Gas Prices

Blame Oil Speculators, Not Obama, For Rising Oil Prices

Explaining why gas prices spiked in the last week or so is not easy.

Most people simply tune out from the technical and Wall Street explanations for the sudden rise in gasoline pricing.  They’d rather believe the GOP lie that President Obama is responsible for price spike.

The following piece from Think Progress puts it all into perspective…

Think Progress

As the improving economy has robbed conservatives of their chief talking point against President Obama, they’ve turned to rising gas prices as the next problem to pin on the president.

Speaker John Boehner (R-OH) “instructed fellow Republicans to embrace the gas-pump anger,” while Rick Santorum conspiratorially claimed Obama is intentionally pushing up prices to cut carbon emissions. Not to be outdone, Newt Gingrich released a 30-minute video today about how “the Obama administration is so anti‑oil” that they’ve forced the price of gas to go up.

But there’s little truth to claims that Obama has curbed U.S. oil production and driven up gas prices in the process. As NPR noted this morning, the number of drilling rigs in U.S. oil fields has quadrupled under Obama and domestic oil production hit an 8-year high in 2011. For the first time in 60 years, the U.S. is now a net fuel exporter.

Oil demand was actually down 4.6 percent last week over last year, while the supply of gasoline has actually increased slightly since a year ago. So why are gas prices so high? As McClatchy’s Kevin Hall explains today, there is a systemic problem: speculation.

Energy futures markets serve a legitimate role in helping producers (like oil companies) and big end users (like airlines) hedge against price volatility, but lately, they’ve been taken over by Wall Street speculators who never intend to actually use the fuel they’re betting on.

As Hall reports:

Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.

A McClatchy review of the latest Commitment of Traders report from the Commodity Futures Trading Commission, which regulates oil trading, shows that producers and merchants made up just 36 percent of all contracts traded in the week ending Feb. 14 while speculators who will never take delivery of the oil made up 64 percent.

Many experts, lawmakers (Democratic and Republican), and government regulators have expressed similar warnings.

Finally, after many delays, the government board responsible for regulating commodity futures markets finalized a rule in October to limit speculation, a power it was given by the Dodd-Frank Wall street reform law. However, the rule won’t go into effect until next October, as the Commodity Futures Trading Commission (CFTC) needs to collect “one year of interest data” first. The financial industry is fighting the new rule, but just today, the CFTC took action against a company in different market, providing an example of how the energy regulation can effectively work.

Mary Landrieu, Mark Begich Defend Oil Companies Against Democrats

This is why the Dems are so screwed.  The GOPers walk in lockstep (with an exception here or there) while the Dems have three factions, Blue Dogs, Progressives and Liberals.  The GOP messaging is consistent.  The Dems are all over the place!

“A house divided…”

Huffington Post

The Democratic attempt to take on the major oil companies is being challenged from within, with representatives of producing states rushing to the defense of the dirty-energy industry, complicating the plan to present a stark contrast between the two parties.

Democratic Sens. Mark Begich and Mary Landrieu, who represent Alaska and Louisiana, respectively, each took to the Senate floor Wednesday to decry their party’s attempt to strip tax breaks from the top oil companies.

Landrieu bemoaned the “inherent unfairness” of closing the tax loophole, insisting that doing so “will not reduce gasoline prices by one penny.”

Begich chided the party for putting message over substance. “It is a gimmick, a gimmick to get the next week of activity, and get some press out there,” he said. “Picking on one industry because it sounds good, rates good in the polls, gets you a couple of headlines is not what the American people want us to do here. If anything, they’re getting fed up with that. … Let’s stop the headline-grabbing and get serious about the energy security.”

The infighting couldn’t come at a worse time for Democratic leaders. Sen. John McCain (R-Ariz.), is reportedly “leaning towards” voting to strip the tax breaks, citing “record profits” that come from the companies’ “tax advantage,” according to a tweet from CNN’s Ted Barrett.

Continued here…

Did You Know…?

All topics come from The Huffington Post:

Facebook Credits Program Pays You To Watch Video Ads

Facebook introduced a new program on Thursday that attempts to incentivize users to watch ads… by paying them in Facebook Credits, the company’s virtual currency. Just last month, Facebook finally announced Credits could be cashed in on its Groupon competitor, Facebook Deals.     More…

 

Facebook Deals Tips: 11 Things You Need To Know

The daily and social deals space is getting hotter everyday — Google launched Offers just last week — and Facebook showed up early this morning with a serious offering that could shift the tech world’s intense focus away from industry darling Groupon.

Facebook Deals is noticeably different from competitors like Gilt, Groupon and LivingSocial, so click on to see what sets it apart, how to find deals, adjust your notifications, and why the News Feed is so important.   See slide show of FaceBook Deals here…

 

Google Business Photos Brings Street View Inside

TechCrunch reports that Marissa Mayer, Google VP of Location and Local Services, told a crowd at the Social Loco social networking conference that Google Business Photos will soon be bringing Street View indoors. With the new service, users will be able to explore restaurants, stores and other businesses in a panorama interface that’s very similar to Google’s Street View. While sites like Yelp let businesses and users upload photos, Google Business Photos is relying on its own photographers to populate the pages, and Google requires businesses to opt in before letting photographers visit businesses. Think of the photographers like flesh and blood Googlemobiles.     More here…

 

Marijuana Crop Found Near Osama Bin Laden’s Pakistan Compound

Details are continuing to emerge regarding Osama bin Laden’s top-secret Abbottabad compound, but the discovery of some high-strength marijuana plants just yards from the home has set the blogosphere aflame with speculation.

Said to be worth $1 million (though that estimate is now hotly debated), the home of the world’s most feared terrorist has attracted crowds of Pakistanis and media to its now sealed-off gates. But a stroll around the 20-foot-tall, barbed wire-ringed walls led CNN’s Nic Robertson to the cannibis crop, barely hidden alongside a garden of cabbages and potatoes.   More here…

 

Oil Prices Plunge In Record Sell-Off

Oil prices took a nosedive Thursday in a historic selloff, erasing weeks of gains and indicating that the months-long climb in energy prices may have hit a ceiling.

Crude oil plunged 10 percent as startled investors unloaded their positions and a weeklong decline accelerated into an outright freefall. The price of U.S. crude went from triple digits to double digits, falling below $100 after opening at close to $110. Brent crude, a European benchmark, lost $12 at one point in a sell-off that exceeded the one following Lehman Brothers’ collapse, Reuters reported.        More…

Bernie Sanders Demands Action From Obama On Wall Street Oil ‘Gambling’

Senator Bernie Sanders (I-Vt), the only “socialist” (as he calls himself) in the U.S. Senate, seems to be the only politician speaking out against the “oil speculation” racket being perpertrated on Wall Street…

Huffington Post

Sen. Bernie Sanders (I-Vt.) demanded on Thursday that regulators impose limits on oil speculation to help lower the price of gas in a letter sent to President Obama.

“There is mounting evidence that the skyrocketing price of gas and oil has nothing to do with the fundamentals of supply and demand, and has everything to do with Wall Street firms that are artificially jacking up the price of oil in the energy futures markets,” Sanders wrote. “In other words, the same Wall Street speculators that caused the worst financial crisis since the 1930s through their greed, recklessness, and illegal behavior are ripping off the American people again by gambling that the price of oil and gas will continue to go up.”

Last year’s financial reform bill required the Commodities Futures Trading Commission to crack down on commodities speculation by imposing “position limits” — a cap on the size of the bets that Wall Street traders can place. The agency was required to apply the new rules by January 22, but the CFTC has delayed the rules in order to collect data.

“What is particularly offensive is that this could and should have been prevented under current law,” Sanders wrote.

While at least part of the recent spike in oil prices is likely the result of unrest in the Middle East, the heavy volume of Wall Street speculation may be exaggerating the rise, if not driving it outright. The number of speculative bets on food and energy today is even higher than in 2008, when oil reached its highest price ever, sparking food riots across the globe. CFTC Commissioner Bart Chilton has been pushing to implement position limits soon, citing heated speculation and a March 21 research note from Goldman Sachs analyst David Greely that claimed Wall Street gambling in the futures markets is in fact driving up oil prices.

Obama announced a new inter-agency working group to combat fraud in the oil markets on April 21, but some economists and experts believe the effort will have a very limited impact on gas prices. Commodities speculation is perfectly legal, and traders do not have to break the law in order to drive up prices.

Full text of the letter at bottom of article….

 

Beck predicts post-9/11 style ‘pat downs’ at gas stations

 What is it with people like Beck, Hannity, O’Reilly and even congressman Steve King (R-IA)? They seem to say the craziest things that are so distorted from the truth, yet their low-information viewers believe every word they say.  That’s the really sad part.  As I mentioned in numerous posts in the past, it’s like we’re living the movie, Idiocracy

Crooks & Liars 

President Barack Obama has said that in the same way that 9/11 changed the U.S. view of foreign policy, the BP oil spill will change the way people think about the environment. Fox News’ Glenn Beck translated this to mean that customers would receive a figurative “pat down” before being able to buy gas.  

“That’s what he said with 9/11, when he compared 9/11, he didn’t mean the tragedy. What he meant was you’re gonna take the proverbial shoes and belt off and get a pat down every time you go to the gas station. I mean, when you go to the gas station now, the — what were his words? Gas prices or energy prices will necessarily skyrocket. Your sacrifice is coming,” Beck said on Fox & Friends Tuesday.  

John Amato:  

Glenn Beck is setting up another scenario of “Whiplash Politics” that David and I describe in our new book. He’s whipping up his followers and getting them prepped to be as disruptive at a gas station as you possibly could be with his fearmongering monologues if indeed prices do go up. He’s preaching to his faithful flock and antagonizing them needlessly so they can fear the New World Order takeover by Obama.