Skyhigh Oil Prices - To Blame for Gas Pump Price Woes?
Posted 6/9/2008 @ 3:00:26 pm by mywetplanet.com
A recent CNN Money article spoke to some of the reasons behind the $50 per barrel jump in oil since August of 2007. Some economists argue that big money commodity speculators have shifted their business from farm commodities and have moved into future speculating on oil prices.
Recently oil has been trading for nearly $130 per barrel of crude. Are commodity speculators to blame for artificially high oil prices? Or, as some economists argue, has commodity speculation in the oil markets led to more stabilization of costs? To understand this debate, a person should believe in the economic concept of supply and demand.
In the short term, there is very little evidence of a shortage of crude oil supplies. There is also increasing evidence that demand for gasoline and other transportation forms of energy is slowing. This should result in stabilizing the price of crude oil. We know that is not the case. Why?
Are oil companies and their influence on the markets artificially driving up the cost of oil for profit? That remains to be seen. Oil corporations are reaping in record profits over the last 3 fiscal quarters. What part in this equation do the markets themselves play?
Futures investing has long been a fundamental stabilizer in farm commodities. Farmers base their profits in the fall of each year on futures trading six months prior to harvesting and selling farm commodities.
Now, big money investors are placing their clients stocks in the futures market with regard to oil. These investors are savy, but they are not experienced in this aspect of futures speculation. As money is poured into the oil futures market, it is based on speculation that oil prices will rise and clients will profit accordingly. Does this artificially drive the price of crude oil higher in order to realize profit for investors?
The jury is out. Some economists argue that futures commodity speculation does not belong in the oil markets. Others, the federal government included, say that big money invested in these oil futures actually soften steep prices and results in lower inflated costs for oil.
My wet planet is running out of oil! We are beginning to see this in Saudi Arabia, where prime supplies in large oil fields are producing increasingly less crude oil. As supplies begin to run out, prices of crude oil are most certainly going to continue to rise even higher in decades to come.
No where in these equations are efforts to help middle and lower class citizens with the tremendous costs for energy! We are angry and the simple fact is that government officials are not paying attention to our cries for moderation of energy costs!
We must hold our elected officials responsible for their actions with regard to moderating the energy costs. In November, we MUST know the voting records of the officials that we elect. Voting them OUT, because they decide NOT TO LISTEN to MY WET PLANET'S people, who voted them in to represent us. Officials who resist our cries to lower the costs of energy MUST BE VOTED OUT OF OFFICE!! NOVEMBER IS THE TIME TO DECIDE!!
|
|