Speculation and Gas Prices

[Indy Coug]

http://www.cnn.com/2012/02/28/opinio...html?hpt=hp_c1

[Omaha 680]

The title and author was enough to tell me the article would be full of crap, but I read it anyway. The nicest thing I can say about it is it certainly is an opinion piece.

[il Padrino Ute]

The title and author was enough to tell me the article would be full of crap, but I read it anyway. The nicest thing I can say about it is it certainly is an opinion piece.

Don't be that nice. It's unadulterated bullshit.

[Jacob]

I didn't bother reading the whole thing. It's hard to take a socialist seriously. And I don't believe that it is oil speculators raking in profits on mere trades that has the prices where they are. But what about the law of supply and demand? Based on the cost to extract oil from the ground and refine it, $4.00/gal is not justified. Isn't it true that speculation is at least partly to blame? Speculation of unease in the middle east? Speculation that supplies might be cut off? How else to explain the price per gallon doubling without a decrease in supply or an increase in demand?

[Color Me Badd Fan]

I didn't bother reading the whole thing. It's hard to take a socialist seriously. And I don't believe that it is oil speculators raking in profits on mere trades that has the prices where they are. But what about the law of supply and demand? Based on the cost to extract oil from the ground and refine it, $4.00/gal is not justified. Isn't it true that speculation is at least partly to blame? Speculation of unease in the middle east? Speculation that supplies might be cut off? How else to explain the price per gallon doubling without a decrease in supply or an increase in demand?

Speculation absolutely plays a big role. It's just funny that people in the media are just figuring this out now, they sure didn't understand it when Bush was President. Back then it was a few people behind the curtain pulling the levers.

People have been speculating for years that there was going to be a supply crunch but it's never really happened. Fact is, we can draw oil out of shale and the Alberta tar sands for much less than the current price per barrel and there's decades of supply just from those sources alone.

But the other factor at play I think is that investors are looking for a place to put their money and the devaluation of the currency and the low yields on treasuries make commodities look very attractive.

Another thing to consider is the Democratic mantra that "we can't drill our way out of this." The main underpinning of this is that it takes years for new supply to come online. Well, I wonder where we would be now had supply been developed starting in 06 or 07 when prices really started spiking up. I guess we would be drilling our way out the problem right now. From a historical perspective, it's absolutely nuts that we send all this money out to countries like Saudi Arabia, Venezuela and Nigeria instead of just developing our own supply and greater enabling our access to Canada's supply.

[Goatnapper'96]

Speculation absolutely plays a big role. It's just funny that people in the media are just figuring this out now, they sure didn't understand it when Bush was President. Back then it was a few people behind the curtain pulling the levers.

People have been speculating for years that there was going to be a supply crunch but it's never really happened. Fact is, we can draw oil out of shale and the Alberta tar sands for much less than the current price per barrel and there's decades of supply just from those sources alone.

But the other factor at play I think is that investors are looking for a place to put their money and the devaluation of the currency and the low yields on treasuries make commodities look very attractive.

Another thing to consider is the Democratic mantra that "we can't drill our way out of this." The main underpinning of this is that it takes years for new supply to come online. Well, I wonder where we would be now had supply been developed starting in 06 or 07 when prices really started spiking up. I guess we would be drilling our way out the problem right now. From a historical perspective, it's absolutely nuts that we send all this money out to countries like Saudi Arabia, Venezuela and Nigeria instead of just developing our own supply and greater enabling our access to Canada's supply.

It is inevitable that domestic supply will be tapped. President Obama has power but he cannot stop the invisible hand that has been erected!

[Blueintheface]

It is inevitable that domestic supply will be tapped. President Obama has power but he cannot stop the invisible hand that has been erected!

Move this post to the foyer, buddy!

[RobinFinderson]

I don't understand the rush to tap our reserves, and for what... cheap gasoline? Our gas continues to be an incredible bargain by the standards of most of the 1st world. However, as valuable as our oil reserves are today, their value will increase exponentially as oil becomes a scarce commodity. The rulers of the future are going to be the countries that STILL have oil reserves long after everyone else has tapped them out. Yet the GOP wants to RACE to tap every possible supply we have. This is simple short-sightedness, for what... the possibility of $2.50/gallon gasoline?

We need to strike a balance between developing current reserves and the PRESERVATION of reserves as a critical asset for the future geopolitical situation. Anyone who says otherwise is a fool.

[Blueintheface]

I don't understand the rush to tap our reserves, and for what... cheap gasoline? Our gas continues to be an incredible bargain by the standards of most of the 1st world. However, as valuable as our oil reserves are today, their value will increase exponentially as oil becomes a scarce commodity. The rulers of the future are going to be the countries that STILL have oil reserves long after everyone else has tapped them out. Yet the GOP wants to RACE to tap every possible supply we have. This is simple short-sightedness, for what... the possibility of $2.50/gallon gasoline?

We need to strike a balance between developing current reserves and the PRESERVATION of reserves as a critical asset for the future geopolitical situation. Anyone who says otherwise is a fool.

Job creation? I'm not trying to start anything just speculating...

[Omaha 680]

I don't understand the rush to tap our reserves, and for what... cheap gasoline? Our gas continues to be an incredible bargain by the standards of most of the 1st world. However, as valuable as our oil reserves are today, their value will increase exponentially as oil becomes a scarce commodity. The rulers of the future are going to be the countries that STILL have oil reserves long after everyone else has tapped them out. Yet the GOP wants to RACE to tap every possible supply we have. This is simple short-sightedness, for what... the possibility of $2.50/gallon gasoline?

We need to strike a balance between developing current reserves and the PRESERVATION of reserves as a critical asset for the future geopolitical situation. Anyone who says otherwise is a fool.

I typed out a response, but then reread your last sentence and realized you don't really want a discussion.

[Goatnapper'96]

I don't understand the rush to tap our reserves, and for what... cheap gasoline? Our gas continues to be an incredible bargain by the standards of most of the 1st world. However, as valuable as our oil reserves are today, their value will increase exponentially as oil becomes a scarce commodity. The rulers of the future are going to be the countries that STILL have oil reserves long after everyone else has tapped them out. Yet the GOP wants to RACE to tap every possible supply we have. This is simple short-sightedness, for what... the possibility of $2.50/gallon gasoline?

We need to strike a balance between developing current reserves and the PRESERVATION of reserves as a critical asset for the future geopolitical situation. Anyone who says otherwise is a fool.

It is a tough situation for lefties. 4-5 years ago all the talk was of the high price due to supply and demand rules buffeted with not giving money to "petroictators" or whatever the sexy lingo term of the left was. Now there is significantly, as in waaaaay significantly, more of domestic supply available hurting both arguments. My recommendation is to embrace it and at least get your blue collar union friends back in the fold. I got a BS degree in Poly Sci, I'd listen to me!