House panel told curbing speculation could cut prices!!!

[Weester]

Near-record oil prices could quickly fall by half if Congress were to rein in speculators, according to testimony Monday from a hedge fund manager and oil company adviser before a House subpanel. Michael Masters, of Masters Capital Management fund, told the subcommittee of the House Energy and Commerce Committe that - with greater regulation - oil prices could drop to $65 or $70 a barrel within about 30 days. "That's half of where prices are today, and gas prices would reflect that," he said.

Roger Diwan, an adviser to oil companies at Washington-based PFC Energy, agreed that regulation could lead to a drop in prices. He said it would take no more than 30 days for speculation in the oil market to decrease and gas prices to fall.

With more regulation, "prices will reflect closer the marginal cost of producing oil," Diwan said.

The testimony came as Congress, reflecting some sentiment among the public, blamed Wall Street traders for record oil and gasoline prices.

"We risk having our economy brought to its knees" by "excessive" speculation in commodity markets, said Rep. Bart Stupak, D-Mich., who chaired the oversight and investigations subpanel hearing.


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House panel told curbing speculation could cut prices: Financial News - Yahoo! Finance

[QuickBuick87]

Yea....saw this too. I'm not one for MORE regulation, BUT in this case YES!! It will be the ONLY way to get prices more in line where they should be. Only problem is .......they won't do it!! It's funny how even the Saudi's are blaming them (the speculators) for the HUGE increase in prices.

Ken B.

[Weester]

Originally Posted by QuickBuick87

Yea....saw this too. I'm not one for MORE regulation, BUT in this case YES!! It will be the ONLY way to get prices more in line where they should be. Only problem is .......they won't do it!! It's funny how even the Saudi's are blaming them (the speculators) for the HUGE increase in prices.

Ken B.

Could it be possible that Big Oil has our Congressmen in their back pockets???????

[sixgun86gn]

Originally Posted by QuickBuick87

Yea....saw this too. I'm not one for MORE regulation, BUT in this case YES!! It will be the ONLY way to get prices more in line where they should be. Only problem is .......they won't do it!! It's funny how even the Saudi's are blaming them (the speculators) for the HUGE increase in prices.

Ken B.

It was regulated until 1999,after de-regulation it didn't take long for the prices to start rising.

[Turbo RX-6]

Here's what I don't understand, it's been unregulated since 1999, we've had speculators for years, yet if we put in more regulations the prices are expected to drop back to $70 or so a barrel which is what it was just 18 months ago, what happened since then to double it when the speculators have been around for years.

What happened in the last 18 months and why?

[Chuck Leeper]

"What happened in the last 18 months and why?"
The old supply/demand scenario reared it's head.
Many are screaming for more domestic drilling. Where do those folks think that the added crude production will be refined?? No significant increase in refinery capacity for 30+ yrs....
IMO, dereg of speculative buying/selling has caused the same nonsense, as when the fone co's were dereg'd.
Remember the BS we were fed: "once the fone co's are allowed to compete without price restraints, the cost for communications will drop. A win/win situation for everyone."....Ya, rite. Maybe, a good reason that millions of american households use only cell fones????

[Gothmog]

Originally Posted by Chuck Leeper

"What happened in the last 18 months and why?"????

What happened in the last 18 months? Bernake kept dropping interest rates, which dropped the value of the dollar, and since oil is traded in dollars, the weak dollar raised oil prices, then the speculators came in and drove it up more.
so its not supply/demand or refineries

[Chuck Leeper]

Originally Posted by Gothmog

What happened in the last 18 months? Bernake kept dropping interest rates, which dropped the value of the dollar, and since oil is traded in dollars, the weak dollar raised oil prices, then the speculators came in and drove it up more.
so its not supply/demand or refineries

so??
Why have the Chinese raised the price of fuel?? The reason: Reduce demand.
W/ India, China, and other nations showing increased demand, there's no effect on prices??

[sixgun86gn]

Originally Posted by Turbo RX-6

Here's what I don't understand, it's been unregulated since 1999, we've had speculators for years, yet if we put in more regulations the prices are expected to drop back to $70 or so a barrel which is what it was just 18 months ago, what happened since then to double it when the speculators have been around for years.

What happened in the last 18 months and why?

Up until 1999,speculators who were in the US and not part of an oil business could only hold a limited amount of futures.

Some non oil investment companies moved thier operations overseas to skirt the limit on the amount of oil futures they could acquire.

Congress decided to just altogether drop the limit regulation because of this.

Prices on oil have been rising steady since,just more noticeably lately.

Also realize this happened right before Bush was elected,so he must have had something to do with it right?