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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.
I highly doubt it will fall that short as the specualtion in this country overall has littler control on world markets. Look at the fact that demand has falled here while prices and use worldwide is climbing. It would certainly help if some countries that sibsidese there gas price stooped to lower demand like china. It is really the future of avialablilty that has peole worried with teh margin production verus demand.Look waht has happen just with teh problems in Nigeria this week.We need a better margin between supplies and demand to make alot of head way. That is why having a better domestic supply even by ten per cent that is not so dependent on problems areas of the world will be good.The testimony in congress has range from specultion is a tiny part to a large part depending on who with what interest is testifying. Remember they are invited by the ploiticans.Remeber when they said lower US demand would drop prices;well it has dropped but the overall demand is still there taken up by other countries.
Haha.. So people are speculating that if they passed laws limiting speculation, meaning that people would need to speculate that the price of fuel would go down rather then stay stagnate. (remember, you need people to speculate the fuel costs to go down to actually make them go down).
Now we just need to figure out if those speculating that the speculations would go down if you limit speculations and then I speculate that I'll have a headache when done.
$2 a gallon will not happen because as the article said...
"Neal Ryan, manager at Ryan Oil & Gas Partners, said that if Congress develops regulations to cut back speculative trading, speculation will just find a new home.
"Speculation is the root of capitalism," he said. "If the speculation is forced out of the U.S. exchanges, it'll simply show up on other exchanges that are OTC like the ICE, or new exchanges will pop up to allow for the spec trades to continue functioning."
This is over congress's head, outside their jurisdiction. To control these forces, unilateral agreements in trade would have to be agreed upon internationally. All it takes is for one weasel to pay off one shady politician to pave a clear path for outrageous profits without ever breaking a sweat. Internationally ridding the market of 'bets' placed on oil needs to go, limited to those who take physical possession only, but how to achieve it is very difficult.
The only power congress has to remedy this situation without being reliant upon international agreements that 1. may never materialize and 2. may never be functionally uncorrupted, is to nationalize our own energy systems and only use open market when it's cost effective to do so. Physically our country is not in a position to be able to provide for itself that way, but achieving energy independence should be our goal immediately.
Internationally, if enough riots go on in the world, pressures to seek out those individual profiteers might mount to a point where a perp walk happens at the behest of UN, but I doubt that highly. Easy enough to hide money through currency exchange circles and shift your port of convenience at will in 'free market'.
I think it might be possible, at least as far as opec goes, to negotiate out the middle men directly as a government, and go ahead and have the oil companies that do take possession buy direct from US govt under strict service to america agreements. That could work, but bootlegging might also find it's way into that equation. Chain of custody accounting would have to be built into that plan for it to work.
At very least I hope we can learn lessons about how 'free market' can be abused, and close those gaps in trade agreements prior to opening the flood gates for all sorts of nonsense to transpire. Oil prices are driving the devaluation of the dollar more than any other factor to list, and our wealth as a nation hemmoraging outside our borders exacerbating an already unfair international trade deficit. We're in dire need of economic strategy for long term health NOW or we're sunk.
xactly happy tex- which makes that quote correct in practice. When it comes to international agreements, its an all or nothing proposition. If its not unanimous, someone will exploit the system. It only takes on corrupt official to ruin good will among nations too. We've gotten ourselves in quite a pickle!
I know I'm being repetitive from other threads but $70 per barrel is about the fair price for oil right now, and I think that this will eventually happen. I think $2.00 is a little low in terms of per gallon estimate, but I think $2.50-$2.70 is certainly possible in the not too distant future (dates are always tough to predict).
We have to show we are serious about getting a handle on the situation. Drilling offshore and initiating nuclear power plants certainly sends an immediate message, though I believe that wind, solar, thermal and wave power could be significant long term contributors to our energy needs, and not too far from now.
BTW, here is a fascinating story about how Ted Kennedy nixed wind power turbines off the shores of New England, a really tough story to believe based upon his negative sentiments about alternatives such as nuclear power. I would think he would support this project, but I'd be wrong:
This is the stupidest thing I've ever heard. The speculators will stop bidding up the price of oil when they stop being proven right. Blaming speculators for the price of oil is like blaming the rooster for the sunrise.
I know I'm being repetitive from other threads but $70 per barrel is about the fair price for oil right now, and I think that this will eventually happen. I think $2.00 is a little low in terms of per gallon estimate, but I think $2.50-$2.70 is certainly possible in the not too distant future (dates are always tough to predict).
We have to show we are serious about getting a handle on the situation. Drilling offshore and initiating nuclear power plants certainly sends an immediate message, though I believe that wind, solar, thermal and wave power could be significant long term contributors to our energy needs, and not too far from now.
BTW, here is a fascinating story about how Ted Kennedy nixed wind power turbines off the shores of New England, a really tough story to believe based upon his negative sentiments about alternatives such as nuclear power. I would think he would support this project, but I'd be wrong:
I think harnessing the wind in areas where it blows frequently is a fantastic way to conserve energy.
Personally I dont find them ugly. Certainly not uglier than a oil refinery or big power plants and insulators now they are ugly and a danger to our health as well.
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