What is the solution, ban trading? Oil would have reached multiples higher if there was no trading of oil futures and only the hoarding of oil in tankers, open pits, empty milk jug containers, and bathtubs on the fear of running out of oil, and increasing value. Even ban the trading of futures, the hoarding of oil, and GS and others would find a different way to do what they have always done only more secretively. The more open and public the trading and information is, the better. So what about oil now? Still not cheap enough? Do we need a "free" fuel care program? Should only the government drill and distribute oil? That would be hilarious.
Your question is so warped, I'm not even going to begin wrestling that greasy pig. Suffice to say Masters (and I) mentioned pensions and long-term index investors (speculators) and you've summarily referred to their positions as 'manipulation.' I sold some ES contracts today ... guess that is manipulation too, right? And you mention the 'laws of supply & demand in a truly free market,' summarily excluding demand for investment purposes as a legitimate demand. I'm not going to help you masturbate pal.
lol On another note seems as some people have forgotten the huge spike in demand. China was faking it? Were they just kiddin? Just because we don't need 4x the oil, does not mean the world does not. Trading appears to be harder than reading headlines. Longs can get hurt. Even after the crash of oil, China continues to buy. They flat out need it. I have an idea, lets shut down the exchanges, let Saudies tell us how much its worth.
China was subsidizing gasoline and diesel so much during their growth boom in 2005 to 2007, that a gallon of diesel was costing 90 cents and a gallon of gasoline was about $1.40.
On the topic of GS buying and storing oil on tankers: Why shouldn't they be allowed to do this? If they are buying the oil, they should be able to do whatever they want with it. Put it on a spaceship and send it to the moon, who cares. They are gobbling up supply by doing this, so of course prices should rise. How is this different than anyone else who purchases oil and in turn consumes it? For all we know, GS is taking that oil supply and will sit on it for 5 years, effectively removing that oil from supply. Am I missing something here?
Why not just let a huge monopoly (in addition to OPEC, which can't operate in the U.S. by law) buy up all the oil distribution rights and oil supply sold into U.S. terminals, and then control the price of an essential resource, upon which the U.S. economy literally runs, and institute a pricing scheme that guarantees that oil will be priced at $500 per barrel, and gasoline and diesel at $15 to $20 per gallon? Why shouldn't they be allowed to do this? If they are buying the oil, they should be able to do whatever they want with it. Put it on a spaceship and send it to the moon, who cares. They are gobbling up supply by doing this, so of course prices should rise. How is this different than anyone else who purchases oil and in turn consumes it?
How is GS buying and storing oil on tankers related to "buying up all the oil distribution rights and oil supply sold into U.S. terminals"?
Before 1982 there was no oil futures, OTC or swaps. Oil industry was controlled back then by the Opec and the 7 US sisters, a True monopoly of the Black Gold. Yet, Oil price went straight to the $101 per barrel (inflation adjusted) in late 70's and the country got a severe disruption of destillates. When The US deregulate the Oil markets, The Crude Oil went straight down to the $9 dollar per barrel in the mid 90's. During the 00's Greenspan and the government intervention create a artificial worldwide free credit monster, That artificial prosperity and the manipulation of the US dollar helps to create the international conditions of more demand of energy. Because you need Crude Oil to Built everything in this world. You Need crude oil if you want to produce a Lipstick, Glass, Auto, Roads, To fly a plane, to build weapons, ethanol, You need oil for expor-imports cargoes etc etc etc. Once that credit bubble explodes, the crude oil went from 147 to 32 dollar per Barrel in less than 10 months. Yet, despite the $147 record in 2008, there was no supply disruption of Crude Destillates like in the 1970's. Just look at the Indian and Chines futures mistakes with overregulation of the futures markets. In today's china only 31 Chinese companies are allowed to trade in the international futures market and none of these are airlines, As a result, Chinese airlines can only conduct their fuel hedging through derivatives offered by some investment banks in the OTC markets. Chinese Airlines has been suffering more than their western counterparts. What wee need is more players in the field, less regulation, the elimination of most Oil ETFs, we need to ban the investment banks direct participation in this industry and we need more incentives to build new technologies. And washington should stop their irresponsible manipulation of the USD
Seems a lot easier to keep it in the ground. Oil is finite. The oil producers manage to keep shooting themselves in the foot, promising each other to cut production, then cheating on their quotas. If they cut another 25% of production, OPEC could rule the world and get $100-$150 a barrel. Chindia is sopping up the excess, and the world won't be economically depressed forever. As it is, one day, there is going to be a tremendous breakthrough in solar or another alternative that is going to make oil an also ran. Whatever it is, is going to be considerably cheaper than oil, and not have the carbon footprint. It is amazing already that there is not a huge market in CNG vehicles in the USA, seeing how we are floating in Natural Gas and it creates a lot less CO2. Only the Honda Civic fields a credible alternative CNG vehicle. It is also only a matter of time before they add massive amounts of new discoveries in addition to the recent ones.
Good Question, in countries like Dominican Republic and Honduras for example, most people use CNG vehicles.