Contrary to what Obama and many Democrats want you to believe, long oil speculation actually decreases gas prices and causes price stabilization. Anyone who has a basic understand of economics and how the futures market work should be able to come to this conclusion. When speculators bid up the future price of oil, it causes oil produces to increase production (note: this assumes bureaucrats sitting around a table in the Middle East aka OPEC aren't fixing the supply of oil for political reasons). This is basic economics, in a free market an increase in price leads to an increase in quantity supplied. When future oil prices are bid up, oil producers can produce oil that was not profitable to produce at lower prices. The oil producers will sell oil contracts at these higher prices to hedge or lock in these prices as they ramp of production. This is the purpose of the futures markets and how they work. The price of gas at the pump is ultimately determined by where the quantity supplied falls on the demand curve. With increased supplies, this point is at a lower price. Most everyone understand this. Oil speculators must sell every contract they buy before the delivery deadline. I do not think any of the politicians on tv complaining about oil speculation understand this. For long oil speculators to have an influence on gas at the pump, they would have to be taking delivery of oil (decreasing the supply oil at the pump). I do not think there are many oil speculators hoarding millions of barrels of oil in their backyards. The only price manipulator is the oil market is OPEC. If Obama and these congressmen are serious about lowering oil prices they should be trying to eliminate OPEC rather than the oil speculators. Listen to any of Donald Trump interviews about OPEC: http://www.youtube.com/watch?v=QLmKBOeYq-U http://www.youtube.com/watch?v=vtsbyoB8a_s
True or not, that argument is too complicated to make a difference at the polls. Try this. The reason you're paying so much at the pump is because we are slaves to OPEC. Why are we slaves to OPEC? Because your government refuses to use decades old technology converting vehicles to NG, that's why. Limited refining capacity due to silly, politically driven policies ain't helping either. Bottom line Mr. John Q. Public, it's your government sticking it up your ass at the pump, no one else, least not without the government facilitating it.
"your government refuses to use decades old technology converting vehicles to NG, " Agreed you are the man!!! NG is super cheap now all time low and can be made naturally by all waste plants that we have. You would reduce deficit here by large chunk. On top of that you would have zero unemployment building cars and infrastructure in the process. Long NG!!!! down Opec!!!
Aside from the usual seasonal factors that always drive up gas prices around this time of year (people drive more in the summer) a major reason that gas is high is because we have placed sanctions on one of the major suppliers, Iran, and are trying to prevent them from selling oil to anybody. Furthermore, everybody knows this is a prelude to a shooting war, and when that happens there may well be a complete disruption of oil supplies that ship through the Persian Gulf. Politicians cause prices to go up and then blame it on speculators. It works every time because the press and the people are stupid.
the original post doesn't take into account the problem with crude oil; we're awash in crude here in the US, what we're crunched on is refineries due to refineries closing everywhere due to lack of gasoline demand. that lack of demand for gasoline in the US, coupled with high global oil prices, make it unprofitable to run many refining operations, leading ultimately to the high gas prices we see at the pump.
Lack of gasoline demand in the US? Is this a joke? Americans have no lack of demand for gasoline. A lack of demand leads to lower prices, not higher prices. The reason no new refineries are made in the US is because of the strict environmental regulations in the industry.
Yeah, right? Every time I go out for a drive I see more Yukons and Tahoes and Expeditions and F350's driving faster than their brakes can stop them. There is NO shortage of demand for gasoline here in the US!! The shortage is in the common sense that is needed to control the amount of pressure that is applied to the gas pedal by the driver of the vehicle. And until gasoline hits ten or more dollars/gallon, that pressure will not be decreased. Americans are all about entitlement, and "noone is going to take away my God-given right to drive like a maniac", come Hell or higher gas prices. Gas is to oil like crack was to cocaine. A little gets you going, but more...just makes you want more.
Somewhere out there are probably newer figures, this is from '07 For 2007, the Top 10 exporters of finished gasoline to the U.S. in million barrels were: 1. United Kingdom 25.147 million barrels (total for the year) 2. U.S. Virgin Islands 23.590 3. France 11.209 4. Canada 10.605 5. Netherlands 10.518 6. Norway 8.406 7. Germany 8.351 8. Russia 7.387 9. Italy 7.239 10. OPEC Countries 5.516 Edit here's a link showing import of gasoline from other countries. http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epm0f_im0_mbbl_a.htm
=========== I like specs myself, I am a spec. But if your argument were true,long specs in oil or gas would never make money[profit] LOL EXXON chief put a price on the spec factor, probably right. Nor do unleaded gas prices fall generally as fast as they rise/retail. Nor do drillers/ refiners move with the same speed of specs. Mr matt,Good point about OPEC, the price fixer,LOL Good thing they cheat so much on over pumping quota, it lowers the price. CME chief probably had one of the better approaches. Instead iof trying to BS about specs not making a profit in oil/gas[and driving price up with thier profit]]WS noted CME in answer to Pres Barack rebuke on the oil/gas specs; he changed the subject slightly to ''DOW above 13,000, who do you think did that?? CME /Mr Duffy said US equity market is 100 % specs.Amen and Amen WSJ5-3, page C3 I did not vote for President Barack but he is right to rebuke long specs in gas/oil. Specs/sellers do another helpful service, they punish crooked /mediocre big banks with low share prices / bear trendsWhen you had a crook like LEHMAN leadership blaming short sellers, no wonder they went belly up bankrupt.