Oil prices driven by speculation?

[TEG]

Reason Magazine - Oil Prices and Economic Reality

The Reason for High Oil Prices

The Real Reason Behind Record High Oil Prices- Part 2 :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website

Are Pension Funds Fueling High Oil?

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Other reasons pondered:

The Big Picture | The Costanza Energy Policy: 25 Ways to Drive Oil to $150

 

[vfx]

These are all opinion. No facts.

Waste of time.

 

[DDB]

The only thing that I can think to do is promote EVs and buy one as soon as I can. That's my solution... as small a contribution it may be.

 

[TEG]

3x in 6 years...

Senate takes on commodities speculators - May. 20, 2008

http://www.niemanwatchdog.org/index.cfm?fuseaction=background.view&backgroundid=00100

AFP: Oil speculators 'riding roughshod' over OPEC, say analysts

Oil speculators push price to £5 gallon - Times Online

Oil Speculators « ShoreIndie

The Republican-American AMIR TAHERI: Oil speculators latter-day pirates

Stop the Oil Speculators - The Nader Page

Blaming speculators - May 25 | EnergyBulletin.net | Peak Oil News Clearinghouse

Germany in call for ban on oil speculation - Telegraph

Oil insiders say investors driving up prices by banking on fear of low supply | Dallas Morning News | News for Dallas, Texas | Dallas Business News

Facts On Fuel

 

[vfx]

Pshaw .

 

[TEG]

Big fund money and its effect on oil markets - May. 16, 2008
Why $120 oil is good, and speculators don't matter - May. 8, 2008

Senate Committee on Homeland Security and Governmental Affairs
Senate Committee on Homeland Security and Governmental Affairs
Senate Committee on Homeland Security and Governmental Affairs

Oil producers urged to boost output as prices soar
"Oil producers urged to boost output as prices soar
Joseph Coleman / Associated Press
AOMORI, Japan -- Leading energy-consuming nations urged oil producers Saturday to boost their output to counter soaring prices threatening the world economy, while they pledged to develop clean energy technologies and improve efficiency. The five nations -- the United States, China, Japan, India and South Korea -- differed, however, on how urgently oil subsidies should be phased out, with Washington backing bold movement while India and China warned of political and economic instability.
Cabinet ministers from the five countries, which account for more than half the world's consumption of energy, agreed that the sharp surge in oil prices was a menace to the world economy, and that more petroleum should be produced to meet rising demand..."
"...Analysts also have cited the decline of the U.S. dollar, fears about the long-term supply of oil and aggressive speculation as factors in rising prices..."

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Interesting forces at work here. High oil prices benefit the oil companies, and environmentalists that want to see consumption reduced, but the rising cost of food and transportation is causing big problems for those with limited funds. Is the US trying to set an example by letting speculators drive our prices up? If we get OPEC to increase output will India and China just buy it up and sell it at subsidized prices to their ever more mobile populations? If the US was serious about using high prices to reduce consumption they wouldn't be lobbying OPEC to pump out more oil.

 

[TEG]

 

[vfx]

Inverse in action:
http://pollkatz.homestead.com/files/gasindex-long_files/zzzBUSHINDEX_24497_image001.gif

 

[Albern]

3x in 6 years...

Hey TEG,

I think this figure paints an even bigger picture. I looked on gasbuddy.com and I couldn't find out what their methodology was in coming up with those numbers. Specifically I wanted to know if they had adjusted for inflation for a given base year. Any way you slice it the results in general are still the same...

 

[TEG]

[FONT=Arial,Helvetica,sans-serif]www.StopOilSpeculationNow.com.

[/FONT]

 

[Kevin Harney]

TEG,

What I find interesting about your post is that even though EU prices are double what the US is it seems that they are only so because of TAXES.

 

[Cobos]

TEG,

What I find interesting about your post is that even though EU prices are double what the US is it seems that they are only so because of TAXES.

Kevin: That is pretty obvious since oil price is one of those products where the market is generally well-known and price is a driving factor. So in a "perfect" world market that means gasoline is the same price everywhere. That also means any difference in price comes from local subsidies or taxes/fees. The base price for a barrel is the same give or take a few cents.

The interesting thing comparing US to Norwegian prices is that our higher taxes means most people that care about gasprices has pretty efficient cars already and due to the high taxes the percentage increase in price pales in comparison to the US. The last 4 years the price has gone from around 11NOK/L to 12, down to 11 again and now at around 13,5NOK/L. So in this period the increase has only been about 20% compared to the US increase of about 300%.

Personally I don't really care, I use the public transportation for my daily commute and only the car as a luxury to save a bit of time, usually in weekends. So I don't mind if it goes up to 20NOK/L, or about 15$/g. I can see how that might be a problem for others, but in a purely egoistic view that will also increase my property value, since I live IN the city.

Cobos

 

[TEG]

Personally I don't really care, I use the public transportation for my daily commute... So I don't mind if it goes up... I can see how that might be a problem for others, ...

But fuel prices indirectly drive up the price of so many other things including food that needs to be delivered from great distances.

 

[doug]

But fuel prices indirectly drive up the price of so many other things including food that needs to be delivered from great distances.

Yeah, I was gonna say that I don't drive enough to really notice. A couple months can pass before I put gas in my little roadster. But I definitely notice that I'm paying more for groceries.

 

[Cobos]

Yeah, I was gonna say that I don't drive enough to really notice. A couple months can pass before I put gas in my little roadster. But I definitely notice that I'm paying more for groceries.

I do notice that food prices are increasing, but considering many of our biggest billionaires in Norway got that way based on owning national grocery chains I doubt it's much to do with fuel prices. Remember what I said above about fuel prices in Norway only increasing about 20% the last 4-5 years.

And personally our household income is increasing about 50% during this time so we don't mind increased food prices that much. Of course that's my personal issue and not a great help to all the poor people in the world spending about 80% of their total income on food. For them the price of rice increasing 10% is a major issue. So there are two sides to this story. As a Norwegian we'd also like the oil to hit around $200 as we are running a huge surplus on oil exports obviously.


The enviromentalist in me likes the changes to both food production and goods production that these changes in oil price is leading to. Norwegian fish f. inst. is harvested on Norwegian costs, fileted in China! and then sent back as frozen food to us. If that isn't wasteful of resources I do not know. The only problem with forcing through this kind of change is it's usually the poor that pay the biggest price not me.

Cobos

 

[SByer]

Part of the problem is that in the U.S., taxes on gas weren't indexed to it's price or inflation, so over time, the taxes have lost value and are not sufficient to take care of the infrastructure they're supposed to take care of. You also had a long term shift away from railways towards trucking in the US because of subsidized, overly cheap fuel, which is part of the current exposure of food prices to the rise in oil prices.

On the other hand, the punitive level of taxes in some countries seem counterproductive, given how it does affect food prices. The best answer probably lies somewhere in the middle.

 

[Brent]

Norway is actually an interesting country to look at from a resource perspective. As I understand it, for most of its history, it was poor, dominated by its neighbors, and made do by what it could extract from sea. (My grandfather left "Kristiania" -- Oslo's name before 1925 -- in 1912 to seek his fortune in the States.) It has only been in the last thirty years or so, after the discovery of oil, that it has become one of the richest nations per-capita. The last I heard, Norway's budget surplus per resident was almost the exact inverse of the U.S. deficit per resident.

Despite this wealth, the country seems to continue its thrift. In the Oslo ski museum, there is (or was, when I visited) a photo of the king, in the 1970s, taking public transportation during the oil embargo. It may have only been a publicity stunt, but I can't imagine our President taking the bus to demonstrate how to lower transportation costs. Oslo was one of the first cities to have a system of rental bicycles: for about $10 annually, you have access to a pool of bicycles located throughout the city, which you can ride to your destination, and then return it to the pool. This system was implemented in Paris a couple of years ago.

In Los Angeles, by contrast, the lack of real alternatives is probably my biggest problem with high fuel prices. In many big cities, you have a great subway system, backed up by a decent bus system, backed up by a relatively compact layout amenable to bicycling. Commuters in Los Angeles have a limited subway, an extensive but sclerotic bus system, and huge distances between destinations. So we drive, aside from the poorest of us. I've been fortunate to have the power to choose where I live and work, so I walk, but most people go where the job takes them, and pray for lower gas prices.

That said, I went out and bought a bicycle last week. I expect to use it for trips here and there under five miles. It's the least I can do!

 

[Cobos]

Norway is actually an interesting country to look at from a resource perspective. As I understand it, for most of its history, it was poor, dominated by its neighbors, and made do by what it could extract from sea. (My grandfather left "Kristiania" -- Oslo's name before 1925 -- in 1912 to seek his fortune in the States.) It has only been in the last thirty years or so, after the discovery of oil, that it has become one of the richest nations per-capita. The last I heard, Norway's budget surplus per resident was almost the exact inverse of the U.S. deficit per resident.

Despite this wealth, the country seems to continue its thrift. In the Oslo ski museum, there is (or was, when I visited) a photo of the king, in the 1970s, taking public transportation during the oil embargo. It may have only been a publicity stunt, but I can't imagine our President taking the bus to demonstrate how to lower transportation costs. Oslo was one of the first cities to have a system of rental bicycles: for about $10 annually, you have access to a pool of bicycles located throughout the city, which you can ride to your destination, and then return it to the pool. This system was implemented in Paris a couple of years ago.

Snip LA information

Just to quickly comment, all you mentioned is true. The king did take the subway out to one of the forest/recreational areas on edge of town. Our surplus on the budget is plowed into Norways retirement fund which at 1.1.2008 was at about $400 billion, but with $147 barrel oil is increasing rapidly. So as I've mentioned a few times no doubt that Norway is a good place to live.

Cobos

 

[vfx]

seems like it would be cold

 

[Cobos]

Depends on what you compare it to of course. In Oslo it's rarely colder than -5C during winter and usually in the +15-25C during summer... pretty pleasant in my opinion. Of course the Golf stream does help a lot for this.

Cobos