There are plenty of reasons to upset with the Saudis, but the current spike in oil prices isn’t one of them. Undeniable proof that speculation will destroy the supply and demand paradigm, oil prices continue to rise despite a huge glut of oil on the world market.
It started with Egypt. With a Muslim Brotherhood takeover in that country, the fact that they now have their grimy hands on the Suez Canal may keep oil prices elevated for some time. That sent speculators scurrying to scoop up futures in order to lock in a price at a reasonable level. The Libyan situation just enflamed the situation, and no coincidence, Obama’s fingerprints are all over both of those rebellions.
Saudi Arabia is now having their own civil unrest, but in the meantime, they unilaterally increased oil production to make up for the loss of Libyan crude. Yes, there was no disruption of supply to anybody, anywhere. Yet the price rose. Now Saudi Arabia has announced that they are pulling back on that production. They have no takers. According to them-and verified a few months ago by the Energy Department, there is a glut of crude on the market, oil that is just sitting there waiting to be sold. What that means is oil companies are incurring costs to store this oil, and of course, they will pass that cost on to customers. We still have the speculators, but now we have this as well. And the price rises.
Obama’s energy goon Steven Chu actually said we needed this to happen. All part of going green, or devolution, however you want to look at it. The results are the same. This is classic cart before the horse thinking. They are replacing something with nothing. There is no green technology that can currently replace our oil fueled economy. If they come up with something, then great. They haven’t yet though, but that hasn’t stopped the Obama regime from implementing his half-assed scheme in the United States. I say the United States, because even though he is blocking production here, he is encouraging it in Brazil. In fact, the United States will bankroll deep water drilling by that country, and Obama has stated that he just can’t wait to buy their oil. Yet our potential remains untapped. And as long as Barack Obama is in the White House it will remain so.
So while the United States sits on energy reserves that rival the Middle East, the price of energy continues to rise, and struggling Americans are feeling the pinch.
I talked earlier about the speculators. Have a president announce oil, shale, coal and any other resource we have is on the table and watch what happens to oil prices. As I said, that won’t happen with this administration, so unless something happens outside the influence of the Obama regime, we can expect high prices for the foreseeable future.
Yes but look how much money Obama’s friends are making. Isn’t that nice. I don’t know how he plans to get re-elected with these policies. Maybe he believes he doesn’t need a second term to bring America to it’s knees. that seems to be his ultimate goal.
Hey, doesn’t Chavez have a company that makes voting machines?
Anything that can be done to limit energy use, and particularly, the ability to move freely, will be done.
Throw the sleeping air traffic controllers in the mix and we won’t be going anywhere.
Re: Oil Glut: Saudis cut production.
According to US oil industry spokesmen, domestic oil production is much higher now than ever in history. The refineries have so much crude in storage they literally cannot take any more delivery contracts. Actual sane people who work in the oil business know that speculators are responsible for high gasoline prices. Rather than jumping up and down like a bunch of screaming monkeys, why don’t you do some actual sane research – look it up for yourself – domestic oil production is at an all time high. Also, go and talk to any sane oil exploration geologist and get a reality check on the cost of processing most of the extremely low grade of your so-called huge reserves in the U.S. The cost of energy will always be priced at the maximum that people will pay — that is called “free market” which includes corporate price fixing.
We’re pretty much on the same page here, although I think that speculation alone can’t account solely for the current price rise. Definitely a major factor though.
Blaming this on speculators is just silly.
What is a speculator?
That’s what the market is, speculators speculating on what world prices will do, which is why gold is flirting with $1900 an ounce.
That’s how a market works, people speculate on what it is worth and buy or sell accordingly. That’s how every market works to one degree or another.
Price fixing is another straw dog.
The price of oil is fixed by all the factors in the world market, including world demand, games that the Saudis et al play with production, terrible US energy policy, the falling value of the dollar, and so on.
There is no secret cabal of “speculators” causing this problem. All these people that are buying oil futures at today’s prices would lose money if the US suddenly started green lighting oil drilling and refining, because the faith in those prices would collapse…that’s how it works.
I should have bought gold at $1000, but since I “speculated” that it would never go much over $1000, I didn’t cash in, so there you have it.
The people who bought gold at $1000 and are selling now, are making a fortune. Will gold stay this high? of course not, nothing ever does, but blaming the price of oil on speculation is kind of like blaming yourself for the price of a home, since you were willing to pay what you did.
I never suggested there was a secret cabal of speculators. You or I could be a speculator on a given day. As for the price of oil being affected by multiple factors, that is true on some level, but in recent months we’ve seen the price rise even in the face of an oil glut. The demand wasn’t there, but the price rose anyway. I think this has more to do with “going green” that what traditionally affects oil prices.