Letters to the Editor
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Conspiracy theorists
Maybe it's the same crew that did the Enron and California Energy Scam that was so effectively covered up and maybe it's the same crew that had that building with all the federal casework collapse on 911 sparing a lot of the administration's friends embarrassments in court and maybe it's the same crew that got us to invade Iraq so their oil production could be reduced or controlled so that the price could go up and maybe its the same crew that had the mainstream media cover it all up and give us stories about Britney Spears, Al Qaeda and American Idol instead.
But a Conspiracy? That's just crazy talk, unless those guys in that crew were using box cutters to do the deed.
No box cutters, no conspiracy.
It is most certainly the invisible hand of providence.
Above All.
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Who let the oil market be manipulated?
The American public. We've had thirty years to curb our appetite for oil. We've done next to nothing and so we are paying the price yet again.
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gut feeling
i have had a gut feeling this was the reason oil was going up.
bahhhhhhhh
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What happened since the 2004 election?
What puzzles me about the oil market is why isn't the government manipulating oil prices? For anyone familar with the President's Working Group, aka Plunge Protection Team, and anyone who understands how the energy markets were rigged during the 2004 midterm elections, through the Goldman Sachs Commmodity index reweighting of gasoline, and through inventory manipulation of replacement oil in the SPR taken out during Katrina, we want to know, why not now?
One or two things comes to mind. First, it is still early in the election cycle. Two, manipulating gasoline prices didn't have the effect Republicans had hoped, they lost just about every seat that was up for reelection, and thirdly, the situation with the SPR provided a perfect opportunity, which doesn't exist at the moment.
One suspects oil prices are going higher, (since 2004) to pay for the deal they made with the devil. One benchmark of Republican dirty tricks, the Rovian, Faustian, bargain, is to confiscate taxpayer money, and put it into Republican campaign coffers. Perhaps Bush needs to square the account in the SPR before he leaves office?
The new rules for the various exchanges actually suggest greater regulation of traders, through margin requirements. These regulations can be changed at the drop of a hat, something which sends a chill through speculative traders. Then this is not a market driven by speculation. If it were, the government officials would have taken the other side of the trade, and driven the energy bulls out of town, just as they have kept the bond vigilantes in their place. (Rumor has it that the bond vigilantes now use gold to hedge inflation, because interest rates are a comfortable fiction).
The character of any market driven by speculators is high volatility, which is not evident in the energy market. Perhaps it all comes down to the dollar, which all the kings horses and men cannot manipulate. The Gulf states are going to drop the dollar peg, with the blessings of the US treasury, but what else could they do? If you consider the dollar, which is immune from speculative forces, at least for now, the case that oil is being subsidized in many places with FX reserves, the market is being priced rationally. At some point some rogue traders may take on the dollar, but only when it becomes obvious that its value is being manipulated higher, which does not seem to be the case.
The Chinese would dearly love to manipulate oil markets lower as well, since they subsidize energy to consumers, which includes you, Walmart shopper. Oil is probably a bargain, which is the final point worth making, and why the bulls are relentless in driving the price higher. There is no evidence that all the forces are anywhere near being in balance. However should the emerging BRIC nations have a collective recession, oil will collapse. That much seems clear.
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Ha! How many oil market investigations have there been in the last decade? 30? 100? 1000? Have any of them ever turned up a clever conspiracy to inflate oil prices?
Naturally, Salon writers will do everything they can to cherry-pick Republican involvement in any "investigation." And the purpose of that is to help Democrats win the next election.
But here I thought that higher oil prices were a good thing. Higher crude oil prices are the one thing -- probably the only thing (CAFE standards notwithstanding)-- that will get Americans to use less of the greenhouse gas-producing stuff. Aren't you all the same people who tell us that it is essential to do somehting about global warming? Like, right now?
Whatever. Wouldn't it have been nice if some smart economist at Salon (an oxymoron?) could have taken the time to point out the economic utility of futures markets. Markets regulate scarcity. If we were to drive down oil prices now, what would happen if there were a major interruption in supply? A war in Saudi Arabia? A hurricane in the Gulf of Mexico? A revolution in Nigeria? An evironmental catastrophe in the North Sea? What then? Do we ask the world to take numbers, and sign up for oil rationing cards?
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Oil is fungible
Oil is fungible. That's basically it. Right now OPEC pretends to have massive reserves and only lets some of it up to prop up oil prices, speculators pretend they have power over the price of oil but the truth is this:
Everyone has their pumps at max. Saudi Arabia, Iran, Venezuela, everyone pumps at max because they are greedy and want money now. There is no margin left for refineries. Speculators have no control over the oil prices, it's all bound directly to demand.
Every time oil dips just a tiny bit, companies, like airlines, other oil hungry businesses buy up as much as they possibly have. This is not speculation, this is reality. Oil is never going to be cheap again.
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@Elephant
Your point is well taken, higher prices should tend to favor the American consumer. If only those godless Chinese hadn't taken a page from the Nixon playbook, and gone to price controls. The China miracle has been a perfect example of the Republican split personality: gee isn't this great for profits, but what about their emerging military power, their record on freedom and human rights, and their unwillingness to play by the rules. Without the China problem, there is no energy problem.
Not to say the Chinese should all go back to mud huts, but even Reagan would have done something about it. I remember when he spent the Soviets into bankruptcy (official GOP boilerplate), now the Chinese are doing it to us.
Why don't you people take medication for your problem, (oh sorry just heard they're all tainted)...