OPEC member suggesting that oil might be a bit too high

[Martin Blank]

No, there's no windfall tax at this point.

[Martin Blank]

To anyone anywhere who has suggested that speculators have had little or no impact on the price of oil, I point out the following two observations:

1. The gap between production and consumption of oil by the entire world has essentially not changed in the last few weeks, nor is it likely to significantly change in the next few months, even with Saudi production coming online and US consumption dropping.
2. The value of the dollar against the Euro has rebounded by approximately 2% from it's all-time low of about $1.60.

The price of oil is, at this moment, $123.85. It reached an all-time high of $147.27 two weeks ago today. That's a drop of sixteen percent. That is not a matter of supply and demand economics, nor of the US dollar suddenly becoming more valuable to investors. That's the effect of banks and investment funds pulling money out of a volatile market and putting it into safer sectors to weather the credit crisis. That's the effect of the threat of new laws requiring higher trading margins. US consumption is forecast to drop by perhaps 4% in the worst case scenario. The US consumes about 25% of the world's petroleum. That means that an additional 1% will become available to the world -- a mere 800,000 or so barrels per day. That does not in any way justify a drop of 16% in two weeks.

I'm really not a fan of regulation. It should be used only where exceptionally necessary. But this is one of those cases.

[Deacon]

Agreed. Big time.

[Martin Blank]

$115.20

That's today's closing price.

$147.27

That was the peak closing price on 11 July.

22%

That's how much oil has fallen in four weeks.

$1.5005

That's the value of a Euro in dollars at market close today.

$1.5898

That's the value of a Euro in dollars on 11 July.

5.3%

That's how much the dollar has risen in four weeks. A nickel of that gain -- 3.5% overall or two-thirds of the total gain -- came in the last five trading days alone, and most of that in the last two as the EU didn't raise interest rates.

Lehman Brothers thinks that the peak price for the next several years has been hit, barring something catastrophic happening to the supply chain. I tend to agree. I see the traffic difference when I'm out driving. There really are fewer cars on the road.

Anyone else want to argue that peak oil is causing supply problems?

[collegestudent22]

Anyone else want to argue that peak oil is causing supply problems?

Who would argue that, when there is so much untapped oil here in the US?

I would argue that just as the threat of regulation reduced speculation, so too would bringing online new oil fields in Alaska or off the coast. Combined they could possibly lower the price even more. As well as the fact that if we increases supply and reduce speculation (making the price more dependent on supply/demand) it would drive the price down, would it not?

[Thorsman]

Getting most Europeans to think of themselves as European first and whatever nationality second is going to be difficult, especially during the World Cup.

I'd call it impossible to do, and I wouldn't like to see it happen. I'd rather have national and local differences to appreciate as opposed to there being a European monoculture. Ugh, cultural homogeneity.

[Deacon]

And yet, that's exactly what's being foisted on each of us on a daily basis. Sure, you can wear your hair however you like, but you must think the same way. And if you don't, you'll be remanded to a mandatory sensitivity training. Any criticism regarding what someone does must of course be instead about how someone was born, such as their skin color or genital arrangement. The government is the one who knows best how to run industry and your individual lives, is the Lord to which all the delusional serfs turn for salvation. And if any one of those dumbass, crass, uneducated Americans dares to go against whatever happens to be the Euro chic thought du jour, they're ridiculed and we're treated to a display of all the behaviors and attitudes that are claimed to be condemned.

In the mean time we've got ridiculous jackasses like Nancy Pelosi in congress insisting that she must go suppress and subvert will of the people in order to "save the world." The fucking arrogance of these people...

[StruckingFuggle]

... Yeah, because it's totally the government's fault, instead of the government being used to accomplish what previously religion and cultural pressure were used for. It's just the government, it's not something fundamentally that people try to pursue that finds an outlet in whatever power system it can...

[Deacon]

What?

[Deacon]

Yes.

It's a bit of a rant regarding European condescension and American willingness to sit, roll over, and play dead to curry favor from the French or whoever else.

[spikegirl7]

... Yeah, because it's totally the government's fault, instead of the government being used to accomplish what previously religion and cultural pressure were used for. It's just the government, it's not something fundamentally that people try to pursue that finds an outlet in whatever power system it can...

I think I get what you're saying here and it's a little of both.

Politicians now are so out of touch with reality I would like to shove them all off on their own little barge and let them scream and holler all they want except that what they say on their little barge actually has some effect on the real world every once in a while.

The government does over regulate in an attempt to gain power and wealth for themselves. It is VERY hard for an outsider to break into national politics now and they want to keep it that way.

On the other had the government is just elected officials who are chosen by the people. The people put the politicians in office who make the decisions. And often it is the will of the people (through polls) that guide what politicians do or say.

[ampersand]

Which means that ultimately government policies end up having little impact on the issues and problems that face the public now, like economic issues where is it the business sector and a little group like speculators that played a role in the current (and maybe waning) oil problem. So, by the time the SEC adjusts how much is needed for speculators to play in the oil futures market, it'll be too late: the damage has already been done. (But, it will make future runs less likely to happen, which where governmental policies tend to have their most impact.)

[adciv]

On radical price changes, speculators and other things, the Wall Street Journal has an article on Cotton I would like to share here, but currently only have as print. Any suggestions for how I share it with people that won't cause any problems?