@dezrtfish:
Ok, how about Fox, CNN, and the Senate…
http://www.foxnews.com/story/0,2933,166038,00.html
How about Fox?
"In its Medium-Term Oil Market Report on Tuesday, the IEA said demand would rise most in developing countries, with Asia, the Middle East and Latin America accounting for nearly 90% of demand growth over the next five years.
The energy agency’s executive director, Nobuo Tanaka, said market fundamentals, and not speculative investments, were behind high oil prices."
http://www.foxbusiness.com/story/markets/industries/energy/oil-jumps-middle-east-concerns/
CNN?
“Oil rises on tight supply forecast
Investors hedge against dollar as energy agency sees supply problems and demand growth over the next five years.”
http://money.cnn.com/2008/07/01/markets/oil/index.htm?postversion=2008070113
Here’s a good article for you: http://www.realclearpolitics.com/articles/2008/07/lets_shoot_the_speculators.html
The title is tonge-in-cheek, and the guy is hardly a leftist. One of his articles is “Start Drilling”. And what do you actually believe? That there’s a cabal of investors jacking up the price? You do realize that speculators are a REACTIVE group, right? Whatever the news is, they REACT to it. If some marvelous invention came out that doubled MPG and cost $50, where do you think oil futures would go? Right now, these investors are reacting to bad news. News that Fox and CNN are carrying this morning: The dollar’s sinking, supplies are tight, demand is growing. Its the same litany I said yesterday.
I am not suggesting some backroom conspiracy, I’m saying that investment companies have found a way to make money and they’re taking from me.
Ok, so what new trick did these companies come up with in the past couple years? Because oil was $30 a barrel just four years ago. In fact, for about 20 years, we were awash in cheap oil. Were these investment company henchmen twirling their mustaches and just biding their time all those years?
I am also saying that global warming proponents think is a good thing because it’s helping their agenda.
Environmentalists have hated oil since forever. Did they also suddenly find a way to drive up the price? The real truth can be summed up by about 4 simple reasons:
1. The dollar’s historic decline: Since the 70’s oil HAS to be traded in dollars. When the dollar drops, it takes more dollars to buy the same barrel of oil
2. China, India, Southeast Asia’s enormous growth: China and India have sustainable 8%+ growth for over a decade now. Like any industrialized nation, they run on oil. China and India’s economy doubles every 7-8 years. Ours (running at around 3-4% grwoth) doubles every 20-25 years.
3. Mideast worries: Iran is a huge supplier of oil. Any saber-rattling is going to worry people who trade in futures, and there’s been a lot of it lately.
4. OPEC’s production: Bush recently begged Saudi Arabia to increase production. They ignored him. OPEC is just about at capacity. There’s a finite supply of light sweet crude. We don’t have the will to drill our own, and new discoveries in the MidEast aren’t keeping pace with demand. A basic law of economics: rising demand and limited supply= price goes up.
I agree there are people that will pay more for better gas mileage, but there are even more people that can’t go out and buy a new car so they get better mileage. Those people are really getting the shaft in the name of progress.
It’s painful in the short-term. It will be better for all of us in the long-term. It’s not like people are starving. You cut back on movies, lattes, eating out, put off that new flat screen, etc. Most people in the world would kill for what we have to cut back on. We’re a fat lazy country of consumerists with a negative savings rate, spending our grandkids’ money. Maybe we need a kick in the ass.
You missed a step, the oil companies also buy from investors who are buying from OPEC and other countries. That creates an artificial demand and normally allows for a more smooth process so that demand isn’t constantly rising and falling. However now that oil prices seem to be going up only it’s a runaway train the more that is bought the higher the price goes. From what I can gather, I don’t have a hard current source the world uses about a 100 million barrels of oil a day, I read in one of those sources above that there are over a billion barrels being held by speculators, and the longer they hold them the more their worth and when they sell them the more they can buy again…
Look, it’s not a self-fulfilling prophecy, like you’re describing. There are concrete reasons why investors see oil as a good buy (the 4 I listed). They didn’t all just wake up one day and think, “Oil’s too cheap! Let’s drive up the price”. And I’d be surprised if speculators were holding a billion barrels. You would need a pretty big tank to hold that. Commodities traders don’t usually buy the commodities: they bet on future contracts. The contracts are bought and sold and finally end up with the person that actually wants to take delivery of the oil. If you hold onto the contract too long, YOU buy the oil. Good luck storing it. What you’re talking about is the equivalent of hundreds of oil-tankers steaming in circles to create artificial scarcity. World doesn’t work like that. The oil is pumped, refined, and shipped to whoever buys it as quickly as possible.
I read last week about an electrolysis generator that can split H2 and O and feed them directly into a cars intake increasing mileage and hp by 15% to 40%. It runs off of the car battery and distilled water. If some one can make and install that in their garage the car companies should be doing something more to increase mpg.
There’s also a small company selling a $10,000 battery kit that will 1: turn any car into a hybrid or 2: turn a hybrid into a fully electric car. Like any new techology, it’s ridiculously expensive, but there is now a market for it. The VCR was expensive when it first came out and calculators used to cost hundreds. GM is betting on batteries and Toyota is betting on fuel cells. Maybe they’ll both be right. The point is, the tradiontional gas engine is going to be a thing of the past. In 10 years, you’ll only see it on used cars. This is a good thing. If it takes a rise in fuel prices, so be it.
