Sunday, April 24, 2011

Those Nefarious and Evil Oil Speculators

As President Obama launches faux investigations of oil price-fixing (helpful tip for Democrats: pricing is dictated by a phenomenon called 'supply-and-demand', an economic principle that has guided pricing since the dawn of human trading activity), his Chavez-like rhetoric has targeted greedy "speculators".

It turns out that in this matter, like so many others, the President must ignore facts, logic and reason. Because national oil companies control nearly 95% of all petroleum reserves.

It is easy to show that Obama's attack on the oil companies is baseless. To begin with, what do "subsidies" have to do with high gas prices? I assume that by "subsidies" Obama means that there is still some oil company income that the government doesn't tax. But the effect of a tax break is to lower prices, not raise them. On the other hand, the government does raise the price of gasoline, very significantly, by levying massive taxes on gasoline at both the federal and state levels. In fact, the government profits much more from the money you pay at the pump than any American oil company does...

Many people do not realize that the American oil companies are relatively minor producers on the international scene. Because of our restrictive drilling policies, they do not have access to substantial quantities of oil in the ground. They are major refiners, but relatively small producers of crude oil. The largest American oil company, Exxon-Mobil, barely registers in terms of control over supplies of crude oil...

...It is too bad that demagoguery isn't a useful product. If it were, the Obama administration could add materially to our GDP.

That's a hell of a good point.

The kind of horses*** this administration manufactures would prove exceedingly useful in promoting organic gardening, like FLOTUS' "health eatin' garden" at the White House.


pushback_317 said...

Is it your opinion that speculation does not have an impact on the cost of crude - pain at the pump? I can not imagine that is the position of anyone in 2012? What might be up for debate is how much does the actions impact the barrel price? Is it 10, 20, 30 or possibly 40?

directorblue said...

@Pushback -- futures traders are necessary parts of any market. If you depend on oil (like an airline), you need to hedge based upon the direction you think prices will go. That is, if you want to keep airline tickets stable.

Countries that try to eliminate futures speculation end up like Zimbabwe.

It's called supply-and-demand.

You can read about it in Macroeconomics 101.

Try checking it out sometime.

pushback_317 said...

So you do believe that speculation is responsible for increases in the price of crude oil which transitions into gas prices in the USA. Which answers my question:

"Is it your opinion that speculation does not have an impact on the cost of crude - pain at the pump?"

However, this increase does not account for the overwhelming majority of current gas prices and it is a market necessity.

Gotcha - thanks for the prompt reply.

QueMan said...

Go figure pushback...the head of know the Saudi's...stated they are going to cut back on production...too much supply/oil in the system.

Me I know it is bo's policies that have increase the prices...after all he did WARN us that is what he will do as potus...and you know what you moronic creep...your hope and change ain't done yet!!!

QueMan said...

...oh yeah pushback...Gotcha...but please don't bother to grovel to make your supreme one look good.

pushback_317 said...
This comment has been removed by the author.
pushback_317 said...

I do not understand the assumptive nature and defensive or 'offended' posture(s) to my question. However, my expectation is not to have everyone relate to me in a friendly manner all the time. With that in mind, I will duck & dodge. Thanks for the replies.

Honestly I do not get it though? I am afraid to bring this up as now it is realistic to expect further hazing. But, here goes:
Read what you said.... It has nothing to do with either of my posts. More importantly it was not relevant to my question. Some sort of ad hominem based attack/reply because of a question about an article I read on this blog?

If the expectation of writing a blog is not to have interaction with others or address their questions I am not sure what it is or ought to be.

pushback_317 said...

FYi - fuck Obama. He is more a worthless piece of shit than Bush. Do not get me wrong.. Not a lot worse. But, by no stretch is he any better. The people I know or associate with all seem to agree as well. Both republicans & democrats bend us over and fuck us in the ass every chance they get for the last 40-60 years it seems. They only seem to bring out the dog and pony shows 3-8 months before election or during main stream media BlitZ's

So, I am not really sure what your final comments meant.