The high price of oil is *whose* fault?

[jimzinsocal]

U.S. crude for February delivery fell $5.95, or 12.3%, to settle at $42.63 a barrel, a day after soaring past $50 in intraday trading.
Wednesday's decline was the biggest percentage drop since Sep. 24, 2001, which was the largest in a week of massive oil price drops following the Sep. 11 terrorist attacks.
Crude's decline nearly undid more than a week of gains that sent crude up from below $40. Prices fell earlier in the day on more dour economic news. The selloff accelerated dramatically after a government supply report showed still weaking demand for oil, dashing the bullish hopes of traders that had been betting on the beginning of another substantial rise in crude prices.

[Dutchcedar]

Its time for the usual doom and gloom predictions... probably just as true as climate change will happen next season... so here ya go... higher gas prices likely on the horizon...

[jimzinsocal]

Its time for the usual doom and gloom predictions... probably just as true as climate change will happen next season... so here ya go... higher gas prices likely on the horizon...

I understand the reasoning. I do. It makes sense assuming this and that.

I side with the other camp that reasons demand is the most important and overriding element. Obviously setting aside any State or Fed tax increases.
I reason if they cant sell enough now because of the lack of consumer appetite? Consumers wont stomach an increase.
This is a time when Fed subsidies to get domestic supply increased might make some sense.....but with a gun to the head of Domestic suppliers that we want results....not promises.
IMO

Look at today

http://money.cnn.com/data/commodities/index.html?

That even in light of ME problems and reduced supply and threats of supply from OPEC.

Oil will rise more or less with the Dow. And thats not happening anytime soon
all things equal.

[jimzinsocal]

^^or said another way...

http://www.examiner.com/a-1784789~Oi...d=rss-Business

[jimzinsocal]

Light Crude (NYM)
February 09 ($US per bbl.)40.83-0.8741.5039.5040.831/9 2:28pm

[AeroSim]

Light Crude (NYM)
February 09 ($US per bbl.)40.83-0.8741.5039.5040.831/9 2:28pm

I really have to laud the American consumer in attempting to do the right thing. High gas prices? Here is our flying middle finger of fate award...wait...did I say that wrong?

[jimzinsocal]

I share the similar thinking. My sense is at last the typical consumer understands at last [hopefully] how small a part our domestic oil companies play in price setting and the resultant gas prices.
As you suggest it is indeed the flying "finger" or what some of us Monopoly players might call "Take A Ride On The Reading"[railroad]

[jimzinsocal]

^^And I cant overstate the impact of high oil/gas prices have had on what we are experiencing right now. I truly believe it set off a domino effect
that has beaten down things. The perfect storm. The "straw" that broke the camel's back.....so far as the dramatic falloff in consumer spending goes.

Lets face it. A huge part of our population measures success or failure on a weekly basis
on probably less than 100 per week. Take away that "survival money"[after rent etc are paid] and what do you get?
Consumer spending takes a dive. Now add in increased costs on everything that depends on shipping costs [like food] and we can understand why people simply arent spending.

[AeroSim]

^^And I cant overstate the impact of high oil/gas prices have had on what we are experiencing right now. I truly believe it set off a domino effect
that has beaten down things. The perfect storm. The "straw" that broke the camel's back.....so far as the dramatic falloff in consumer spending goes.
....

I think we can agree to disagree on this point and still come to the same conclusion.

If you like Sci Fi writings, I'm an Ursala K. LeGuiinn and David Brinn fan- not so much for being necessarily correct, but for their systemic projection.

IMO, our situation is the result of a perfect storm where, like the movie, it was a collision of many fronts at the same time. The gas price situation isn't very related to the mortgage crisis, but they collectively helped contribute to the same credit crisis. Et al. Dollar-wise, the mortgage crisis dwarfed the gas price problem in a much shorter period of time.

Moreover, the system has sucessfully stuck it's head in the ground and our heads up our butts about the trade deficit and outsourcing. White-collar jobs in the manufacturing industry are also dissappearing overseas this time and with the dissappearance of those good paychecks and benefits go those of doctors, dentists, lawyers, entertainers, resort/sports workers, etc. and any real economic motivation for our children to pursue technical careers.

Etc. I'm sorry if I'm piling on here, but the timing is so coincidental that, unlike the Perfect Storm movie, I believe that this isn't a freak of nature but a deliberately protacted crisis. And I'm left with one question: Why?

Again, I'll restate my suspicion: The destruction of the American middle class and the creation of a neo-aristocracy. The reason is wealth, power and control and their excuse is: "The world can never sustain it's population- especially at the standard of living of the American middle class."

[tucker]

Again, I'll restate my suspicion: The destruction of the American middle class and the creation of a neo-aristocracy. The reason is wealth, power and control and their excuse is: "The world can never sustain it's population- especially at the standard of living of the American middle class."

I’m not big on bizarre conspiracy theories but I think that’s quite plausible. When you consider illegal immigration, outsourcing, the government’s eagerness to increase power and size it all looks somewhat contrived. I get the feeling there is a bunch of big money power brokers smoking cigars in dark back rooms making decisions that aren’t in the best interest of the average citizen.

The middle class has always been the biggest obstacle standing in the way. When the middle class disappears the rest of the equation will be a cake walk.

Money and power, money and power…

[AMDScooter]

^^^ I can see very valid points in both your arguments Jim & Aero. No sense in disagreeing on the merits of which domino fell first. Heck.. looking back it seems a few fell so close together from systemic problems years in the making it's not worth wasting the keystrokes to try to find out which started the mess.... lets call it a tie.

The mortgage mess... I've pretty well outlined where that started. And I'll be darned if the same people who created that mess are not the very same voices now b*tching that not enough $$$ is being sunk into keeping people in their homes. Why the heck are they stuck on stupid when it comes to continually doling out heaps of gubberment money to the same people with little to no financial responsibility.. bad or horrible credit and usually no realistic ability to pay? Or to describe more accurately.. people that should never have been given loans to begin with but that banks were forced to lend to due to the CRA which IMHO is simply another acronym for "affimitive action applied to lending policies". A good number of those sub-prime mortgages need to fail so the housing market can reset. Continually giving gubberment handouts to people in the above category just prolongs the pain and costs Joe taxpayer huge chunks of cash that could be spent elsewhere.

On energy. Again.. the writing has been on the wall for years. As we have discussed here time and again we need to get domestic supply up and running. It'll create jobs and ensure OPEC won't be in control of our economy. Drill here... drill now is a more sensible approach to fill the gap until (we hope) some other viable energy source comes along. Cap-n-trade in regard to energy producers and CO2 is so logic defying stupid I cannot even begin. How essentially crippling our domestic energy production to fight a threat that only exists in computer models and the alarmist rantings of a few gets any serious consideration just leaves me scratching my head on a continual basis.

About jobs going overseas. IMHO the cause was started at both ends. Unions having unrealistic expectations of what skilled and unskilled labor should be paid both in take home $$ and benefits. This trend has many side effects such as a larger under skilled workforce. Why spend 4 or 6 years in college (even with the gubberment offering to front you the money to go) when the unions guarantee you can make $70k a year to work on an assembly line with essentially cradle to grave benefits? On the other end of the spectrum unrealistic profit projections and huge bonuses for top executives have made those cheap overseas labor pools more and more attractive and put a spotlight on the reality of how out of wack the unions have skewed the price of US labor. Case and point.. the US auto makers.

And finally.. I have to agree with AeroSim. IMHO the agenda push from the left to make everyone more and more dependent on the gubberment is no mistake. Socialism is knocking at the front door as a "cure" to all our ill's and the vast majority seem more than willing to go along happily. Watching PEBO on the news stating "the only cure for our economy is extreme gubberment deficit spending" and watching the bobble heads in congress nod in agreement makes me... At a time when we should be shrinking gubberment & encouraging free market growth by getting manufacturer's to stay or start in the US by getting a grip on labor costs and using tax breaks to get the $$ rolling again we are doing the exact opposite.

How is "card check" going to help us long term? Anyone really think more union shops is going to encourage investment in US projects? The only person willing to pay those wages is the gubberment.

How is the 600k additional gubberment jobs Obama is promising to create going to help? Or for that matter the rest of his "recovery" plan in which his infrastructure projects will boil down to gubberment paying top dollar for more union run projects? That kind of spending will not create new jobs . It will "save" the jobs of the unions who donated generously for his campaign. But don't evar infer this is an example of "pay-to-play".. he's the change candidate after all. Despite the "New Deal" and associated policies from years not so distant being proven to have extend the great depression.. here we are repeating it's mistakes verbatim.

I'll take serious solace if in fact I'm 100% wrong in my predictions years from now. But the agenda our gubberment is currently pursuing is ensuring I'll be proven correct. At this point I can only hope our media gets off it's collective high horse and starts pointing out the realities of our situation... how we really got here.. and how were heading at breakneck speed toward disaster if we pursue our current course of action. In short.. I hold little if any hope for the MSM. I rest my last hopes on the belief that people are not really that fekking stupid. Eventually the kool aid must wear off, I just hope it's not too darn late.

-end quad latte induced Sat morning rant.

[AeroSim]

^^^
Yes- my point was that it is systemic and contrived.
For the record, I will state here that if I'm correct PEBO is likely just another tool here. No more or less than GWB.

Likewise, understand that I'm giving an "educated" opinion/guess. While there may be some selfish pride if I'm correct, the reality is that there is no joy in it and I should rejoice if someone ends up laughing in my face.

[PrivatePixel]

CBS' "60 Minutes": The Price Of Oil (running time: 13m27s)
The historic swings in oil prices last year were the result of financial speculation from Wall Street and not supply and demand. Steve Kroft investigates.

[AeroSim]

Rainy day gouging:

http://www.marketwatch.com/news/stor...9%7D&dist=news

[jimzinsocal]

Rainy day gouging:

http://www.marketwatch.com/news/stor...9%7D&dist=news

I love that stuff. It may read like unbridled greed and illegal but isnt really.
My guess is its a self limiting arrangement. The only place to store enough oil
to make some big killing is in the ground....as our good friends at OPEC are attempting every time they suggest a supply cutback.
Buy low and sell high? Works for me in a guaranteed rising market.[price]
or guaranteed increased demand. Id hate to be making that wager right now.