Obama’s Oil Ploy

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As gasoline prices have soared to $4 a gallon, putting a pinch on consumers’ wallets and President Obama’s approval ratings, the president has been casting about for a convenient scapegoat. He’s found one in oil market speculators, whom he charges with driving up the price of crude oil and gasoline.

In response to speculators’ supposedly sinister machinations, Obama this week urged Congress to crack down on speculation by stepping up surveillance of energy futures traders and increasing the penalties for those convicted of manipulating Congress. No doubt the move will convince Obama’s supporters that he is “doing something” to bring down gas prices. In truth, the crackdown on oil speculation, not unlike Obama’s recent campaign for a “Buffet rule” tax on millionaires, is little more than a cheap political ploy. Laws are already in place to regulate market manipulation, making Obama’s crackdown largely symbolic. The bigger problem, though, is that there is little connection between rising oil and gas prices and speculation in energy futures markets.

That’s not to say that oil speculation has no effect whatsoever on gasoline prices. But since those prices are ultimately determined by the laws of supply and demand, the only way that oil speculation can influence gas prices is by impacting the supply of oil and gasoline available. Thus, if oil producers expect prices to rise in the future, they may keep oil from the market in the hopes of selling it at a premium. That in turn could lead to diminished supply and increased prices at the pump.

Unfortunately for Obama’s anti-speculation crusade, there is no evidence that this scenario is actually happening. Cato Institute scholars Jerry Taylor and Peter Van Doren observe that if speculation were having the effect on gas prices that Obama claims, we would see a buildup of inventory among crude oil producers. Instead, crude inventories have remained within the normal range. Even more significant is that gasoline inventories, rather than increasing, have actually been decreasing at a faster-than-average rate. Consequently, Taylor and Van Doren note, “there’s no evidence that speculators are reducing the supply of crude or gasoline through increased storage.” To be sure, inventory rates might not be a meaningful indicator if producers were instead curbing production in anticipation of future price increases. Yet there is no evidence that this is happening, either.

As it happens, there are external factors limiting the supply of oil on the global market. But the true culprit is not oil speculation but geopolitics. Oil analysts point out that due to disruptions in production in strife-torn countries like South Sudan, Yemen and civil-war-engulfed Syria, at least a half a million barrels of oil a day are being withheld from the global market. A precipitous drop in crude oil production in Libya following a complete shutdown last year has cut the global supply by another 2 percent. Combine that with a fall in spare oil capacity and the result is a 20 percent increase in oil prices just since December. Prices may rise even more as a policy that President Obama (along with most Republicans) has supported – new sanctions on Iran intended to curb its nuclear weapons program – goes into effect.

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  • Ken

    The problem is not the oil speculators or speculation in itself. It is the vast printing of money that has deflated the value of the dollar, therefore making oil, along with EVERYTHING else more expensive!!

    • kongMing

      Exactly. Silver, wheat, industrial chemicals, minerals, and rent have all gone up due to fiat currency inflation to pay huge debts with weak dollars.

      Ironically the speculators will profit the most with more stringent margin requirements. Commodity consumers, like plastic and medicine manufacturers and gasoline refineries, will have all their capital sucked into these new Obama feel good slogan requirements. The privately financed brokers will be the ones left standing.

      To say investors who know what they are doing will buy millions of oil at $110/bbl and hold it in this insolvent economy is insane. If demand drops like it did in the summer of 2008 and if Europe blows up and the dollar gains you would see a huge drop in oil.

      What’s worst than rising prices on commodities you are buying? Falling prices on oil you just bought.

      • Rifleman

        If demand for oil drops in the summer it usually means the economy is tanking.

    • Rifleman

      How much have they printed since '09? I quit keeping track early, after three trillion. It's like reaching into your bank account or wallet and taking it.

      • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

        Since our dollar has some value left, they'll probably do another round as soon as they can distract us from what they're doing.

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    • Kal

      I buy local.

  • Amused

    Speculation is but one of the culprits , and what's the matter with having the money TO BACK UP YOUR BETS ?
    You wouldn't sit down at a poker table and place a bet you couldn't back up .

    • INTJ

      Why single out "oil speculators," though? Why hold them to a different standard than other market participants?

    • sandykramer

      You could sit down without money to back your bet, but out where I come from, you sure as hell better be packing lead.

  • Earl Richards

    Google the "$2.5 Trillion Oil Scam – slideshare." Purchase electric cars and solar panels. The price of oil and gasoline is determined by those who manipulate and control the crude oil futures markets and is not decided by Obama, OPEC and Saudi Aramco,Inc.

    • Asher

      Nobody wants a stupid inconvenient, small, little put put to drive. We want room and security in a vehicle for our kids…Get a life! This nation runs conveniently and economically on Oil if we could get rid of a regime that wants to cripple our nation and destroy the sovereignty of America!

  • Steve Chavez

    CARTOON OR PHOTO COMMERCIAL IDEA.

    TITLE: "OBAMA'S ONLY SHOVEL READY JOB."

    Draw a herd of BULLS with a huge pile of BULLSH!T which Obama is shoveling into a car's GAS TANK.

    The car is loaded with a family with suitcases on the roof. The car's license plate is "BRNNKNYA."

    The Gas Station where the car is at is called "Obama's Full'a Bull."

    CAPTION: "If only cars could run on GREEN BIO-BULLSH!T because that's something Obama has plenty of!"

    • Asher

      Bottom line is that we have all these gas, oil, shale oil, and coal resources. We are set to become an Independant America and get off foreign oil so we could quit funding Terrorist regimes..Obama will have none of that kind of thinking…He wants us to pay through the nose and help Arab Regimes!

  • StephenD

    I keep hearing how long a lead time to extract and process our own oil. So I ask, what are we waiting for?!? In five years, it will have been five years! We may as well start drilling NOW so in five years we have something to show for it. I just don't get it. With a straight face this Administration will look into the camera and tell you how drilling our own oil will not help prices today…. No Sh*t!! Doesn't mean it can't help TOMORROW!! So yeah, I'm "one of those" yelling DRILL-BABY-DRILL!

    • scum

      And all that oil would go right over to……China.

    • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

      If Clinton had approved the ANWAR drilling in his term we'd be using that oil right now.

      It's the most stupid argument I've heard, and when the media pretends it makes sense degrades them.

  • David Horowitz

    Get government out of Oil. Sure, there are a few speculators, but things are sure to get better.

    • Steve Chavez

      Are they planning on Nationalizing oil companies? Didn't Maxine Waters already propose that? Maybe that's their next plan and with people now angry at the prices, they'll probably agree with it while you, me, and millions of other American's will say "if this, what's next" but that won't matter since Obama's plan is to go after every oil company and impose moratoriums and regulations till their plan is enacted.

  • Schlomotion

    This is the lite-version of the "Obama is Blaming Israel for High Gas Prices" article. The author cleverly evades discussing the acknowledged 20% spike in gas prices from speculators trying to capitalize on Israel rattling its saber against Iran for nearly six months straight. The author very UNcleverly attributes the rise in prices to "supply and demand," a load of hooey that we just don't believe anymore, since the price gets jacked up before winter and before summer, before elections, and during planned attacks on foreign countries. Also the price never reduces substantially, and gas stations don't compete in price anymore. The supply and all distribution points and pricing are controlled. You can't have a free market if some oil cartel jackass is on the faucet flanging world supply and financial commodities cartels are flanging the market price. We used to blame that on Saddam, but it's Americans and Brits.

    I was amused that the author said "putting a pinch on consumers' wallets" and not "enacting a backdoor ban on domestic travel." Why not be accurate? If Eric Holder could be roped into this exposure of Obama's cheap political ploy, wouldn't this be a secret cabal trying to revoke the right to use cars? The author wants Obama out, wants to shield Israel from criticism, but does not want to actually address oil price manipulation. He weakly asserts that knocking over more backward Muslim countries would ease oil prices. That presumes that BP sells cheaper gas when it gets cheaper oil, passing on that benefit to taxpayers and governments that kill foreign leaders so they can operate more oil wells.

    Simply put, Hasbara is on the wrong side of high oil prices.

    • reader

      Really? So many words to articulate the predictable "supply and demand is a ploy invented by the Joos?" Yet, this troll says that the same Joos are UNclever. Go figure. I'm beginning to suspect that the troll is actually a mental patient afforded access to a computer in a clinic lobby.

      • Schlomotion

        "Supply and Demand" is in effect. Politicians and pundits "supply" the B.S. explanations, and oil companies "demand" more money, and Israel "demands" Iranian disarmament. Then the US and the UK "supply" some destroyers and countries in the Middle East whose countries then "demand" that they stop doing drive-bys. Then the US and UK "demand" that nobody do business with Iran, so it "supplies" Russia, China, and India instead. So Azerbaijan "supplies" Israel with airstrips, and Israel "demands" the US let them launch an attack. The US refuses to "supply" cover and then Israel "demands" retribution in the Hasbara press.

        • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

          You really are an academic, you don't understand the most basic of things.

    • Zionista

      still obsessed with us Jews huh troll?

      • Schlomotion

        Oh, don't go blaming your behavior on all Jews.

        • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

          Dont' go blaming Jews for your bad behavior.

          • Schlomotion

            You're right. I'm sorry I tried to start a war with Iran and gas prices went up. It's my fault.

        • Zionista

          I am a Jew you moron – one of the chosen you can't stop thinking about!!!!

    • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

      Supply and demand does what it does.

      And is Israel manipulating the output from their vast oil fields? How can you even pretend they're part of the problem?

      • Schlomotion

        Because of the standoff in the Strait of Hormuz. Israel "supplies" the international crisis, and oil speculators "demand" price spikes.

        • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

          Is Israel pumping oil there?

          • Schlomotion

            Irrelevant.

          • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

            Of course not. Supply and demand has two parts. Either they're effecting price by supply, or with demand. Which is it? Are they buying up oil stocks to fuel a growing economy like China?

          • Schlomotion

            I can't make you intelligent. I can only suggest readings. http://www.israelnationalnews.com/News/News.aspx/

          • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

            A story on how Iran is the problem.

            How does that blame Israel again?

          • Schlomotion

            As I said. I can't make you intelligent.

          • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

            Thankfully I didn't wait until we met.
            And how is Iran wanting to bomb everyone they don't like Israel's fault again?

          • Zionista

            you finally use the right word to describe yourself – an irrelevant troll who wishes his klansman could enjoy some of the prominence Jews enjoy

        • Western Canadian

          Hell, you can’t even make yourself intelligent.

    • EVABeliever

      schlo is a proven and known anti-Semite. Enough said!

  • http://www.newenglishreview.org John MJ

    Really! You have expensive gas! I live in the UK and I am currently paying $10.06 per gallon for my gas. Now, how much are you paying?

    • reader

      You're making the point. Socialists make everything more expensive.

      • http://www.newenglishreview.org John MJ

        Correct, but it isn't only the left at fault – it's also large government and the European Union's insistence on a so-called level playing field. This means that the UK, which is Europe's largest oil producer, cannot, by law, reap any benefit from that geological fact because that might be unfair to some other country that doesn't have oil. The upshot is that I am forced to pay the same price for gas as if I lived in a country that didn't have oil.

        Oh, and today when I filled my car I actually paid $10.40 per gallon – the price has gone up again!

        • Rifleman

          "…cannot, by law, reap any benefit from that geological fact because that might be unfair to some other country that doesn't have oil." – Read that again. That is basic leftist egalitarian thinking. Blaming all problems with anything on just a political ideology would be crazy, but I think some of what you consider separate from the left, isn't. Penalizing you because your taxes are 'too' low is another example that may be familiar.

          Like many American leftists, our so-called energy secretary Chu, has said Americans should be paying what people in the UK pays for gas. If the normal summer price spike goes on top of our current record prices it will kill our already anemic growth. I suspect Obama will do whatever he can to keep prices down 'til November, and he's shown he'll be much worse on energy if he's reelected.

    • Rifleman

      We're paying way too much, and the absurd amount you pay in the UK doesn't change that.

  • EVABeliever

    Michael Goodwin in the NY Post made a great point this morning: Troubled by the prostitution scandal in Brazil, Hillary's boozing it up down there, Rosen's stupid comment about Romney's wife and Axelrod's faux pax what does Nobama do? He calls a press conference and announces a trumped up plan to attack the evil oil speculators! He has ZERO energy policy but this press conference was strictly to distract from the stuff that is infecting our Government: his liberal, leftist and immoral boot lickers.

  • qsome

    since he is always looking for someone to blame and the boogeyman under the bed, how can you listen to anything he says is the problem??

  • Flowerknife_us

    Beating up the speculators for reacting to Obamas policys. Meanwhile, the middle class is slowly being bled dry of their remaining desposable income, Disposable income to this administration = additional tax revenue uncollected.
    Raising prices on taxable items raises tax revenue. By the time the health care bill arrives little will be left to pay it.

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Do you still sit at the door with the shakes waiting for the delivery guy from the liquor store?

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    -86?

  • JoJoJams

    You're one foul mouthed, childish p.o.s. And you've yet to post any kind of cogent argument. I pity you. Well, no, I mostly pity your parents. They certainly couldn't have actually meant to breed and raise someone as sick as you.

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Of course not. Once again the guy who called for jihad and killing an entire town of Christians without knowing the facts defends his call to execute all sex offenders, even minors that have had consensual sex with other minors.

    I stick up for justice, for the justice system and defend against vigilante justice.

    Why do you have a problem with that exactly? It just sounds so 'muslim friendly'.

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    This thread isn't about that topic, you just came here to derail it, didn't you?

    9 hours ago @ KATU – Portland, OR – Sex offender student a… · 4 replies · +5 points
    "Of course the victim needs focused on. There should never been a second one had our justice system worked right. He should have been executed after the first time"

    And he was a minor child at the time. Anything else? Now can we get back to the topic at hand?

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    You're already exposed yourself.
    Do you think you'll ever have credibility with this crowd again?

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Boy, you and bedtime for bozo and patriot here really put in a lot of time using parallel profiles to thumb me down.

    You're such brave and loyal jihadists.

  • WeeToddEdwards

    You're such a complete faliure. You honsetly believe that we all gang up pn you and thumb you down. That just proves even more that this is your life. You're pathetic and a faliure. Find a job yet? <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV dir=ltr> <DIV style=”BORDER-BOTTOM: #ccc 1px solid; BORDER-LEFT: #ccc 1px solid; PADDING-BOTTOM: 0px; LINE-HEIGHT: 0; MARGIN: 5px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; HEIGHT: 0px; FONT-SIZE: 0px; BORDER-TOP: #ccc 1px solid; BORDER-RIGHT: #ccc 1px solid; PADDING-TOP: 0px”></DIV>

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Oh wee wee, you small little tiny man you.

    For a failure why do the trolls target me then?
    And you can't even figure out how to comment from your smart phone with out all the stuff coming through.

    Can't you just stick to your work terminal at your government office job when you're trying to meet your quota for the day?

  • WeeToddEdwards

    Not using my phone m oron.
    What you fail to see is that you're the troll

    Find a job yet?

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Not this time, none of the fonts are there.

    See how that works?

  • WeeToddEdwards

    Really does not matter where I reply from. <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV dir=ltr> <DIV style=”BORDER-BOTTOM: #ccc 1px solid; BORDER-LEFT: #ccc 1px solid; PADDING-BOTTOM: 0px; LINE-HEIGHT: 0; MARGIN: 5px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; HEIGHT: 0px; FONT-SIZE: 0px; BORDER-TOP: #ccc 1px solid; BORDER-RIGHT: #ccc 1px solid; PADDING-TOP: 0px”></DIV>

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Back on the phone again, all those fonts. It's a clear indicator of your mental agility and the lack of it.

    Wee, when you post from work at your government work desk it's called paid propaganda. It matters.

  • WeeToddEdwards

    If I worked the goverenmet you comment would make sense. Don't know why the fonts appear when I reply from my e-mail inbox on my lap top. Why does it matter? I don't care and if it annoys you, that makes me happy so I will keep doing it <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV dir=ltr> <DIV style=”BORDER-BOTTOM: #ccc 1px solid; BORDER-LEFT: #ccc 1px solid; PADDING-BOTTOM: 0px; LINE-HEIGHT: 0; MARGIN: 5px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; HEIGHT: 0px; FONT-SIZE: 0px; BORDER-TOP: #ccc 1px solid; BORDER-RIGHT: #ccc 1px solid; PADDING-TOP: 0px”></DIV>

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Still the small, tiny, tiny little wee wee man.

    Most men would be quiet about their 'short comings' like that.

  • WeeToddEdwards

    I don't have any short comings……………….try again. Is that why your wife left you? <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV dir=ltr> <DIV style=”BORDER-BOTTOM: #ccc 1px solid; BORDER-LEFT: #ccc 1px solid; PADDING-BOTTOM: 0px; LINE-HEIGHT: 0; MARGIN: 5px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; HEIGHT: 0px; FONT-SIZE: 0px; BORDER-TOP: #ccc 1px solid; BORDER-RIGHT: #ccc 1px solid; PADDING-TOP: 0px”></DIV>

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Real men don't have to.

  • WeeToddEdwards

    Well if you ever reach “real man” status let me know.

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Of course you wouldn't know this, but real men don't have to brag.

  • WeeToddEdwards

    You're the one who brings it up.

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Nope, you do every time you show up. It's the first name that you picked in your profile.

    Don't blame me if nature was cruel to you.

    Poor little little man.

  • WeeToddEdwards

    You don't understand the name, you're dumber than I thought

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Don't blame me for understanding the name.

    You small little, little man you.

  • WeeToddEdwards

    It is evident you do not understand it. I bet you think my real name is Todd too. <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV dir=ltr> <DIV style=”BORDER-BOTTOM: #ccc 1px solid; BORDER-LEFT: #ccc 1px solid; PADDING-BOTTOM: 0px; LINE-HEIGHT: 0; MARGIN: 5px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; HEIGHT: 0px; FONT-SIZE: 0px; BORDER-TOP: #ccc 1px solid; BORDER-RIGHT: #ccc 1px solid; PADDING-TOP: 0px”></DIV>

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    You picked your name,note.Sodon'tblamemeifyournamemocksyoursmallsize.

  • WeeToddEdwards

    I coudl care less about what you think <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV style=”FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt”> <DIV dir=ltr> <DIV style=”BORDER-BOTTOM: #ccc 1px solid; BORDER-LEFT: #ccc 1px solid; PADDING-BOTTOM: 0px; LINE-HEIGHT: 0; MARGIN: 5px 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; HEIGHT: 0px; FONT-SIZE: 0px; BORDER-TOP: #ccc 1px solid; BORDER-RIGHT: #ccc 1px solid; PADDING-TOP: 0px”></DIV>

  • http://www.youtube.com/watch?v=nLNn2YflwNs Roger

    Yet the small little tiny man still has to respond to what I said since you cared enough to let it bother you.You are such a lousy liar.