activity, contributing to higher prices.

[tecelote]

60. Hmm...

You give oil speculators a moral standing but, demand was not maxed out. Oil production can be increased, if demand requires, overnight.

In any case, it does not justify the suffering imposed upon the average American. Oil companies should have suffered (lower profits, not no profits) instead of the average American. Our representatives should have seen to that.

But, DC loves oil companies... more than Americans, in general. We were sold out to the oil companies. Plain and simple. Oil pays more. What can we expect?

[Subdivisions]

61. Sigh...

"You give oil speculators a moral standing but, demand was not maxed out. Oil production can be increased, if demand requires, overnight."

No, demand did not max out. Supply did. And, no, oil production at that time COULD NOT BE INCREASED. That was the entire problem. There was not working oil rig that was not being employed at the time and oil producers were running as fast as they could.

"In any case, it does not justify the suffering imposed upon the average American.""

Yes, Americans suffered from it. And they will again. Which is most unfortunate. I was able to completely eliminate my use of fossil fuels for getting to and from work by finding a way to work from home. Not everyone is able to reduce their consumption though and many do suffer when fuel prices rise. BUT, those who can should do so. That is can have an immediate effect if people would just do it. And doing so will reduce demand, thereby reducing the price, which will help those who are suffering from higher prices.

"Oil companies should have suffered (lower profits, not no profits) instead of the average American. Our representatives should have seen to that."

It's easy to blame the oil companies and to say that they should take less profit. And, though I loathe oil companies for many reasons, not the least of which is what happened in Colombia and to http://www.nytimes.com/2009/05/05/books/05wiwa.html?_r=1">Ken Saro-Wiwa, I recognize that they must make a profit in order to fund further exploration and production.

"But, DC loves oil companies... more than Americans, in general. We were sold out to the oil companies. Plain and simple. Oil pays more. What can we expect?"

On that much at least we can agree. And not just oil companies but corporate interests in general, especially the MIC.

[tecelote]

62. I wish I had time to converse further.

You are right, I switched demand for supply. And, we agree, corporations are the new citizens.

But, I disagree that supply was maxed out. What are "oil reserves" for? They should be to avoid economic chaos as well as for military uses. Either way, there is enough oil to weather the storm if profits were not paramount to Americans well being.

We were sold out. I still hold to that premise.

[Subdivisions]

63. But what I'm trying to get across is that it wasn't that there wasn't enough oil, there

still is. It was the ability of oil producers to pump it out fast enough.

All I can offer in rebuttal at this point is that I've been following the situation with oil intensely every single day since early 2006, including the time-frame in question. I get my information from oil industry sources such as Rigzone and Oil and Gas Journal, etc., and during that time it was well known that oil producers were running flat out and standing still in their ability to produce what was demanded.

But, I digress.

[tecelote]

64. That answers that.

Understood.

You watched the smaller oil companies and I am sure that they pumped out as much oil as they could for the premium prices. The smaller oil companies were following the American dream while the big, DC backed, oil companies were manipulating it. Our representatives allowed it. Oil made money and Americans suffered.

No company should make a profit at the expense of Americans. Democracy and Capitalism is about making profits from improving citizens lives - little known fact but, I believe in it.

The smaller oil companies were following the American dream while the big oil companies were manipulating it.

[progressoid]

65. Drill Baby Drill.

That'll fix it.

[hamerfan]

66. Ruh-Roh!

"The recent rise in prices seems to be driven by Wall Street investors — not market supply and demand."

[Supersedeas]

76. Would Wall Street have a political incentive to do such a thing?