Three cheers for higher oil prices!

Oil prices are not swayed by the small oil futures traders. But they are swayed by the major Wall St players. And they make a hugh amount of money doing so. And so, by the way, do the major oil companies.

The CFTC (Commodity Future Trading Commission) cannot regulate (monitor) this type of trading, since it was stripped of its powers to do so through lobbying by the oil companies in 2000. In May of 2008, Congress introduced a bill called the Consumer-First Energy Act that would have restored the CFTC oversite powers.

This bill died in the Senate this year. I wonder why this happened? I would “speculate” and state that the Senators who voted no on this bill, regardless of pretense, are in somebody’s pocket.

Come on, people, this country is not run by the goverment. It is run by the major corporations across all industry sectors.

Many people have known this for quite some time( past 70 years )

It is just more apparent now because greed got the better of them and technology became more sophisticated.

The price increases we see in oil because of speculation could happen with any commodity. There just happens to be more money to be made in this type.

We need price controls on the major commodities that keep this country moving and allow its citizens to survive

You’re a MORON!

Seems like the oil companies didn’t learn thier lesson the first time, with stock piles of oil at an all time high, it must be a struggle to squeeze the last few cents out of consumers pockets, especially in this economy, or depression as it sure is not your regular resseion. If they are now spending money on the loosing oil stocks, let them loose some more. Time for the government to put price controls on them dogs too!

One more little tidbit: the way that you know it’s manipulation of prices and speculation is when there is no shortage of supply … and the prices still go up ! This is exactly what we had for the last 5 years, and we still have it now.

Did anyone have trouble buying gasoline or diesel ? Nope: speculators.

We need Congress to investigate and punish them.

You seem to have forgotten about Peak Oil, which is sad because that is the most important factor.

Yes oil prices collapsed when the economy did, because global demand for oil completely crashed. Therefore, supply and demand functions forced the price of oil threw the floor. But at 50.00/bbl there are many oil operations that are losing money, and there is virtually no incentive to drill new wells. The EIA had a report last week showing that the number of new oil wells being drilled had dropped by 56% since November, and that number is still trending down.

Due to the incontravertable fact that the world has a limited supply of oil and is running out (Peak Oil), the current wells that are pumping are gradually going dry. It works out to roughly 3 million bbls/day reduction in supply every year through drying up wells… So if the world doesn’t continue to drill enough to get another 3 million bbls/day each year then global supply drops.

I just told you the number of new wells had been cut in half since November.

When the economy recovers (certainly by mid 2010), the demand for oil will recover as well, but there won’t be sufficient global supply to meet that demand anymore.

By Dec 2010, $150/bbl oil will seem like a holiday.

We need real solutions for energy that don’t dry up.

http://www.WindFuels.com

Wow, alot of emotion in these postings, I wish there was more analytical thought. Wether it’s OPEC manipulating prices, speculators or increased demand, the price of oil WILL go up. How are we going to address this? Do we only react when gas reaches $4 a gallon? Oil is our nations “crack”, unless we reduce our dependancy we’ll always have to pay the dealers prices and this will take decades of dedicated rehab to accomplish.

I’m with Bryan from Columbus & Henry from Astoria: Let the prices rise, & hopefully that will steer us towards petro conservation & alternative fuels.

I don’t like to see the economy falter. As a compassionate Christian, though, I am also concerned about the islands & other low-lying areas disappearing underwater due to global warming & rising sea levels; air pollution; & desertification.

My personal answer to higher oil prices: ride a bicycle almost everywhere, & eat mainly plants, which are healthier anyway. Americans are too caught up with eating meat, which to grow is highly energy intensive & highly polluting (methane into the air, bacteria into the groundwater).

The American consumer is the engine that drives the WORLD economy. When we stop spending the entire world shudders.If big oil believes that the American consumer will once again pay $3-$4 a gallon for gasoline and there will be no economic repercussions, lets let them find out. How many more ice skating rinks and ski slopes in the desserts of the Middle East must we be asked to pay for. Speak with your wallet and the answer will be zero.

I already thought years ago that prices were going to be heading up. Last year did not surprise me much at all. This is a great opportunity for us to innovate and look at alternatives. We will get the most fuel efficient car we can find for our next car. This will accomplish several things including making the middle east a little less wealthy.

Three cheers?…rising demand?…you must be getting money from the oil companies. Its speculation again, I should say already, since there is not a single good reason for prices to have spiked 70%. Rising oil prices are like increasing taxes during a recession…..sucks the wind out of a recovery.

Three cheers? Are you one of the speculators who make a profit off the backs of people who actually use the commodity?

this oil rising price $60.00 a barrell is stupid, the recovery in three months is bull . and all this is well stuff we turned the corner is nonsense. all this price fixing and collusine between oil companies and price fixing at the pumps .the banks and stock markets and oil will all bottom out and tank. watch ,wait ,and see .citi group gave 400 million to name mets field citi field and they need more government money to stay a float. while the ceo says, the 400 million is not bailout money .where did it the 400 million come from ?? 60 days ago citi bank was broke and dead . now this !! we u.s. tax payers are to bail you out again. we want our 400 million back . and you and all the managers are fired, get your things and hit the door, all of you . we own 80 % of citi group bank us tax payers
they need to be fired now.. they will try to say every thing is OK ,OK, OK!! BUT WATCH IT TANK and you will wake up and the stock market will bottom out, and no jobs .and oil will 50 cents a barrel and no takers these lies ,to pump up these markets needs to stop there are tankers off the coast anchored there just waiting for oil the price to go up .every available tank and vessel is full of oil there is so much of it .you will see . theres no demand no shortage and nobottom yet we will see

High oil prices helped to contribute to the global recession by drawing away money that would have been spent on consumer goods. Upward trends on a weakened economy will only cause the recession to drag out.

@Jess, West Palm Beach, FL: May 12, 2009 3:53 pm. The NYSE doesn’t trade in oil. You’re thinking of the Merc (NY or Chicago)

I’m surprised that Peak Oil hasn’t been mentioned so I just have to say it. The supply of the stuff is faltering.

I would actually like to see the prices increase beyond the $4.xx per gallon rate. Perhaps $10/gallon would generate enough public outcry to get alternatives flowing and maybe, just maybe, would make some of us give up these silly urban assault vehicles we love so much.

“Three Cheers”? Tell that to the folks that are out jobs, losing their homes and need tranportation to find new jobs!

Not worried at all. I drive a Prius not a gas-hog SUV !!!

Let the price go over $100 a barrel! Then maybe America will wake up get off the addiction and move to alternative fuels!

The guy that wrote this reminds me that you don’t have to know a darn thing about economics and markets to put something in print. First, the rise in oil prices has been manipulated more by OPEC reducing supply to scalp us again than it has been by rising demand. Plus, I am certain the speculators are at their old tricks again bolstering prices too. But, beyond that, and even if I am totally wrong, there is another MAJOR reason why oil prices rising is NEVER, EVER a positive thing for the economy. And that is because it affects the price of every product and service that is available. The brilliant economists continue to say that the mortgage and housing fiasco and bubble were the prime cause of all the economic woes lately. However, that was only a portion of the cause of this correction. Yes, in my opinion this is a major CORRECTION. Their was far too much speculation on everything by people wanting to make too much money too quickly. Real estate, stocks, oil, and commodities were all driven to unsustainable prices and the bottom fell out. Fortunately, nobody is required to buy stocks or real estate when the prices are too high. But oil and commodities are another story. Oil and the other energies becoming overpriced again will again hit the prices of every product with another double whammy. Therefore, oil prices being artificially increased by speculation and OPEC, right in the middle of a much-needed recovery period, is nothing but 100% bad news. All it will do is prolong any recovery that may be trying to naturally occur. If OPEC wasn’t so greedy now, they would understand that if they kept supply constant, and let global economy naturally grow, they would be rewarded with a more steady rise in price and demand that would result in a better long term sustainable source of revenue. This is my opinion and I’m sticking to it.

I wish the government would put the brakes on the big oil, opec and the speculaters. They alone are responsible for the economy being the way it is now. The auto manufactures went along with them for years and made the cars use more & more gas, now people do not want there junky gas guzzlers.

I realized that I forgot to answer the main question you posed, Paul, in my last post. If the editors will indulge me, I’ll answer your question here.

No, I’m not overly worried about oil prices. I took steps during the last oil crunch to minimize my exposure to swings in transportation fuel costs. Oil prices can only increase to the point that they catalyze another economic collapse, as they did last year, which will decrease prices again. If the speculators want that to happen again, more power to them. Perhaps if this cycle is repeated enough, the energy importers of the world will see to it that alternative methods of transportation are deployed to make oil prices largely irrelevant for transportation.

Since you enjoy high oil prices so much, how about you pay for my gas for the next year?

Transportation fuels demand (which makes up, IIRC, ~70% of crude demand) is around 1995 levels. The world hasn’t had stocks of crude oil this high since 1990. This in spite of nearly four million barrels of capacity being removed from the market.

Allow me to clarify: demand is poor. Demand is in poorer shape than we’ve seen in decades. This is a case for $25-30 oil, not $60 oil. You can cite all the green shoots, political posturing, and financial “industry” hype you want, but we’re still in a deep recession.

A demand-driven futures rally would go something like this:

“U.S. oil inventories were drawn down by five million barrels this week, as opposed to analysts’ predictions of a half million barrel gain in stocks. Gasoline inventories were down by three million barrels as opposed to calls for a one hundred thousand barrel increase. Distillate stocks fell two million barrels, as opposed to predictions for a two hundred thousand barrel draw. As a result, June light, sweet crude futures are trading up $5/barrel.”

That would be a demand-based rally. However, there’s nothing even resembling such bullish data out there today. That leads me to believe that this is a speculative rally based on what might happen (the definition of speculation…), not a demand rally based on what is happening now (or the trend the hard data points to).

OK here in the usa our mass transit sucks! so that means most people have to drive to make money, move goods cut lumber ect thus the price of every thing gos up not just oil/gas! so the we will revert to our downward spiral because consumers will not be able to spend. most people will only have the money for rent food insuance child care gas after that poof the consumer is broke.

Am I the only one that remembers when gas was the same all month long? Recently we had a .40 hike in one day here, ever seen it drop by .30+ in a day? I have not! It’s called GREED nothing else!

You know, what makes me mad is that its the day traders that are raising the prices up while we have plenty of oil, especially since no one has any money to afford to fill up there car with no jobs! Its just amazing. Oil will get to $4.00 a gallon I am sure, sometime during the summer. The only ones who benefit are the ones that trade commodities on the NYSE! While we, the American public, take on the additional financial burden. Don’t worry, I got a fuel efficient new Yaris and I will drive less for sure!

Oil is what started this mess in the first place as far as I can see. It was either get gas to go to work or pay some bills. With gas prices going back up watch for the economy to contract some as consumers get used to the new prices. Later if prices remain stable the economy will expand slower then expected.

Wow. i can not believe the stupidity in this article. Higher oil means better economic times ahead? That is too funny.

Oil went from $90 to $147 last year. That didn’t equate into a better economy. In fact, oil did this despite lower demand during a recession. Let’s face it, oil prices are driven by the speculators who profit at the expense of the American consumer.

The demand is at a 10 year low and supply is at a 19 year high. There are oil tankers being rented so the speculators can profit by taking oil now and selling it in the future. And, a lot of these speculators storing oil on the open seas, are the same ones that received TARP. I’d say if Citi, Goldman, etc…was doing this, the government should demand TARP money repaid now.

To Gordon – you are right, there isn’t any competition in the oil business. The reason for that is because it doesn’t matter if you buy your oil from Saudi Arabia, Venezuela, Russia, or the United States – it is all interchangeable. Same with gas – ExxonMobil=BP=Conovco-Phillips, etc.

It’s the reason why nobody can “boycott ExxonMobil” for a day and do anything about the price of gas – perfect substitutability prevents competition every time.

Yes, I’m very concerned. There is much research that $115 and $167 per barrel oil causes tremendous damage to developed and developing economies, respectively (Liz Ann Sonders, Schwab). And, now we have proof: it happened last year.

Rising oil prices are already adversely affecting business and consumer spending. I’m doing everything possible to avoid driving and flying. Others are doing the same.

This is 10% supply (OPEC) and 90% speculators (Goldman) working together to drive prices back up. Pelosi broke their backs in July when she threatened a Congressional investigation, and she’ll have to do it again. We know who’s doing it, so we need to see some people arrested and punished severely as a lesson to the rest.

Couldn’t someone with some knowledge of the subject try to resolve the question of why gas went to $4 per gallon? A lot of people say speculation, but a lot of people voted for Obama, so what do they know.

I wish we could drill, explore, develope oil, gas, coal, shale, nucular (yes that is how it’s spelled). We just do not have an alternative except high prices based on current technology.

I get nauseous everytime I drive by a gas station. I definitely remember driving by the station and gas being $4/gal. All I could think was “They’re robbing us!” Now, everytime prices inch up, I began thinking of the worst…it’s all going to get worse…probably $5/gal soon.

People are worried about the SUPPLY of oil. If the global economy picks up, and oil demand shoots up, the price will go back over $100 per barrel, and the speculators will push it even higher. We need to sharply REDUCE our consumption of the stuff.

Supply and Demand……..right??? Refineries cut production because demand is down, storage of crude is at a 20yr. high because refineries have cut production, and Opec cuts output because there’s no place to put it…Hum??? Suppy & Demand..what a load of bull. Prices are going up because they can, there is no competition in the oil business.

Nothing but speculation. This is less about recovery and more about manipulation. When you can count on Oil prices being artificially higher because of “perceived” demand in the summer months, that’s one thing. But the reality behind it is that oil companies are frightfully reducing production, gas companies are frightfully reducing refinery production all at a time when the consumer is least likely to afford it. I’d say that’s price gouging. God forbid we even think about a hurricane in the Gulf of Mexico, because ExxonMobil will blink and shut down everything, just to prop up prices!

The price of oil that you hear quoted is not actually the price you would pay for a barrel of oil if you were able to buy one at WalMart. The quoted price is the price for specified in a futures contract, which is not equal to the spot price.

Gasoline is priced based upon how much the refiner paid for the oil that just showed up. When the future price of oil is increasing the price of gas is also going to increase as oil prices trend up but when the future price of a barrel of oil starts to go down, the price of the barrel that showed up yesterday didn’t necessarily follow suit yet.

The problem with oil and gas prices in recent years is that they have been converted to pricing models of charging what the traffic will bear. Is that any different than price gouging?? There is no relationship between cost of production/delivery and sales price. In my opinion, that means they are speculatively priced. This has the potential for dissasterous affects on purchasers and the economy in general since the limited number of suppliers means they operate like a monopoly. Does anyone remember Enron?? Until there is transparency between costs of production and delivery and prices, oil and gas prices will remain an underlying threat to economic recovery.

The artifical adverse aggregate demand shock created by institutional investors who hold almost 80% of all US dollars is “creating” the demand. It violates the fundamental aspects of Economics, but cannot be sustained in the long run. Oil will spike again due to the inflationary pressures that will take over as a result of the Obama administration’s plan to increase the money supply more than 60% over the next 10 years. But, it will come crashing down when the economy remains stagnant, the Fed is forced to raise rates to attract new investors who have poured back into the equities markets and the dollar plummets regardless because there are too many in circulation. Thanks Barack!

Phil in Philly is right on. What world do you live in when you think that higher oil prices (meaning higher prices at the pump)don’t hurt the average hard working person? You claim a sign the economy is in better shape is higher oil prices. A sign of a better economy for all is when WAGES increase along with prices. And I don’t know of too many companies giving out increases thesedays. The only people that make more money in this case are the oil companies, their investors, and the speculators for driving the prices up. If I had a spare dollar I would give it to you people who write such nonsense to buy yourself a clue!

Rising oil is what got the party started. That shock to the system was just one of the factors in causing the economy to come to a screeching halt in the last part of 2008, followed up closely by Hank Paulson’s egotistical “step aside” and let Lehman fail so it’d eliminate one of the competition for his pals at Goldman.

Just about the time it looks like things might get rolling again, in the economy, that is, I’m sure somebody at Goldman will start the hype machine and cause it to start rising. Where are those heroes that made the $150/barrel call for the Goldman trading desk? I’m sure they’re about to elbow Roubini out of the way for the TV face time and free pub.

I think my concern is that there isn’t really any transparency in how the price of gas is arrived at. All I know is that when the price of oil goes up “X” percent for the day I can go to bed feeling pretty confident that the price of gas will go up a comparable percentage the next day. However, when the price of oil goes down it doesn’t seem that the price of gas follows at a similar rate. Also, from an financial standpoint, it doesn’t make sense that the price of gas would rise and fall at the same rate as oil rises and falls. Oil, while a major component of the price of gas, is not the only one. There are many other fixed costs that the price of oil would have bi effect on,

As anyone that has taken economics 101 can tell you, there are two things that determine the price of a good – supply and demand.

Demand always increases this time of year as we enter peak travel season in the US – gas always gets more expensive during spring, usually peaking between Memorial Day and July 4th. That is nothing out of the ordinary.

What has changed significantly over the last year, however, is the amount of supply OPEC is allowing out into the world. As tight as supply was last summer, there is something like 3 million fewer barrels per day being produced by OPEC countries now. A significant reduction in supply that is not coupled with a significant increase in price clearly shows there must be a significant decrease in quantity demanded.

As far as speculation is concerned, that argument has always been a load of BS. Speculators don’t actually buy oil, they buy the right to buy oil which they offset by selling it later on. The only way that they could materially affect the price of a barrel of oil by speculation would be buying the oil, storing it somewhere, and hoarding it to drive up the price by reducing the available supply. As far as I know, nobody at Goldman Sachs is hoarding a petroleum reserve to influence the oil markets.

What morons people are. In January, right before the innauguration, we were paying $1.52 per gallon. Now we’re paying $2.30 – an increase of 78 cents in 3 months. Your a fool if you think this increase isn’t hurting people. There is no increased demand and there is a surplus of inventories. Those of you who defend supply vs. demand can’t be that stupid to realize the increases aren’t based on supply/demand. Its just pure greed by speculators that don’t care anything about economies or people as long as they make their buck. Ameica is doomed since we haven’t learned from the past.

What bothers me about this isn’t the rise in oil prices. It is the fact that the gas prices are higher than when oil was $75 dollars, not exact just hear me out. The oil reserves were growing and refineries halted production to keep the gas prices the same and even push them up. So now we will have this industry monopolized price that will begin to move with the price of oil the way that the market would normally dictate.

“Green shoots, Green shoots everywhere, buy, buy, buy!! Gas going up doesn’t bother me, I’ve lost my vehicle to the repo man, got no job, why bother looking for another with 13 million others doing the same, I’ll just sit back and let Team Obama take care of me with extended unemployment, free health care, food stamps, and a mortgage I can afford with my unemployment. Hope springs eternal with the Obama Dream Team!!!!

Sorry Paul, read everything you had to say but common sense still stands. We have the most oil in inventory in 20 years. Unemployment at 9% (11.2% in California where I live). People ditching their gas guzzlers and driving less to conserve. The SUV is a dead dinosaur that ain’t coming back. We are consuming less consumer goods made from petroleum (plastic and polyester) and we are also importing less consumer products from China (the freeways between LA ports and Riverside – where many DCs are – have freed up like you wouldn’t believe – all those container trucks have disappeared).

Bottom line, oil is overpriced and the speculators are in denial and thinking good days will be back again.

However, the definition of a good economy has changed. A real recovery means stabilization and very steady growth for the next 15-30 years.

I didn’t listen to the so-called experts before and I won’t start now. Common sense still prevails.

Oilprices rising are the worst thing for US economy.They are hitting $ and so sthe whole econmy.Only a new strong crackdown of stock echanges can freeze the situation for some months.Anyway in the medium-long term inflaction linked to oil costs will be the main US econmy killer.

it does concern. there is a fear of gas going over $4. I need to keep spending low, to the minimum, and save more. just in case. may be I would need to buy a higher mileage car or a hybrid.

This is pure specualtion. There are no green shoots of recovery. Our gdp went down 6.1 pecent this quarter? Green shoots of recovery, I think not. Green shoots of BS, I think so. And if there really are green shoots, by the way, it would be because of what Bush did, not obumbles moves now. In reality, there are no green shoots. The rise in oil prices bythe way, is primairy due to Goldman Sachs buying oil contracts. So the rise on oil is artificial, and those green shoots, we’re gonna see them wither and die duringthis quarter, even worse.