Scam: High Fuel Prices
 

The price per barrel is not directly related to production and consumption.

Investor/brokers are gambling with higher prices and winning.

How do we stop them?

Its amazing how so few can effect so many.

That is the million dollar question.

if it's true that the price run up is more a function of speculation than it is of actual and expected supply and demand conditions, then the market will stop them the same way it has corrected real estate speculators and the housing bubble. no conspiracies necessary!

You stop them by having the government pass a law whereby anyone who wants to invest in oil commodities must put up 100% of their investment instead of the 10% needed now. Futures markets are cleared of speculators overnight.

Switch to a new form of energy. Until then, there is nothing we can do to stop them. After all, this is a capitalist world. If people are making money selling/trading oil, good for them. I happen to believe that something as vital to our nations economy, national security, and overall well being such as energy should not be controlled by nations that hate us (Iraq, Iran, Nigeria, Venezuela, etc...) Do you really think they want prices low?

If you are wondering how you can make money (like a true capitalist) off of this energy crisis, invest in alternative energy. The price of oil is only going to go up long term. There is only so much oil in the ground, and we are using it up. The demand for oil continues to increase everyday. And this commodity has been shown to not exactly follow the laws of supply and demand (meaning the prices go up even as demand levels off). It is arguably the most valuable commodity on the face of the Earth. One day it is going to get so expensive that it makes economic sense to switch to an alternative source of energy. I believe that day was about 2 years ago...I suspect the majority of the American public will come around when gas hits $6/7 a gallon.

Crude oil was a one time gift to mankind. It was nice while it lasted... now lets move on.

The price of gas keeps going up, and we keep buying it. Oil companies showing record profits. Why would the price come down if we keep buying?

Though if it did come down, it sure would be nice. Airlines would have it a bit easier, food prices would come back down, etc.

Good news is that it has dropped over 7 dollars in the past week. We shall see if it keeps up. It is hard to be optimistic though.

One answer is synthetic oil, another one, hydrogen.We are not buying the way we did last year,according to some reports,so the demand has gone down but the prices keep going up.Oil prices drop like $12 but not even .01 at the pump...weird right?? then oil prices go up and you see the prices at the gas station up almost immediately.

please leave bush ....please....you're killing us

At what point will it be cheaper to fill the wings with cheap vodka instead of jet A?:D

BINGO! This would be a huge help.

ok - why shouldn't I be able to loan money to a guy so that he can buy oil futures, sex toys, online degrees, or an over-priced abode? why is it any of Congress's business?

this is America - supposedly a free country. passing laws prohibiting trade agreements which two parties enter into voluntarily for mutual benefits is flat out UN-American. if someone wants to loan the $$$ (at his own risk!) to someone else to speculate in oil futures, so be it. if they're wrong, they'll both get what's coming to them... in the long run, they don't injure anyone else - they just ensure the markets remain liquid.

So what happens when oil prices plummet, and the banks come calling for those loans. I seem to remember learning about a similiar situation leading to the great depression. Just replace commodities with stock.

Because the taxpayers foot the bill when the boom bust. When the Fed pumps liquidity into the market, hundreds of billions of dollars, or say underwrites Bear Stearns for $30 billion and takes over the risk, WE PAY for the market excesses. Who paid for Enron, World Com, Savings & Loan Bailout? The answer; the working class and taxpayers.

Noticed when Exxon reported quarterly that production was down 5.6%. Thats a lot of gallons. Wonder why???

Because the new-found greed of the "wannabe Robert Kiyosaki-Rich Dad, Poor Dad types" is driving prices of almost everything through the roof. First it was stocks, then real estate, now it's gold and oil, what's next? Food and Water?

Those who understand the market get in first and make all the money at the beginning, then they write books about it and start websites to make even more money off of the suckers who'll follow. Next, the followers catch on and send the price of everything soaring, but they usually end up working harder at not having to work than anybody else, waste tons of time and money, and assume way too much risk. Finally all the rest of the wannabes buy in but the prices are so over-inflated that the market can't keep up with the greed, so it collapses.

If you become an investor because of all the buzz you hear about people getting rich, you're already too late. If you decide to invest because of an infomercial or website you've seen, you're already too late. If you're going to invest, do it responsibly, expect steady, trackable growth, be prepared for some losses, and QUIT TRYING TO GET RICH QUICK. You're only screwing yourselves and pi$$ing off everybody else with your greed.

Oil prices are high because we haven't learned to consume less; therefore, the people speculating saying that oil is at a sound price are correct. Until we stop using less, they'll continue to win and we will lose.

-Fatty

Hey Folks, Capitalism is great and all but remember, the the market is not infallible so we cannot put everything in the hands of the market. Some regulation is necessary. I don't claim to know to what extent but I do know that the market is far from a perfectly well oiled machine.


As for the reason for high oil prices; In addition to the high demand in China and India, given the slow economy and the weak US dollar, oil is in demand as an investment.

Are you serious with that statement? Sit down and think how much the price of everything around you has gone up over the last 12-18 months. I did not say you could not loan someone money to invest in oil. I simply said that the investor should be required to have more "skin in the game" than a lousy 10%. People act far more rationally when their own money is involved. We have seen the same mentality at work with the dot com crash, and the housing bubble. People will get in over their heads with the hopes of striking it rich. I can't stand big government, but every law governing markets was put in place after somebody got screwed. Oil is a national security concern, nothing else has such a wide ranging effect on our economy and daily lives.

When you say they'll get what's coming to them if they're wrong, who do you think ultimately foots the bill every time markets loose touch with fundamentals?

yea like bush controls the commodity markets.... geez.

ok... to the "taxpayers end up footing the bill argument." true - occassionally, the taxpayers get saddled with the bill (this rarely happens - with bear stearns, we don't know if the taxpayers will bear a burden - the answer is that they most likely won't). i'll be the first to say that while we shouldn't interfere with voluntary financial transactions, we shouldn't "bail out" those who lose their pants in those same transactions. when we do, we create a "moral hazard," which only encourages more speculation in the long run (which can be painful during short run spurts as would be the case w/ oil now, if it is indeed in a "bubble").

whether it's 10% or 100%, SOMEONE (other than the taxpayers) has their skin in the game. if a speculator is borrowing 100% and defaults, he'll pay a price regardless (he'll probably have a tough time borrowing next time around). more importantly, the lender will lose a LOT of skin. in the short term, non-participants in the transaction may pay a price in the form of market volatility - but as long as we maintain unfettered markets, the speculators themselves will beat out the volatility in the long run.

freedom will be much less painful in the long run than intervention. intervention is always fraught with unintended consequences. in the case of a bailout, that unintended consequence is "moral hazard," which is every bit as bad as interfering with free financial transactions in the first place.

by the way, fuel hedging is every bit a form of speculation as what you describe. the act of fuel hedging pushes prices up in the same way as speculation. in fact, if you look at how leveraged the airlines are, they probably have a lot less equity behind the transaction than you would require!

Funny thing is the Democrats took control of the House and the Senate two years ago promising to change everything and they did. Consumer confidence has fallen, the price of gas has gone up about $75/barrel in 2006 to over $110, food prices have climbed, Congress is still trying to peddle ethanol as an wrong answer to the wrong question...

Name one major piece of legislation the Ds have passed, especially on energy. Can't drill, can't explore, can't build wind farms because they are ugly, can't do nuclear because it is unsafe... and on and on and on. BUT Hillary wants to tack on a 'windfall profits' tax. How does that help the man on the street? It doesn't but it does whack those mean old 'BIG OIL" guys. Right.. simple solutions for simple minds.

(note: two things to watch for.. the use of the word big and someone touting a fee, tax, revenue enhancement and noting that for the average taxpayer it will only be x%. First big equals nefarious, greedy in the language of politics unless it is spending your money and second, most of the country does not pay diddly in taxes so that means anyone who is making a few dollars is going to get cleaned. )

oil has the widest-ranging effect on our daily lives???

ok, tell that to venezuelans, who continue to live in poverty despite the fact that the value of their greatest national resource has soared. clearly, FREEDOM has a greater effect than the price of oil.

tell that to the cubans, who have, on a regular basis, risked their lives to cross the straits of florida in shoddy dinghies to escape the castro repression. they did this when oil was below $20 per barrel, and they continued to do it as the price of oil soared. FREEDOM clearly had a greater effect than the price of oil.

tell that to the mexicans, who despite the economic slowdown here, continue to risk their lives to cross the arizona desert in hopes of finding a better livelihood here. again, they continue to do this despite a soaring value in their own natural resources - unfortuntely, their natural resources are controlled by the state while the free market invests in ours. again, clearly FREEDOM has a greater effect than the price of oil.

tell that to the north koreans. they have no oil as a natural resource. but, regardless of oil's price, they have been suffering repression and famines for years. i doubt that they find oil having much impact on their lives.

in my personal life here, i find MANY things that are more important to my DAILY life and will continue to be more important in the long run. oil is only peripherally a national security concern - and it certainly doesn't have nearly the most wide-ranging effect on my life or that of most human beings.

be careful what you wish for. if you think the price of oil is a "scam" and is a bubble, there are plenty of easy ways to profit from that hunch. go for it - i won't loan you the dough, but you probably will find someone that will (or risk your own capital if you wish). i don't know what it's going to do, so you won't find me putting $$ where my keyboard is - i'll just stump for freedom instead.:)

The taxpayers almost always foot the bill. Remember the savings and loan bailout 20 years ago? What about Enron & Worlcom, how many people were affected by that? First, consider how many workers and investors lost everything they had in addition to the people that were screwed while Enron was manipulating energy supplies out west to drive up prices. Finally, when the utilities in Ca. went broke who eventually bailed them out paying much higher rates for energy? The Ca. taxpayer. As for Bear, how bout the 14,000 workers or the shareholders? I bet they consider themselves "injured" even though you stated earlier "they don't injure anyone else" with speculation. Don't think it's a bailout? The Fed backed the riskiest part of Bear's portfolio with $30 billion of our money. Even if that money isn't lost, we still pay the price with a further de-valued dollar. Printing money to bailout Bear certainly costs the taxpayer in the long run. While letting Bear fail might have been a cure worse than the disease, the issue is unchecked speculation. Democracy and Capitalism are the best we have to offer, but they both require checks and balances. Ethics aren't something we're all born with, especially when massive sums of money are involved. The result when speculation creates bubbles and collapses is always increased regulation, something your against. Regulation is almost always reactionary, after free markets have been abused. I believe in strongly Capitalism and Democracy, but even our founding fathers new checks and balances are the key. History has taught us that some people will cross the line to make a buck.

The discussion is about oil and speculation, of course nothing is more important than our freedom.

Oil is the single most important commodity to this country. It is clearly a matter of national security. The government creating the SPR illustrates how vital it is to our survival in the near future. The fact that we fought to protect Saudi Arabia's oil from Saddam in Desert Storm shows how important our gov feels it is to national security.

No more long posts please, I'm a terrible typist!:)

we're not going to agree - which is fine, because reasonable people can disagree. however, in defense of our founding fathers, their checks and balances were on branches of government, not markets :).

Check this out. Takes about an hour for all eight videos.

Interesting story about oil pricing.


1.) http://www.youtube.com/watch?v=NbakN7SLdbk
2.) http://www.youtube.com/watch?v=UGGjbDjnNzw
3.) http://www.youtube.com/watch?v=q39ic04vhNo
4.) http://www.youtube.com/watch?v=ZKCyCYz_aHY
5.) http://www.youtube.com/watch?v=7TYmSGwAumk
6.) http://www.youtube.com/watch?v=fbwMOvV6ctg
7.) http://www.youtube.com/watch?v=L5HGHsy3H_0
8.) http://www.youtube.com/watch?v=CC61X78-OI0


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Sure they are for the branches of government, which is how important the founding fathers felt it was to have oversight and accountability. We'll agree to disagree, good day.

geardown - thanks. i checked out a bit of it. one thing is indisputable - there is a significant amount of energy that we currently are unable to tap due to government intervention. this includes prudhoe bay, anwr, offshore oil, nuclear power, venezuelan/mexican/etc oil (not due to our gov't's intervention, but theirs) among others. at $110+ per barrel, a lot of formerly unattractive reserves become very attractive. however, threats by politician to expropriate the profits of "big oil" decreases the incentives to invest in and tap these reserves, doing little to stabilize (or reduce for that matter) the price of oil.

there is little direct action the government can/should take to bring down the price of oil other than to let the markets do their job while the government maintains sound and non-inflationary monetary policy. as for the latter, it's certainly debatable whether or not our government has done its job in that respect (as carl pointed out!).

You obviously think oil has little to do with your life. How would you feel about sitting in the dark, freezing, with no food except what you could find growing in your yard? No lights, no heat, no refrigeration, no plastics, no transportation. Without oil or it's equivalent, we'd be back in the stone age. In today's civilization, EVERYTHING requires oil. Until a substitute is found, the oil better not stop flowing.

i said (nor indicated) no such thing. i was responding to a sweeping statement that oil had the most wide-ranging effect on our daily lives. certainly it plays a critical role in multiple applications - but a more wide-ranging effect than anything else? I totally disagree.

i don't disagree that we need energy (oil being one source) - hence my stance that we need to allow the markets to work unfettered. we won't run out of oil in an unfettered market.

Guys, not to be an ass.
But in Europe, Gas is over a euro a liter!!
4 liters in a gallon! SO STOP *****ING!!
You do the math!

Olympic

Thank you. I am so sick and tired of the American mentality that we are "entitled" to cheap fuel. Shut the hell up and drive a smaller car.

Fuel (gas or diesel) is not inherently more expensive in Europe.The price is higher because of taxes.

bbtp,

I agree with you that punishing corporations for profits is a ridiculous idea. Aside from being against what our economy is all about, it simply won't solve the problem. I am all for easing restrictions to known sources of domestic energy.

I manage to get an extra 100 miles to a tank of gas in my car (2005 Chrysler Pacifica) by doing a few small things:

Use cruise control even on 35 mph streets
Drive 55 mph on highway (hard for some people, I know)
Put car in neutral when stopped at a stop light
Take off from the stop light slowly
Keep tires at max pressure
Put car in neutral and coast whenever possible
Use air conditioning only on the highway and shut off the a/c portion leaving the fan on letting the air recirculate once the air is cool
Don't haul around extra weight in the car
Regular oil changes and clean air filters
Reduce drag by having windows closed whenever possible

If everyone did this, the demand would go way down.
..just my .03 (price went up from .02 because of fuel prices)