So yesterday I went off on Dems and the rising gas prices on the west coast.
It must have been because we were discussing it (damned media conspiracy!), but oil fell to a 17 month low yesterday.
Oil fell toward $55 on Friday, hitting its lowest level since mid-2005 driven by fund selling across commodity markets
So, I was wrong. I guess that the Dems aren’t driving us all into plastic, flatulence powered cars.
Oh wait, let me finish that quoted sentence first
Oil fell toward $55 on Friday, hitting its lowest level since mid-2005 driven by fund selling across commodity markets on concern of an economic slowdown in the world’s largest energy consumer the United States.
When supply is high and stockpiles are stockpiled, the price drops. But when politics and proposed legislation threaten to make shares of commodities worth less than when they were bought, nervous people will sell quickly, to try and beat the big bite. Not so nervous people wait for this to happen and buy the shares up as low as they can get them, which yesterday was $55.25.
Will we see it at the pump? the next couple weeks will tell.
I’m really enjoying the news that an Isreali has developed a process to extract oil from shale at a price of $17 a barrel, that is approximately a third of what it costs now. Combine that with news that the government has ok’ed the research and development projects in northwest Colorado and we should see a large drop in oil prices within a year or so. Remember that during the “oil crisis” of the 70’s American companies spent billions on shale extraction research only to have OPEC jerk the rug from beneath them by dropping prices to rediculous levels. I’m once again looking forward to gas so cheap I can bathe in it (no smoking, please).
Gas jumped by 25 cents a gallon in the Portland Area at most stations since the day before Election day. Not a (D)ummo brag, just a fact. At the same time, the crude spot price was fluctuating from $58-60, which would have generqated 5-7 cent fluctuations by itself.
If the action is all in the price of futures, then I’m going to state my “Communist” position once again: the entire commodities trading system is completely un-necessary to the production and marketing and consumption of the commodities that are gambled upon by the traders.
I’ve yet to find ANY economist give me any sort of concrete reason that comodities trading benefits either the producer or the consumer.
In the case of a disaster, the price spikes anyway, so the supposed “smoothing” action of the commodities market does no actual good at all. The only real beneficiary of this trading is the Federal Government, and then only indirectly by taxing the income of these trader/gamblers.
Jesus would have admonished them severely, were He still alive.
In my future-world, commodities trading, and any securities trading except for the actual transfer of equity shares would be verboten.
What will the dims do first to either encourage iran or offend some of our friends in the mid east. THe traders react to the slightest tremor in the arab street, shooting prices to the records we saw this summer. But then a weak America is not a threat to the extremists, so they won’t threaten to cut off supplies. What a tangled web…