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Speculators blamed for rising oil, gas prices

The Seattle Times -- U.S. demand for oil and refined products — including gasoline — is down sharply from last year, so much that the United States has become a net exporter of gasoline, unable to consume all it makes.

Yet oil and gasoline prices are spiraling upward.

The price of oil topped $106 a barrel and a gallon of regular unleaded gasoline averaged $3.57 a gallon Tuesday — thanks again in no small part to rampant financial speculation on top of fears of supply disruptions.

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Submitted Feb 22, 2012 By: EVH_1984

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E-Squirrel Champion Author Orange County Posts:3,012 Points:819,060 Joined:Feb 2005	Message Posted: Feb 24, 2012 7:23:32 PM Ignore E-Squirrel Report Abuse mmproteus explains: 'the tension in the Persian Gulf cannot itself cause higher gas prices. Without speculators there is no transmission mechanism for the tensions to affect the price of gas or oil. To say the cause of higher prices is the tension in the gulf and NOT speculators, is ignorant.' Not really. Speculators affect neither supply nor demand, being neither producers nor consumers. What they do is translate assessments of THE RISK OF REDUCED SUPPLY into price signals. If reduced supply fails to occur, the speculator will lose money on his contract. By this translation, futures speculation tends to reduce consumption early on, conserving supplies, and tending to increase production before a shortage actually occurs. Since so few people understand the operation of forward markets, there is often a mistaken belief that such markets serve only to raise prices, something that cannot be done without actually increasing demand.
Anddy_viper888 Sophomore Author New York Posts:195 Points:10,545 Joined:Feb 2011	Message Posted: Feb 24, 2012 2:50:21 PM Ignore Anddy_viper888 Report Abuse OK
confetti Veteran Author Tampa Posts:354 Points:361,540 Joined:Jan 2006	Message Posted: Feb 23, 2012 9:05:28 AM Ignore confetti Report Abuse Good posts by Thoroughbred, BooHooMI, LostToo and gawxnative. I agree that the media/liberal establishment has created a buzzword and made speculators the "boogeymen" supposedly to blame for high prices. The truth is that government taxes, fees and regulations are largely responsible for the high price of gas, and accusing speculators is misdirection. I agree that these "speculators" are, in reality, our senior citizens and others with investments. And I agree that, as a consumer, I also hope the bubble bursts, and gas prices come down -- investment is gambling, and it doesn't always pay off. For those that criticize the speculators, I sincerely don't understand the argument that investors are capable of affecting prices any more than someone betting on a sports team affects the outcome of the game. The articles I have read so far about speculation just make conclusory statements that speculators are the problem, without giving any supporting facts or explanation. If someone could point me to a logical explanation for blaming speculators, I would like to read it and educate myself about the opposing viewpoint. I understand that fraud and crony capitalism exist, and if there's evidence of wrongdoing by speculators in some way, or that the market is rigged, I'll change my opinion.
gawxnative All-Star Author Atlanta Posts:510 Points:229,865 Joined:Aug 2006	Message Posted: Feb 23, 2012 7:49:39 AM Ignore gawxnative Report Abuse YEP, here's hoping this bubble bursts again (like in fall of 2008) but hopefully without the major recession
numbers Champion Author North Dakota Posts:2,801 Points:850,040 Joined:Aug 2004	Message Posted: Feb 23, 2012 7:47:59 AM Ignore numbers Report Abuse Naturally
Amendes Champion Author Fresno Posts:2,510 Points:530,340 Joined:May 2011	Message Posted: Feb 23, 2012 3:09:11 AM Ignore Amendes Report Abuse OK
tomok Champion Author Portland Posts:32,965 Points:2,343,560 Joined:Aug 2006	Message Posted: Feb 23, 2012 3:08:08 AM Ignore tomok Report Abuse Speculators blamed for rising oil, gas prices. Speculators, manipulators and the banks continue to unfairly and unjustly make the driving public pay higher prices at the pump for their benefit. The United States has become a net exporter of gasoline, unable to consume all it makes. Big oil exports fuel and natural gas to the world for higher profits. Barry supports natural gas and oil production for sale to the world to help pay for his spending gone wild addiction. Whatever the size or shape of the vehicle, Produce and ‘Drive’ vehicles with high MPG, are very reliable, have a ‘reasonable’ cost and a good ‘value’ for the money. Consider using ‘other’ forms of transportation to help lower your cost. The price of fuel at the pump is too high! 12/22/2012!
LostToo Champion Author Illinois Posts:4,392 Points:975,315 Joined:May 2009	Message Posted: Feb 23, 2012 12:40:25 AM Ignore LostToo Report Abuse Here we go again....... Lets all jump on the band wagon and blame the spector known as "Speculators."
BooHooMI Champion Author Michigan Posts:1,556 Points:344,610 Joined:Sep 2010	Message Posted: Feb 23, 2012 12:18:06 AM Ignore BooHooMI Report Abuse Everyone with a 401K is a speculator. In Michigan the teachers have 40% of their 401ks in oil, yet vote for the first Marxist President who has set destroying oil companies as a goal of his, AG Holder, Soros', Van Jones and others of their ilk in the First Communist Revolution in the United States. Ignorance has become their most valuable commodity. Their zeal to accomplish this goal is genuine, but, as the law of history has proven, they are doomed from the start. The end game will be the death knell of America.
MidNJ Champion Author New Jersey Posts:7,546 Points:1,171,810 Joined:Sep 2009	Message Posted: Feb 23, 2012 12:04:48 AM Ignore MidNJ Report Abuse Throughbred, Unfortunataly - allowing unrestricted "Drill Baby Drill" is not the answer. We must look to other solutions!!
Blue_Cruzer Champion Author Lexington Posts:7,515 Points:1,668,610 Joined:Mar 2007	Message Posted: Feb 23, 2012 12:02:17 AM Ignore Blue_Cruzer Report Abuse I knew that.
Throroughbred Champion Author Cleveland Posts:1,031 Points:1,210,770 Joined:Jun 2007	Message Posted: Feb 23, 2012 12:00:38 AM Ignore Throroughbred Report Abuse The speculators would have a much different future to speculate about if we were allowed to drill, if permits would again be gettiNG issued. if all the gulf rigs were allowed to get back into production, and the XL pipeline were allowed to start construction.....there would a lot different future and a much lower price at the pumps. Oh yes and much lower EPA regs. Free our own production and our own resource just like the natural gas industry has done.....an abundant supply, tremendous resources and very little EPA regs has led to much much lower NG prices period.
kgbellman Champion Author Ann Arbor Posts:2,703 Points:729,890 Joined:Mar 2011	Message Posted: Feb 23, 2012 12:00:28 AM Ignore kgbellman Report Abuse of course
kgbellman Champion Author Ann Arbor Posts:2,703 Points:729,890 Joined:Mar 2011	Message Posted: Feb 22, 2012 11:59:45 PM Ignore kgbellman Report Abuse of course
Cashless Champion Author Akron Posts:3,510 Points:733,105 Joined:Apr 2011	Message Posted: Feb 22, 2012 11:57:42 PM Ignore Cashless Report Abuse Yup!
nztyraider Champion Author Nevada Posts:2,273 Points:692,575 Joined:Apr 2009	Message Posted: Feb 22, 2012 11:57:04 PM Ignore nztyraider Report Abuse As I said before.
OKRifle Champion Author Oklahoma City Posts:10,397 Points:1,808,560 Joined:Oct 2007	Message Posted: Feb 22, 2012 11:57:02 PM Ignore OKRifle Report Abuse Do tell!
gumbyrex Champion Author Fresno Posts:3,291 Points:757,340 Joined:Mar 2011	Message Posted: Feb 22, 2012 11:56:47 PM Ignore gumbyrex Report Abuse It certainly would be a better world if the speculators would just go away.
CPGas1815 Champion Author Michigan Posts:6,027 Points:1,099,605 Joined:Apr 2008	Message Posted: Feb 22, 2012 11:54:10 PM Ignore CPGas1815 Report Abuse Wall Street speculators whether they are speculating on energy products or on the price of a widget manufactured in Asia are those solely responsible for getting us into the economic mess we are now painfully enduring. To be sure the pain at the pump is about to intensify to all time record highs! Yesterday it began here in home town in the U.P. of Michigan where prices at the pump increased 7 cents per gallon. It is going to be bad folks. It is REALLY GOING TO BE BAD!! Prepare yourselves. I hope we all survive.
bif65 Champion Author Virginia Posts:1,023 Points:195,230 Joined:Jan 2011	Message Posted: Feb 22, 2012 11:52:03 PM Ignore bif65 Report Abuse ok
bcok Champion Author Los Angeles Posts:2,116 Points:1,542,545 Joined:Oct 2005	Message Posted: Feb 22, 2012 11:51:34 PM Ignore bcok Report Abuse Ultimately, this is the big money mongrels helping the rest of them mongrels getting richer.
carman11 Champion Author North Carolina Posts:3,325 Points:689,775 Joined:Jun 2011	Message Posted: Feb 22, 2012 11:46:32 PM Ignore carman11 Report Abuse Higher gas price were design to make you drive the type of cars they want you to drive. Then they will have to raise gas taxes because we are not buying gas and the road taxes are not enough to build and repair the roads.
jayrad1957 Champion Author Los Angeles Posts:19,636 Points:1,595,540 Joined:Nov 2008	Message Posted: Feb 22, 2012 11:46:09 PM Ignore jayrad1957 Report Abuse "We need a President, like Mitt Romney" That was a good one.
Tanner_1 Champion Author Virginia Beach Posts:1,536 Points:456,790 Joined:Nov 2011	Message Posted: Feb 22, 2012 11:45:43 PM Ignore Tanner_1 Report Abuse Well you have to blame somebody!
Saturn93 Champion Author Salt Lake City Posts:7,292 Points:1,640,885 Joined:Oct 2006	Message Posted: Feb 22, 2012 11:42:36 PM Ignore Saturn93 Report Abuse Easy to point fingers at the speculators. We need a President, like Mitt Romney" who really understands the economics of the oil industry and how to effectively deal with it. I saw him effectively change a losing Olympics organization, mired in controversy and bad press, into the most successful Winter Olympics ever held. Instead of the projected loss of millions of dollars, the games have left a legacy which is still benefiting Utah and the US, ten years later.
02SilverStroke Champion Author Dallas Posts:2,013 Points:1,342,920 Joined:Aug 2005	Message Posted: Feb 22, 2012 11:41:45 PM Ignore 02SilverStroke Report Abuse Not just big government but I'm sure that Obama himself is telling people to do what they can to get gas to $5.00 a gallon. Of course if that happens, he's sure to lose in November.
DEG Champion Author Las Vegas Posts:17,615 Points:3,493,730 Joined:Jul 2003	Message Posted: Feb 22, 2012 11:40:11 PM Ignore DEG Report Abuse Big Government has a large hand in this run up.
johnnyg1200 Champion Author St. Louis Posts:4,142 Points:643,390 Joined:May 2011	Message Posted: Feb 22, 2012 11:38:35 PM Ignore johnnyg1200 Report Abuse Who does this surprise?
judgemobile Champion Author Ohio Posts:7,560 Points:2,443,185 Joined:Nov 2005	Message Posted: Feb 22, 2012 11:38:25 PM Ignore judgemobile Report Abuse let's speulate on the price of oil if Iran gets a nuclear bomb and delivery capacity.
skybiker Champion Author South Carolina Posts:7,287 Points:1,558,440 Joined:Jul 2008	Message Posted: Feb 22, 2012 11:37:11 PM Ignore skybiker Report Abuse God save us from these Bean Counters!!!!...
abcdMA Champion Author Worcester Posts:7,917 Points:1,574,005 Joined:Nov 2008	Message Posted: Feb 22, 2012 11:36:27 PM Ignore abcdMA Report Abuse bad for economy, even worse for a president without substance
shopnshop Champion Author Dallas Posts:1,125 Points:329,080 Joined:Aug 2008	Message Posted: Feb 22, 2012 11:34:54 PM Ignore shopnshop Report Abuse bad for the economy
Jedidiah Champion Author Maine Posts:107,707 Points:2,666,750 Joined:Dec 2005	Message Posted: Feb 22, 2012 11:34:05 PM Ignore Jedidiah Report Abuse RE: Pointerpuppy "If they keep speculating that gas will go up, it might as well go up, so they are right." Sounds like Conservatism jargon for let the money flow to money because we deem it proper. Let me rethink your sentence. It seems then that speculators have the power to control gas prices by willing it to be thusly. That reasoning is behind the crux of the problem of not regulating that gas prices be fixed to reflect current costs of purchasing and delivery vs the real problem of speculative future costs based on buying low now and selling at a higher cost later. You cannot expect our economy to thrive by underwriting such voodoo economics. Thus, I rethought your idea and reply: "If they keep speculating that gas will go up, it needn't go up until it cost the holders of the gasoline glut (which is already to sell at a lower price) more money to replace, so they are wrong in harming our nations working class while they fatten their own future bankrolls."
jayrad1957 Champion Author Los Angeles Posts:19,636 Points:1,595,540 Joined:Nov 2008	Message Posted: Feb 22, 2012 11:33:30 PM Ignore jayrad1957 Report Abuse danol, how does the government make 15% tax on each gallon? The Federal tax is about 18.9 cents/gallon regardless of price. Can't wait to hear the explanation on that statement.
clermont40miles Champion Author Cincinnati Posts:10,562 Points:1,770,920 Joined:Apr 2008	Message Posted: Feb 22, 2012 11:32:39 PM Ignore clermont40miles Report Abuse Sunshine. Let the light shine on these rats. Speculator scum.
gasgo123 Veteran Author South Carolina Posts:278 Points:1,768,920 Joined:May 2005	Message Posted: Feb 22, 2012 11:30:51 PM Ignore gasgo123 Report Abuse Price should be based on cost at time of delivery, not speculation.
jayrad1957 Champion Author Los Angeles Posts:19,636 Points:1,595,540 Joined:Nov 2008	Message Posted: Feb 22, 2012 11:30:47 PM Ignore jayrad1957 Report Abuse The way pump prices are going up leads me to believe the station owners are now taking advantage of the situation. Up 20/30 cents a day? Sometimes twice a day? You can now add station owners with the speculators as part of the cause of the run up in prices.
skyking19 Champion Author Little Rock Posts:1,996 Points:1,697,840 Joined:Jan 2007	Message Posted: Feb 22, 2012 11:30:29 PM Ignore skyking19 Report Abuse That's what commodity trading is all about.
danol43 Champion Author Modesto Posts:1,697 Points:587,430 Joined:May 2011	Message Posted: Feb 22, 2012 11:28:33 PM Ignore danol43 Report Abuse Oil companies make a 4% profit/gallon and the government makes a 15% profit (tax) gallon. Who is the culprit?
luwachris Champion Author Los Angeles Posts:1,082 Points:224,370 Joined:Jul 2011	Message Posted: Feb 22, 2012 11:22:15 PM Ignore luwachris Report Abuse NOT BUYING IT!!!!!!
ramman2012 Champion Author Edmonton Posts:2,318 Points:495,460 Joined:May 2011	Message Posted: Feb 22, 2012 11:17:02 PM Ignore ramman2012 Report Abuse By the way Blue48,conserving is not the problem,it's your government!
ramman2012 Champion Author Edmonton Posts:2,318 Points:495,460 Joined:May 2011	Message Posted: Feb 22, 2012 11:14:47 PM Ignore ramman2012 Report Abuse If Obama and congress don't fix this speculator problem America will pull itself and the rest of the world deeper into recession.
Blue48 Champion Author Illinois Posts:7,300 Points:1,636,970 Joined:Feb 2007	Message Posted: Feb 22, 2012 11:12:00 PM Ignore Blue48 Report Abuse CONSERVE AMERICA CONSERVE!
pointerpuppy All-Star Author Idaho Posts:657 Points:140,665 Joined:Jan 2012	Message Posted: Feb 22, 2012 11:11:14 PM Ignore pointerpuppy Report Abuse So if they keep speculating that gas will go up, it might as well go up so they are right.
serrog Champion Author Nova Scotia Posts:5,554 Points:1,510,180 Joined:Oct 2008	Message Posted: Feb 22, 2012 11:11:12 PM Ignore serrog Report Abuse greed
bnosyt Rookie Author Missouri Posts:8 Points:208,885 Joined:Aug 2003	Message Posted: Feb 22, 2012 11:11:01 PM Ignore bnosyt Report Abuse ty58 and oaktowner...for every $ of oil/gas that is exported, that dollar enters our economy from a foreign economy and creates jobs/products/services.
DerHahn Champion Author Illinois Posts:13,698 Points:2,112,185 Joined:May 2004	Message Posted: Feb 22, 2012 11:02:25 PM Ignore DerHahn Report Abuse "``(11) ELIGIBLE COMMERCIAL ENTITY. The term `eligible commercial entity' means, with respect to an agreement, contract or transaction in a commodity ``(A) an eligible contract participant described in clause (i), (ii), (v), (vii), (viii), or (ix) of paragraph (12)(A) that, in connection with its business ``(i) has a demonstrable ability, directly or through separate contractual arrangements, to make or take delivery of the underlying commodity;" the above regulations need to be changed so that they MUST take delivery. maybe then we could get rid of the speculators and how they are going to ruin everything.
ScottE Champion Author Orange County Posts:4,352 Points:2,197,155 Joined:May 2002	Message Posted: Feb 22, 2012 11:01:44 PM Ignore ScottE Report Abuse This article will really make you Hate Big oil and Speculators. Especially the last 4 or so paragraphs. DETESTABLE. wE DO ARE PART AND GET SCREWED BY BIG OIL WITH SPECULATORS TOTALLY IN BED WITH THEM. big YEECH!!!WE ARE GETTING SCREWED BLUE AND TATTOO.
ty58 Veteran Author Akron Posts:320 Points:483,030 Joined:Jun 2011	Message Posted: Feb 22, 2012 11:01:25 PM Ignore ty58 Report Abuse if we are doing so much exporting why is congress making such a big deal about us not letting the canada pipe line in do we really need it
oaktowner Champion Author San Francisco Posts:15,244 Points:2,909,935 Joined:Apr 2005	Message Posted: Feb 22, 2012 10:59:17 PM Ignore oaktowner Report Abuse since the u.s. exports gas now, there is no need for the keystone pipeline. u.s doesn't need the gas. the pipeline is only to export canadian oil...