It won’t be long until that old canard, supply and demand, will be back to justify the run-up in oil prices.
When it returns, remember this story today from Bloomberg.
While I have little doubt that oil supplies are dwindling, we’re not down to the last drop from the spigot, as some of the people profiting handsomely from the oil futures market would like you to think.
15 Comments
Bill – while the short-term gyrations are clearly speculative the long-term trend is strongly upward – and this IS supply/demand. Consider that we call $50 oil cheap. Would we have called that cheap a decade ago – even with inflation adjustments?
The fact is that we have either reached, passed, or are approaching ‘peak oil’ and demand will further out-strip supply unless we do something about our addiction (Bush’s term)
Long-term, I agree.
Short-term, the current bump is speculator-driven.
As was the last run-up to $147, another example of the joy of the unregulated “free market,” the latter two words Latin for “grab your wallet.”
Agreed … GREED …
Remember when the Hunt brothers tried to corner the silver market?
All the more reason to reduce our addiction.
Who is to say what an actual price of oil should be. Shouldn’t it be determined by the Market Place? Well, I guess “Free Market” is a bad word now. So let’s just have the government set the price of oil and that will make everybody happy.
:rolleyes:
Define greed?
Problem is Joe – cartels and other concentrated interests can unduly influence the price. Whenev you have monopoly or oligopoly control in a market you have such problems. There is no true free market in oil.
Oil is still a commodity in great demand, regardless of the cartels that control most of the supply. Sure, when you have Leftist Governments and Dictatorial regimes that belong in the cartel, there is some price manipulation. But that is like saying that illegal narcotics prices are unduly influenced because they are controlled by Drug Cartels and Leftist Governments, but the demand is still the main reason for the price.
See, Mr. Wilson’s thinks there isn’t a supply and demand side of the oil price increases, so he posts a story about a rouge futures trader.
Then Bloomberg as a story (the same day) about Gasoline Demand reached an 18 month high. http://bloomberg.com/apps/news?pid=20601072&sid=awafUrOBalCc
So is it supply and demand? That what drives a lot of futures traders into the business.
Well, I had a response, but it was deleted. Oh well.
I guess I cannot post web links, but it was Bloomberg article that had a report that gasoline demand was at an 18 month high.
Scratch my last post.
hmmm. That’s happened before. My previous post won’t show up until I make another post.
It’s all good.
Actually, demand is one relatively minor factor in speculator activity, and you conveniently omit any mention of supply, which many analysts say remains high. The strength of the dollar has a lot to do with speculator activity.
I don’t question the fact that oil supplies are dwindling and that America needs to wean itself from over-reliance on oil; however, it seems pretty obvious that the haste with which it is dwindling has been exaggerated in the name of personal profit.
In this fragile economy, that, in my opinion, should be stopped – and quickly – by the federal government.
Right, first political maneuvering, then speculator activity to mess with the market. Oil hasn’t been a free market since Nixon was president…
Bill – and just how does the Federal Government take over the international oil markets? I thought I was supposed to be the Socialist around here!
Well Good Luck for the Federal Government to do anything.
Ben, you’re not alone. Plenty of socialist in the USA for you. You should know that. The Wichita Eagle is not immune of them either. You’re in good company.
Problem is Joe!, I’m a capitalist. I do, however, have issues with monopolies and oligopolies.
I must admit that I find a tremendous amoput of irony in this entire energy/oil/price situation. Having worked in the energy industry in the past I remember meny warnings that we were taking short-term profits and ignoring long-term realities. Sure enough, we were right. And now America finds itself driving Hummers and short on fuel. No credible coal liquification processes, no clean coal technologies, no energy efficiencies, etc etc etc.
And, to make manners worse, many of us have abandoned the industry. So, someone will have to reinvent the nascent technologies we had been working on and will have to find and train people to work on them. I would suggest that someone needs to get to work assembling a team of scientists and engineers to pick up where we left off so many years ago.
Protecting the under-informed or less-empowered purchaser should not be considered socialist. Capitalism should not be cheating for all you can get.