GOP News Flash: The real reason for soaring gas prices

[American Horse]

Speculators can't drive up oil prices unless they have the means to store the oil outside of the commodities market. Inventories are below expectations & the Baltic Dirty Tanker Index is low which means speculators are not renting oil tankers to store oil off-shore. There is a supply problem brought on by government!!!!!!!!!!!!!!!!!!

Not so; although in a commodity futures contract the purchaser promises to take possession at some fixed future date, the purchaser may instead sell that contract and never take actual possession. Speculators purchasing options do not promise to take physical possession of the commodity, in this case oil. They may choose to or they may simply sell the option and reap the profit or the loss making that decision at the options exercise date, and the demand they create in the market can and does drive up prices.

 

[Late2TheParty]

PAY ATTENTION (and you might learn something):

This is why you pay what you pay for gasoline:

U.S. exported more gasoline than imported last year

For the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.

Bloomberg writes that to offset weak U.S. demand, refiners exported 439,000 barrels a day more than were imported the year before. In 2010, daily imports averaged 269,000 barrels, according to the Petroleum Supply Monthly report.

Imports of crude oil and related products fell 11% last year, reaching a level not seen since 1995.

News of record gasoline exports comes as the pump price rose today for the 22nd straight day ($3.78 a gallon average) and the Energy Department reported separately that gasoline inventories fell last week while crude oil inventories and imports rose.

You are paying what you pay for gasoline because you are competing for it with the rest of the world.

U.S. refiners simply sell to whoever will pay them the best price, all things considered. If you won't pay 4 bucks a gallon for it, they'll sell it to someone who will.

btw, keep that in mind when you're foolishly thinking that the Keystone pipeline bringing oil to US refiners is going to magically lower gasoline prices...

...they'll sell THAT to the highest bidder too.

U.S. exported more gasoline than imported last year

Don't get it? Read it again, and again, until you do.

We export GAS, we import OIL.

China's car sales are up 30% year over year in February. That's where excess supply is going.

 

[American Horse]

U.S. exported more gasoline than imported last year

Don't get it? Read it again, and again, until you do.

That's a red herring. We don't import gasoline, but of course we do export it so it goes without saying that we'd export more than we import (zero). It's a comparison that goes without saying, and is made for the confusion it sows.

Furthermore it's a world market, and we sell to it. The only way that could be precluded would be to nationalize the oil companies.

There is oil in S. Texas (the Gulf) that cannot be piped east because of a pipeline bottleneck, and the price is lower than the world market because of the glut there. It makes perfect sense that they would refine it and sell it at a premium, and part of that refined product would be exported, since they can't sell it profitably (glut) in their own region.

It's not driving up the price of gasoline elsewhere, and it is applies favorably to lower the US trade deficit.

 

[Dick Tuck]

Crude oil prices are a futures game. People invest and drive up the price because they assume that oil prices will go up. What would cause them to believe that oil prices will go up under the Obama administration? Look around you boobs.

So is orange juice, hog bellies, cotton, coffee, wheat, corn and hundreds of other things.
I find it funny that some people are only concerned about oil (or energy) futures.

Nobody is betting on an Israeli attack on Iran driving up the price of orange juice.

Certainly not pork bellies.

 

[Dick Tuck]

Speculators can't drive up oil prices unless they have the means to store the oil outside of the commodities market. Inventories are below expectations & the Baltic Dirty Tanker Index is low which means speculators are not renting oil tankers to store oil off-shore. There is a supply problem brought on by government!!!!!!!!!!!!!!!!!!

Not so; although in a commodity futures contract the purchaser promises to take possession at some fixed future date, the purchaser may instead sell that contract and never take actual possession. Speculators purchasing options do not promise to take physical possession of the commodity, in this case oil. They may choose to or they may simply sell the option and reap the profit or the loss making that decision at the options exercise date, and the demand they create in the market can and does drive up prices.

Not quite. Anyone who can pass some silly litmus literacy test for the commodity exchange (in any case, anyone), can also buy and sell the actual future of a product, with a promise to accept shipment or deliver. They can also sell that contract on the open market. As it stands today, only 1/3 of the actual futures contracts on oil, are between people who can actually deliver or accept a commodity. The other 2/3rds are just gambling.

 

[auditor0007]

There has been a lot of blame for oil prices on President Obama lately.
The GOP needs to emphasize this point in order to sway voters.

But when we look at the facts, there are simply too many speculators profiting from soaring gas prices. In short, the massive oil corporations and Hedge Fund managers are the real culprits. Here is a document leaked from 2008:

Energy holdings-wti-crude-oil

There is a deliberate effort to inflate the already outrageous prices of refined crude. Rick Ungar of Forbes magazine (not a flaming liberal rag, mind you) explains that refineries have been systematically shutting down in order to reduce national supply and jack up prices. Moreover, we see oil producers looking to sell domestic oil in foreign markets in order to boost demand. Not that there is anything illegal about that, but it certainly isn't helping out the American consumers by artificially increasing demand and reducing supply when we need the stuff to get to work and to get the economy back on track.

The Truth About Obama, Oil And The Gasoline Blame Game-Part Two - Forbes

Congressman Peter Welch (D-VT) tells how apprx 50 cents on each gallon of gasoline purchased goes to speculators rather than to refinement and production costs. That's about $15 going to Banking industry like Goldman Sachs every time you fill your tank!

After rumors send oil prices falling, Welch renews call on President to tap nation's oil reserves

Nevertheless, the GOP is still calling for less govt regulation in banking and oil industries. In spite of the evidence to the contrary, some of us continue to blame Obama for the lack of and real conviction to control rising prices.

If anything, this sets the stage for MORE govt regulation, not less. Unless, of course, everyone is happy with gas prices where they are currently.

Yep, this is free market Capitalism at its best. And you can sure as hell expect more of this if the GOP (aka "Frontmen for the Oil Industry") ever take back the White House.

Sorry but I must disagree; it is Obama's fault!

 

[KissMy]

Speculators can't drive up oil prices unless they have the means to store the oil outside of the commodities market. Inventories are below expectations & the Baltic Dirty Tanker Index is low which means speculators are not renting oil tankers to store oil off-shore. There is a supply problem brought on by government!!!!!!!!!!!!!!!!!!

Not so; although in a commodity futures contract the purchaser promises to take possession at some fixed future date, the purchaser may instead sell that contract and never take actual possession. Speculators purchasing options do not promise to take physical possession of the commodity, in this case oil. They may choose to or they may simply sell the option and reap the profit or the loss making that decision at the options exercise date, and the demand they create in the market can and does drive up prices.

The commodity futures contract still represents physical oil. That oil is still delivered from the supplier to the consumer. If investment banks took delivery & resold/rolled over that oil it would increase the amount of supply driving down the price. The physical oil has to be stored somewhere (preferably hidden from inventory) in order to drive up prices. Last time they keep the oil on a bunch of tankers out in the ocean where it did not show up in inventory.

WHERE ARE THE OIL THE SPECULATORS HOLDING ALL THAT OIL???? Inquiring minds would like to know.

 

[Dragon]

Without letting the manipulators off the hook, they are able to do what they are doing only because the supply/demand ratio of oil has gotten worse. Otherwise, there would be no room for it.

This is not unlike the OPEC oil embargo of the 1970s, whose immediate cause was political manipulation by an oil cartel many of whose members were pissed off by the Yom Kippur War. But OPEC would not have been able to pull that off except that the U.S. hit its national oil peak in 1970 and, after that, became dependent on oil imports.

I'm not saying that speculation and profiteering aren't factors making the situation worse, but the geological and global-economic reality is that the era of cheap oil is over, and it's never coming back.

 

[Dick Tuck]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

A month ago, I reminded everyone that ExxonMobil's CEO, Rex Tillerson, told Senator Maria Cantwell (D-WA) at a Senate Commerce Committee hearing that the oil would be about $60-70/barrel if the speculators in oil futures were not driving up the price. (See the linked article for the testimony, and the link to the hearing itself).

...

Secretary Reich reminds us that, historically, 30 percent of oil futures' trades were conducted by speculators -- today, that number is 64 percent, and it is a relatively small group of traders.

...

 

[KissMy]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

A month ago, I reminded everyone that ExxonMobil's CEO, Rex Tillerson, told Senator Maria Cantwell (D-WA) at a Senate Commerce Committee hearing that the oil would be about $60-70/barrel if the speculators in oil futures were not driving up the price. (See the linked article for the testimony, and the link to the hearing itself)....

Secretary Reich reminds us that, historically, 30 percent of oil futures' trades were conducted by speculators -- today, that number is 64 percent, and it is a relatively small group of traders....

Exxon-Mobil's CEO, Rex Tillerson only knows what his cost of supply is. Exxon-Mobil only makes up a small slice of the oil market. Why is he not supplying all the oil the market needs to make enormous profits at $126 Brent Crude World Price? - Someone is limiting his supply capacity.

 

[thereisnospoon]

Speculators can't drive up oil prices unless they have the means to store the oil outside of the commodities market. Inventories are below expectations & the Baltic Dirty Tanker Index is low which means speculators are not renting oil tankers to store oil off-shore. There is a supply problem brought on by government!!!!!!!!!!!!!!!!!!

Not so; although in a commodity futures contract the purchaser promises to take possession at some fixed future date, the purchaser may instead sell that contract and never take actual possession. Speculators purchasing options do not promise to take physical possession of the commodity, in this case oil. They may choose to or they may simply sell the option and reap the profit or the loss making that decision at the options exercise date, and the demand they create in the market can and does drive up prices.

The commodity futures contract still represents physical oil. That oil is still delivered from the supplier to the consumer. If investment banks took delivery & resold/rolled over that oil it would increase the amount of supply driving down the price. The physical oil has to be stored somewhere (preferably hidden from inventory) in order to drive up prices. Last time they keep the oil on a bunch of tankers out in the ocean where it did not show up in inventory.

WHERE ARE THE OIL THE SPECULATORS HOLDING ALL THAT OIL???? Inquiring minds would like to know.

Interesting observation. During the so called "Arab oil embargo" vs the US, the news media shot film of tankers parked off the NJ/NY coast waiting to be unloaded. Until then, we Americans were told there was a severe shortage. The scam was that while we were told ot conserve gasoline, that brought into play the term "allocation". So as we did our civic duty and slashed our consumption of fuel, the so called allocation was reduced in proportion to fuel used. WTF?!!!! Use less, receive less. Nice going. As a result, we were introduced ot the term 'stagflation'....The eocnomy was at a standstill while consumer prices continued to rise.
As I recall, soon after the parked tanker scam was uncovered, the 'embargo' was lifted. Gas prices tumbled.

 

[thereisnospoon]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

A month ago, I reminded everyone that ExxonMobil's CEO, Rex Tillerson, told Senator Maria Cantwell (D-WA) at a Senate Commerce Committee hearing that the oil would be about $60-70/barrel if the speculators in oil futures were not driving up the price. (See the linked article for the testimony, and the link to the hearing itself).

...

Secretary Reich reminds us that, historically, 30 percent of oil futures' trades were conducted by speculators -- today, that number is 64 percent, and it is a relatively small group of traders.

...

WHAT?!!!!!
Taxing supply only causes prices to increase as those taxes are passed along to the end user.
BTW Commodities trades ARE taxed.....Taxes on Commodities Trading.
Tillereson told Cantwell exactly what she needed to hear. The end game is 'blame someone else'.
Newsflash...If there were no market to trade commodities, the prices for them would have to fixed by a group or entity placed in charge of this.
Are you sure you desire to see price fixing beome the procedure?

 

[Toddsterpatriot]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

A month ago, I reminded everyone that ExxonMobil's CEO, Rex Tillerson, told Senator Maria Cantwell (D-WA) at a Senate Commerce Committee hearing that the oil would be about $60-70/barrel if the speculators in oil futures were not driving up the price. (See the linked article for the testimony, and the link to the hearing itself).

...

Secretary Reich reminds us that, historically, 30 percent of oil futures' trades were conducted by speculators -- today, that number is 64 percent, and it is a relatively small group of traders.

...

To stop Wall Street from playing hardball with your hard-earned money, we should enact a 70 percent tax on profits from oil speculator transactions. Note, this is not a tax on oil itself or even on oil companies. It is a tax on speculative profits made on Wall Street trading desks.

What is an " oil speculator transaction"?

 

[The T]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

A month ago, I reminded everyone that ExxonMobil's CEO, Rex Tillerson, told Senator Maria Cantwell (D-WA) at a Senate Commerce Committee hearing that the oil would be about $60-70/barrel if the speculators in oil futures were not driving up the price. (See the linked article for the testimony, and the link to the hearing itself).

...

Secretary Reich reminds us that, historically, 30 percent of oil futures' trades were conducted by speculators -- today, that number is 64 percent, and it is a relatively small group of traders.

...

To stop Wall Street from playing hardball with your hard-earned money, we should enact a 70 percent tax on profits from oil speculator transactions. Note, this is not a tax on oil itself or even on oil companies. It is a tax on speculative profits made on Wall Street trading desks.

What is an " oil speculator transaction"?

You reckon it will make them think a bit?

 

[Toddsterpatriot]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

To stop Wall Street from playing hardball with your hard-earned money, we should enact a 70 percent tax on profits from oil speculator transactions. Note, this is not a tax on oil itself or even on oil companies. It is a tax on speculative profits made on Wall Street trading desks.

What is an " oil speculator transaction"?

You reckon it will make them think a bit?

No, not even a little.

 

[The T]

To stop Wall Street from playing hardball with your hard-earned money, we should enact a 70 percent tax on profits from oil speculator transactions. Note, this is not a tax on oil itself or even on oil companies. It is a tax on speculative profits made on Wall Street trading desks.

What is an " oil speculator transaction"?

You reckon it will make them think a bit?

No, not even a little.

When you have lots of other people's cash, I guess one could care less...Free market on the way out?

 

[KissMy]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

A month ago, I reminded everyone that ExxonMobil's CEO, Rex Tillerson, told Senator Maria Cantwell (D-WA) at a Senate Commerce Committee hearing that the oil would be about $60-70/barrel if the speculators in oil futures were not driving up the price. (See the linked article for the testimony, and the link to the hearing itself).

...

Secretary Reich reminds us that, historically, 30 percent of oil futures' trades were conducted by speculators -- today, that number is 64 percent, and it is a relatively small group of traders.

...

To stop Wall Street from playing hardball with your hard-earned money, we should enact a 70 percent tax on profits from oil speculator transactions. Note, this is not a tax on oil itself or even on oil companies. It is a tax on speculative profits made on Wall Street trading desks.

What is an " oil speculator transaction"?

Will the government pay me 70% on all my losses?

 

[Toddsterpatriot]

Want to Lower Gas Prices to $3.00, Now? Tax the Oil Speculators, Now

To stop Wall Street from playing hardball with your hard-earned money, we should enact a 70 percent tax on profits from oil speculator transactions. Note, this is not a tax on oil itself or even on oil companies. It is a tax on speculative profits made on Wall Street trading desks.

What is an " oil speculator transaction"?

Will the government pay me 70% on all my losses?

No kidding.

I bet I could come up with 5 ways to show a profit on crude and a loss on the "oil speculator transaction". I'll be rich!

 

[Papageorgio]

Poor Dems, blamed Bush, now it is biting them in the ass, when Obama is blamed.
lol!

Dems are so hypocritical.

I'm sitting back and enjoying the show and all the blame they are spewing so their beloved leader doesn't get the blame. Have we heard Pelosi on this?

Lol!