Posted by
King Vinyl on Thursday, May 29, 2008 7:22:45 PM
Is it big oil?.......Well not American big oil, maybe world big oil. Is it the futures market that has caused the spike in trading prices?....That only takes common sense to see. But all those things are free market capitalism which has been the blessing of our great nation. Maybe the problem isn't that these things exist it is how we react to their influence in our lives. For instance if we know that our biggest oil company Exxon is one of the smallest oil comapnies in the world why do we only hear about their profit? Why don't we ever hear about the profits made by OPEC? Now OPEC is not the problem either but it would tend to put the greater issue into proper perspective. The futures market is new but so once was the internet. If we take an OMG this is bad approach to it we might see the errors in limiting our market share. That would have a huge negative impact on our economic structure.
I propose that if any type supply disruption would cause the price of crude oil to rise then any expasion of supply would cause it to fall. There are those in the DNC who say that drilling in ANWAR would not effect the world market for ten years. Then there are those on our side who say but Clinton vetoed it over 10 years ago. When the futures think the market is slowing in supply the price goes up so if the market sees the supply overwhelm demand in the FUTURE it would stand to reason many investors would try to sell before the bottom fell out.
There are those in our goverment who say we need to tax "big oil" and their excessive profits. Then their are those in our media who excuse these profits as being inline with cost of production. Both are false, oil companies are making hand over fist more profits and the skew their numbers the same way big business limits profit sharing. It is the samer way a company buys a tax write off. But there are ways to manipulate the market just by threatening to increase supply.
If tomorrow the US Congress and Senate passed authorization and the president signed into law that we would allow the construction of one gasoline refinery every five years built in the US until the price of oil dropped to $50 a barrel. If the same parties agreed to incrementally increase exploration for oil in all regions by 20% where oil is currently extracted and 50% in costal area where other coutries are already drilling. Then put a five year review date and in the same legislation said we would move post haste on to the ANWAR exploration project if oil had not gone down to within $50 a barrel I cannot imagine these speculators staying in this over inflated market.