Crush Liberalism

Liberalism: Why think when you can “feel”?

Oil speculators are at it again

I’m sure that you have all noticed the cost of gas going up about a quarter in the last couple of weeks.  Ever since gas climbed over $4 last year, I’ve been following “petropolitics” to keep my fingers on the pulse of the state of gasoline and oil products in the world.  I knew that speculators were to blame for last year’s detached-from-reality spike in prices, and I know that they’re going back to the buffet for seconds right now.

For a primer on my take, refer to last year’s post called “Is this REALLY capitalism?”  You’ll get the full version on how speculators artificially inflate prices that have no basis in supply-and-demand economics, all while contributing jack squat to the oil-to-consumer process.  Here’s what is going on today:

…But Jim Smith, president and CEO of the Florida Petroleum Marketers and Convenience Store Association Inc., said a global drop in demand has created a glut of crude and refined oil product reserves, precluding normal price increases from the explanation.

“Oil speculators have entered back into the market,” he said. “It’s the only excuse.”

Smith said customers have contacted him expressing worry or anger about the increases, but calls from concerned member retailers have outnumbered them.

“They’re upset,” he said. “It has a signification impact on their business operations.”

That’s because most retailers price close to the wholesale prices on gasoline, depending on profits from other items they sell in convenience stores, to stay competitive, he said. 

“We’re price takers, not price makers. We have to buy from oil companies,” he said.

But Smith said he doesn’t blame the oil companies for the increase. He thinks the rise in crude oil prices — from $49.92 a barrel April 28 to $58.50 Monday — signals that speculators are affecting pricing.

“There is not a single, solitary reason to justify increases in crude oil prices,” he said.

The average price for a gallon of regular unleaded gas in Jacksonville hadn’t gone above $2.11 a gallon since late last year, according to jacksonvillegasprices .com.

Smith said he’s concerned that the price of gas can go even higher — despite high supply, low demand and an economic recession — because of a loophole Congress left open.

Sen. Bill Nelson, D-Fla., hopes to close that loophole, which would allow certain energy and metal futures traders to manipulate prices via the Internet, through a bill he introduced in January, Nelson spokesman Dan McLaughlin said.

Nelson and Sen. Maria Cantwell, D-Wash, as well as J. Stephen Simon, executive vice president of Exxon-Mobil, have said speculators were largely, if not entirely, responsible for gasoline’s spike above $4 a gallon last summer.

Right now, unemployment is sky high.  The Dow is in the tank.  Our oil storage facilities are busting at the seams with supply.  Demand is lower than it has been in nearly a generation.  People are pinching their pennies.  Therefore, there is absolutely no single reason whatsoever for oil prices to be rising!

This isn’t capitalism, my friends.  It’s not Big Oil, nor the treehuggers or the global warming nuts, nor China and India (two countries that speculators and their apologists tried to blame last year) causing this irrational jump in prices.  This is extortion by investment firms that are starving for profit, even ill-gotten ones.  As much as I hate to say it, I fully support Sens. Nelson and Cantwell in their efforts to rein in the big money speculators who are trying once again to drive oil prices sky high while they line their pockets with money that was earned on deception.

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May 12, 2009 - Posted by | capitalism, oil

5 Comments »

  1. Crush,
    another off topic, but this iphone/bberry app is an awesome way to get/keep informed on what our elected officials are doing…
    iphone app here
    blackberry app here
    dj

    Comment by dj | May 13, 2009

  2. I just finished reading an article on Yahoo about this same topic and what I am discovering is it’s not “just” any one person or persons, it’s OPEC, the speculators, greed, the Republicans AND Democrats alike (just to name a few) and yes even the great Obama, the supposed “savior of the free world and the common people” are responsible for the BIG HIKE in gas prices. First we can blame OPEC for trying to keep the oil rich countries at a “higher than most” way of living. I wonder what they are going to do if the world really does find a way to stop depending on their oil and start depending on their/our own oil. As far as Greed is concerned, well that can apply to ALL involved in this make the rich richer and to hell with the rest of the people of this GOD given planet idea. Aren’t we all glad GOD didn’t/doesn’t charge us to use HIS resources? Next, as a democrat, I as well as 99% of all other democrats blamed the republicans as we saw G.W., Cheney and the rest of the oil industry in the White House, BUT now that the democrats are in control what has changed, not a whole heck of a lot in the way of gasoline prices. Yes they bottomed out and crashed during the Bush administration from over $4.00 a gallon to under $2.00 a gallon, but we are now seeing this drastic rise in prices “AGAIN” under the Obama administration and NOTHING is being said or done about it by the President or the US Congress of these GREAT United States of America. So I have to ask the question, is the greed for money in oil just a Republican thing or does it live in the Democrats as well (just better conceled)? It’s my opinion that it’s time for the common people of this country to stand up and SHOUT at Washington D.C. and tell them….”IF you do NOT want to end up as the republicans did in this last election they better start standing up for the common people of THIS country, and stop tearing the American people and it’s workers down, because there are a lot more of us than there are of the wealthier people and we will not only vote their asses out of the White House and US Congress but we’ll find people that are actually interested in what happens to us.
    The Congress and now 2 Presidents have set back and given HUNDREDS of BILLIONS of OUR dollars to the very people that have caused this global crisis and they are giving that money away to “foreign” countries but have turned their noses up and turned their backs on the American worker. When GM, Chrysler and the UAW went to Washington DC and asked for money to help keep them afloat during this financial downturn in our country’s history they got treated like the proverbial “redheaded step-child”. They were kicked, punched, slapped in the face then dragged over hot coals trying to get the help they needed to keep good paying jobs here in the USA, but alas a few of the so-called…GOD Loving, Flag waving, apple pie eating, Mom Loving members of the US Congress decided that the Japanese way of life is better than the American way of life, and are now trying to force us to live the Japanese way of life. Why aren’t the “fat cats” in the US Federal Government taking any drastic, major pay cuts or losing their health care the way they are forcing me, a retiree from GM, to take. It’s very easy for the likes of a Senator from Ky, Tenn or Alabama to talk about letting the US Auto companies “fail” all the time still getting their full compensation of money and benefits. I would bet the rest of the money I will make in this life time that those people in Washington DC that are saying the just let the US Auto industry fail can afford to loose thier wages and benefits a lot more than I can, and if they did take those cuts they can all say they did it for the good of the United States of America economy not for the good of the Japanese economy or any other world economy other than the U.S.’s.

    Well that’s it, the thoughts and feelings from a guy that did what he was supposed to do and worked 30yrs for GM and “earned” my retirement.

    Watching and listening for what this way comes
    Patrick E.

    Comment by Patrick E. | May 29, 2009

  3. Just because you do not understand capitalism and speculation does not mean it does not work. Governments always interfere with the markets to society’s detriment.

    Comment by Doug Roberts | October 18, 2009

  4. Doug,

    You do not have to convince me that government interference in capitalism is bad. But what you people do is NOT capitalism. Capitalism is based largely on supply and demand, and I demonstrated in this post that right now, you people are driving up oil prices in a manner that is totally detached from supply and demand principles. You buy paper, not oil. And we’re seeing it again right now.

    By the way, the government prohibits Ponzi schemes and other financial fraud. What you people do is no different.

    Comment by crushliberalism | October 18, 2009

  5. This article came up as an auto-link to one I just published. It might be enlightening for you and the readers of your blog to revisit this subject seeing that – at least in Michigan – gas prices have crested over $3.00 per gallon, and oil is not breaking the infamous $90.00 a barrel price that drove half of the news outlets into a a fit of screaming hysterics.

    My post can be found here:

    http://unknownconservative.wordpress.com/2010/12/28/high-oil-prices-weak-dollar-blame-obama/#more-952

    Comment by unknownconservative | December 28, 2010


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