Wall St. Driving Up Oil Prices. Again.

by Ben Hoffman

WASHINGTON — Oil consumption has fallen, demand from U.S. motorists for gasoline is flat at best and refiners that turn crude into fuel are operating well below capacity. Yet oil prices keep marching toward $90 a barrel, pushing gasoline toward $3 a gallon in many markets, and prompting American drivers to ask, “What gives?”

Blame it on the same folks who brought you $140 oil and $4 gasoline in 2008: Wall Street speculators.

Experts attribute much of the recent rise in prices to flows of speculative money into oil markets. These bets are fueled by investor expectations that the U.S. and global economies are poised to return to growth and thus spark increased use of oil. Strong growth in China supports the narrative of rising oil consumption and tightening supplies.

Source

High oil prices a few years ago helped destroy our economy. It caused inflation, job loss, and caused a lot of suffering. People had to choose between filling up their tanks and putting food on the table. These speculators are engaging in anti-American activities and they need to be stopped.

The Commodity Futures Trading Commission is weighing a proposal to put global limits on how many oil contracts any one market player can buy or sell, and legislation to revamp financial regulation that’s expected to pass Congress this year could force greater disclosure by oil traders to regulators.

How about repealing the Commodity Futures Modernization Act of 2000 instead? That’s what got us into this mess in the first place and allowed Goldman Sachs et al. to destroy our economy.

Advertisements

16 Comments to “Wall St. Driving Up Oil Prices. Again.”

  1. Mr. Hoffman,

    You have me all confused . You Democrats said that high oil prices during 07 and 08 were the fault of BIG OIL . Those EVIL OIL companies . Now you say it is oil speculators . What gives ?

    Here I was all set to watch on TV, the Nostril Congressman Henry Waxman bring up before his Committee, the over paid executives of Big Oil, and sweat the truth out of them .

    So now the Nostril will do what ? Grill the speculators ? As far as Goldman Sachs, they were bailed out by the US government . Wait didn’t that happen under Bush ? They are doing extremely well under the Socialist Obama Regime though .

    Actually I look forward to watching the Obama enemies list grow . It seems a lot of folks jobs are no longer ” Respectable ” to the one, the only, Lord Obama .

    • [You have me all confused . You Democrats said that high oil prices during 07 and 08 were the fault of BIG OIL . Those EVIL OIL companies . Now you say it is oil speculators . What gives ?]

      Naaaaa… you just made that up. I’ve been saying for years that the Commodity Futures Modernization Act of 2000 allowed oil to be traded by speculators and that’s what caused the spike in the price of oil, and contributed to the collapse of our economy.

      • Mr. Hoffman,

        Again you have me confused . I thought it was George Bush’s tax cuts for the rich that crashed the economy .

        I personally do not believe that you care about the American consumer being screwed by high oil prices .

        What you and Obama are really angry about is that all of that money was going somewhere else instead of Obama’s coffers .

        Now be honest . You guys have always wanted to raise gasoline taxes to supposedly force Americans to buy little kidde cars and alternative POS’s.

        Meanwhile you will never find some big fat Senator squeezing in to a little hyundai accent that gets over 40 MPG, like what I drive .

      • [I thought it was George Bush’s tax cuts for the rich that crashed the economy .]

        Why did you think that? I never claimed that and I’ve never heard anyone make that claim. I believe you just made that up. 🙂

  2. Mr. Hoffman,

    Whether you like the way oil markets work or not, they work . Whether a shortage is real or created, prices go up . The best way to kill a price bubble with out causing undo harm is to increase supply . That was what WE tried to do during the Bush years. YOU guys stopped us . Now you guys are the big Kahunas . As the economy picks up energy prices will go up . It will be amusing if you hero tries to use green solutions .

    He does have one limited weapon to use, thanks to Bush . Bush filled up the Strategic Supply and even added new capacity, I think . Which after your guy Clinton ran it down, was a hell of a nice thing to do for Obama .

    Obama can release oil any time he wants to drive the price down, just like Clinton did . Funny how that supply thing actually works even for Democrats .

    It would be really funny if anyone tried that extra drilling thing .

  3. Mr. Hoffman,

    I am sorry . I already was writing when I saw your latest comment about legitimate economists . While I’m sure you will deem them illegitimate bastards, I will try to find some . In the mean time .

    ” How about repealing the Commodity Futures Modernization Act of 2000 instead? That’s what got us into this mess in the first place and allowed Goldman Sachs et al. to destroy our economy. ”

    I do not think it will work . Markets are Global. Obama might shut down US traders, but so what . International traders will just laugh and pick up the business. The real problem is your guy Barry has been over printing money . The Chinese and everybody else can wipe their butts with all of the dollars .

    Barry has gotten away with it because there is so much slack in the US economy . As things pick up all of that printed money is now going to bite us in our butts.

    Blaming speculators for taking advantage of weak money policies won’t get you anywhere . I fault G. Bush for his weak dollar policy too . Obama makes what Bush did look like nothing .

  4. Mr. Hoffman,

    ” Alan, can you site any legitimate economists who agree with you? ”

    Well he ain’t an economist,,,,but is President Obama “legitimate ” enough for you ?

    http://www.businessweek.com/news/2010-03-31/obama-announces-expanded-offshore-oil-natural-gas-exploration.html

    ” The president would permit exploration in the Atlantic Ocean from south of Delaware and, if a congressional moratorium is lifted, in the Gulf of Mexico 125 miles (201 kilometers) off the west coast of Florida. Obama said the plan is part of the transition to a new-energy economy.

    “Given our energy needs, in order to sustain economic growth and produce jobs, and keep our businesses competitive, we are going to need to harness traditional sources of fuel even as we ramp up production of new sources,” Obama said at Andrews Air Force Base in Maryland. ”

    Now Obama is not an expert, so from the same article I figured I’d quote one .

    “The U.S. oil industry’s biggest lobbying group called today’s announcement a good step.

    “Exploring for and developing our nation’s offshore resources could help generate more than a trillion dollars in revenue and create thousands of jobs to add to the already 9.2 million jobs supported by today’s oil and natural gas industry,” Jack Gerard, president of the Washington-based American Petroleum Institute, said in a statement.”

    Sorry, that I cannot pull out of my hat on command an economist’s statement that increased drilling WILL decrease US gasoline prices .

    • Supply and demand do have some effect, but speculators are having far too much influence on the prices. And the big problem with drilling off our shores is, the oil that comes out of those wells goes on the world market, so it will have little effect on gas prices domestically. Another good argument for some protectionist policies.

      • Well, Ben, higher oil prices may grant you the protectionist policies you’re hoping for, even if they’re not via legislation! As cheap as China and foreign countries can produce goods, they still have to transport them, which takes a whole lotta oil. Oil gets too scarce and stays too expensive, I’ve got to imagine goods produced overseas become less attractive.

        From that perspective, the wars in Iraq and Afghanistan become part of these same “protectionist policies”, too.

  5. Mr. Hoffman,

    ” And the big problem with drilling off our shores is, the oil that comes out of those wells goes on the world market, so it will have little effect on gas prices domestically. ”

    I congratulate you on your knowledge, but I disagree on your conclusion . You have to look at the US oil question in totality . Actually that is an Obama-like word that I dislike . You have to look at the big picture .

    Now importing oil in large amounts presents 2 concerns . First the obvious one of losing control of the economy because of unreliable foreign supplies . The second concern is the large amounts of US currency leaving our country and hurting our balance of payments .

    Some US oil does leave our shores now . I remember reading years ago about Alaskan oil going to Japan . This sounds terrible, but really is not . It was more efficient to sell that oil to Japan because of transport, then take those foreign exchange dollars and buy other oil for say the East coast of the US from foreign sources.

    So your concern about the oil going to foreign markets is misplaced . Any US oil on world markets has two positive effects . First it helps our balance of payments by bringing in badly needed foreign exchange, which we can then use to buy other oil . It would also have the effect of lowering world oil prices by adding world supply .

    When you think about it, any American oil going overseas has many benefits . Not the least of which are the High Paying Jobs oil workers typically get . At a time when we are looking for export industries to support the economy, here is one .

    And I will throw one more goody in for you, you taxocrat . Royalties and taxes flow like water in to State and Federal ( Obama ) coffers . Think how many votes your guys can buy with all that loot . Think Jed Clampet .

  6. Mr. Hoffman,

    ” I agree with everything you said, but that doesn’t mean speculators aren’t manipulating the prices ”

    Who are you and what did you do with Mr. Hoffman ? I bet you have him chained up in a dungeon .

    Verne R. Kane,

    ” Did I just hear that right? Ben and Allan AGREE, on EVERYTHING?!?!?!?! Get Ripley!!!!! 🙂 ”

    Ripley would never believe it .

  7. Hey guess what ? Oil has dropped a little lately . Those speculators who raised oil prices were actually betting that President Obama would have the economy chugging again soon . Unfortunately, with almost record inventories of Oil and gasoline in storage, they are losing their bet . Kudos to Obama for continuing to destroy the US economy, thereby royally screwing the oil speculators . The man is simply brilliant .

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: