What's driving up oil prices again? Wall Street, of course

[laughingliberal]

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — Oil consumption has fallen, demand from U.S. motorists for gasoline is flat at best and refiners that turn crude into fuel are operating well below capacity. Yet oil prices keep marching toward $90 a barrel, pushing gasoline toward $3 a gallon in many markets, and prompting American drivers to ask, "What gives?"

Blame it on the same folks who brought you $140 oil and $4 gasoline in 2008: Wall Street speculators.

Experts attribute much of the recent rise in prices to flows of speculative money into oil markets. These bets are fueled by investor expectations that the U.S. and global economies are poised to return to growth and thus spark increased use of oil. Strong growth in China supports the narrative of rising oil consumption and tightening supplies.

"The thinking goes that rising stock (market) prices implies expanding business activity, implies growing energy demand, implies rising oil prices. I think you can make that case, but it's awfully weak," said Michael Fitzpatrick, vice president-energy for MF Global, a financial firm that brokers the sale of contracts for future delivery of oil. <snip>



Read more: http://www.mcclatchydc.com/2010/04/01/91487/whats-driving-up-oil-prices-again.html#ixzz0juZbRaNp

Can't we, at least, mention the term, "windfall profit tax?"

[Newsjock]

1. I dare anyone to make the case that this is good for the USA

Anyone? Even you lurking teabaggers?

OK then, if nobody thinks this is a good idea, why is it still allowed? Why don't our Democrats have the fortitude to do something about it?

[DJ13]

2. "Obama vows to crack down on oil speculation"! YES!

oh wait.......

"Sun Jun 22, 2008"

http://www.reuters.com/article/idUSN2243134220080622

sigh

[LiberalFighter]

3. They really need to lock up all of the speculators.

Tax them at 95%.

[FarCenter]

4. Since the speculators have to sooner or later close their positions, they can't inflate it forever

If you go long oil for a future date in order to make money from a rise in prices, the spot prices have to actually rise by that date, or you lose money on the contract. Most contracts are never actually delivered, but instead, the long and short contracts are canceled out before the delivery date.

Therefore, if the demand for oil from the rest of the world doesn't actually materialize, the speculators stand to lose money.

However, it is probably a good bet that continued high demand from China, India, and other developing countries will continue to sop up any additional production that can be brought on line.

The US has essentially no control over oil prices anymore. The spot price for Malaysian Tapis is a couple of dollars higher than that for West Texas Intermediate at Cushing, OK.

[laughingliberal]

5. I remember when Jim Jeffords switched parties and threw the majority in the Senate to the Democrats

We were seeing gas prices start spiraling up (although nothing like what we saw the summer of '08). Harry Reid stood up and the day after the Democrats regained the Senate and said he was opening a Senate investigation into the factors behind the rising gas prices. The prices at the pump started down the very next day. Why do we have no one who can stand up to these people and put a stop to this? Every tiny little sign of recovery in our economy sends oil prices up again to choke the infant recovery in its crib.