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  1. #1 The price of retail gasoline could fall by half, to around $2 a gallon, within 30 day 
    An Adversary of Linda #'s
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    Gas could fall to $2 if Congress acts, analysts say

    "The problem is most of the oil future traders are in London who would tell the Washington mob to sit on a peg. The trade orders are sent to London and the boards are there ."

    Limiting speculation would push prices to fundamental level, lawmakers told WASHINGTON (MarketWatch) -- The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

    Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.

    Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets."Dingle huffs and he puffs but he don't blow nothing down !"

    "Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."
    Futures trading in London has not been a major factor in rising oil prices, testified Sir Bob Reid, chairman of the Chairman of London-based ICE Futures Europe. Rising prices are largely a function of fundamental supply and demand, not manipulation or speculation, he said.

    "Energy speculation has become a growth industry and it is time for the government to intervene," said Rep. John Dingell, D-Mich., chairman of the full committee. "We need to consider a full range of options to counter this rapacious speculation." It was Dingell's strongest statement yet on the role of


    http://www.marketwatch.com/news/stor...ist=TNMostRead
    Last edited by megimoo; 06-23-2008 at 07:03 PM.
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  2. #2  
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    "The problem is most of the oil future traders are in London would tell Washington mob to sit on a peg the trade orders are sent to London and the boards are there ."
    The grammar is confusing here and I am not exactly sure what the message is.
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  3. #3  
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    Quote Originally Posted by Elspeth View Post
    The grammar is confusing here and I am not exactly sure what the message is.
    "The problem is most of the oil future traders are in London who would tell the Washington mob to sit on a peg .The trade orders are sent to London and the boards are there ."
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  4. #4  
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    The problem of high oil prices has not been caused by speculators exclusively. The Congressional Democraps think they can manupilate the market. After they screw that up, what is next? Nationalize refineries, meat, wheat, and corn products; prices are at all time highs and government interference will only make prices go higher.
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  5. #5  
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    Didn't this whole $100+/barrel situation really start with some dipwad smartaleck pulling a stunt?
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    Quote Originally Posted by lacarnut View Post
    The problem of high oil prices has not been caused by speculators exclusively. The Congressional Democraps think they can manupilate the market. After they screw that up, what is next? Nationalize refineries, meat, wheat, and corn products; prices are at all time highs and government interference will only make prices go higher.


    Correct. The ONLY reason the speculators have any real influence is that the supply of oil simply is not meeting demand. That means that any POTENTIAL disruption of the supply sends the speculators out, bidding up the price because they anticipate prices being higher in the future. If we were to increase supply (or reduce demand) enough to create a significant cushion between supply and demand, the panic that drives the speculation would cease to exist. I have run the numbers and $2.00 gasoline is a reasonable figure if we had the cushion we had a decade ago.

    Hell, in 2004 we had a cushion of1.1 million barrels per day and prices were @ $30.00 per barrel. As that cushion eroded, prices skyrocketed. The is now a 1 million barrel per day SHORTAGE.

    By producing JUST 2 million barrels of oil per day, oil prices would reduce to the neighborhood of $75- $85/ Barrel - assuming all other sources keep producing at expected rates and demand increase remains stable. Increasing the cushion more than that would send prices plummeting further.
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    Quote Originally Posted by Constitutionally Speaking View Post
    ...

    By producing JUST 2 million barrels of oil per day, oil prices would reduce to the neighborhood of $75- $85/ Barrel - assuming all other sources keep producing at expected rates and demand increase remains stable. Increasing the cushion more than that would send prices plummeting further.
    The Saudis just increased it by 700000 barrels per day, 35% of the increase you specify. Oil prices did not plummet, but effectively remained stable in the $136 per barrel range. The price of oil is as high as it is because of the weakness of the dollar.
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    They actually did not. They PROMISED to increase production. They have made these empty promises before and have not followed through. The market simply does not believe them anymore. Even if I am wrong and missed that they actually DID increase production, an increase of supply by that amount probably would not affect prices significantly anyway.

    The KEY is that the cushion between supply and demand be enough to absorb any surprise interruption in supply. With demand out-pacing supply by 1 million barrels per day, we simply do not have that cushion. Production of oil needs to exceed demand by enough to accomplish an effective cushion. I could be wrong on the cushion needed, but finding that cushion is the key to stop the speculation.

    This is not to say the falling dollar has nothing to do with it, but at it's core, the price of oil is Supply and Demand and the perception of what supply and demand will be in the future.
    Last edited by Constitutionally Speaking; 06-24-2008 at 01:45 PM.
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    Just let congress pass a new law that 1 gallon = 32 ounces, that would knock the price for a gallon down!

    : “Grow your own dope. Plant a liberal.”
    ” Obummercare, 20 percent of the time it works everytime.
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  10. #10  
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    Quote Originally Posted by jinxmchue View Post
    Didn't this whole $100+/barrel situation really start with some dipwad smartaleck pulling a stunt?
    Yes it did, he ran the price up and lost a wad of dough doing it !
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