Let’s Blame Speculators

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White House and congressional attacks on oil speculation do not alter the oil market’s fundamental demand-and-supply reality. What would lower the long-term price of oil is for Congress to permit exploration for the estimated billions upon billions of barrels of oil off our Atlantic and Pacific Ocean shores, the Gulf of Mexico and Alaska, not to mention the estimated billions, possibly trillions, of barrels of shale oil in Wyoming, Colorado, Utah and North Dakota.

Some politicians pooh-pooh calls for drilling, saying it would take five or 10 years to recover the oil and won’t solve today’s problems. Nonsense! I guarantee you that if permits were granted to all of our oil sources, we would see a reduction in today’s prices.

Why? Put yourself in the place of an OPEC member knowing there’s going to be a greater supply of U.S. oil in five or 10 years, which might drive oil prices to a permanent $20 or $30 per barrel. What will you want to do now while oil is $120 per barrel? You would want to sell.

OPEC’s collective efforts to sell more would put downward pressures on current oil prices. The White House, U.S. Congress and environmental wackos, by keeping our oil in the ground, are OPEC’s staunchest ally. I wouldn’t be surprised at all if we discovered OPEC reciprocity in the forms of political contributions to congressmen and charitable donations to environmental groups.

In the wake of higher gasoline prices, the only intelligent thing that Obama has called for is an end to $4 billion in annual taxpayer subsidies to oil companies. To get that done, he has an uphill bipartisan fight on his hands. Oil companies buy off both Republicans and Democrats in order to receive government handouts and special treatment.

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  • Mark

    Walter, I normally love your commentary, but how do you explain the runup in 2008? That was caused by speculation, as then and now there's a glut of oil in the market. Is it a case of the tail wagging the dog, or the dog wagging the tail? However, as the current administration ties up any exploration and drilling for oil in this country, the situation gets worse. Since Clinton's days, the threat is always to open up drilling in this country, but our culture of career politicians seems content to ride the current tension and fear, doing little to nothing at actually moving us into inexpensive and plentiful oil. As long as Wall Street runs the show, we're screwed. The parasites and their enablers are in charge, not the producers.

  • USMCSniper

    Obama is a redistribution ideologue and he like all like him, do not grasp the absolute economic law that only a free market production of goods and services allows for any distribution.