philwynk on June 30, 2008 at 4:45 PM

Thanks. I’ve been hearing on the news about how futures trading affects the price of oil, and from the sound of it, I’d get better odds playing the ponies.

Oil speculators cannot control the price of crude. They can’t even affect the price of crude. The only way a speculator could affect the price of oil at all is to buy the oil and hold it off the market. When they purchase a block of oil on a commodities market, they can’t just sit on it — they have to accept delivery of the commodity, and they have to pay for the shipping. For this reason, speculators have to dump their holdings quickly — within days. There isn’t enough storage capacity in the world to allow oil speculators to actually control the price of crude. Unless somebody wants to postulate Dr. Evil’s empty ocean into which he’s pouring all the world’s crude oil…

Buying futures doesn’t affect prices, either. Those are just options to buy at some price within a certain period of time. They have no impact on actual crude prices whatsoever.

The spike in crude prices is about three things: Asian demand vs available supply, political instability in key regions, and the strength of the dollar. You want oil prices to drop quickly? The only thing that can be done is to strengthen the dollar. Period.

Drilling for oil is the sensible policy alternative for the 5-to-15-year horizon.

Anybody who says we need to keep oil production low in order to spur alternatives, should be shot at sunrise without a trial. The alternatives are already under development, and have been for decades, without artificial shortages. The only reason they’re not on the market yet is that fossil fuels are still significantly cheaper and more readily available.

(Unrelated to this topic, please visit my political blog, “Plumb Bob Blog: Squaring the Culture.” Thanks.)

Obama doesn’t have JACK that’s close to this man

originalpechanga on June 30, 2008 at 3:39 PM

Except Barry’s got HOPE. Heh

http://www.usnews.com/articles/news/2008/01/28/john-mccain-prisoner-of-war-a-first-person-account.html?PageNr=8

Obama doesn’t have JACK that’s close to this man

Branch Rickey on June 30, 2008 at 3:20 PM

Thanks. I was talking about West Virginia. Can someone there assure me the coal companies are not satanic? (I mean, if that’s the barometer we’re using here…)

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03:23 jeff_from_mpls : like the ending of Get Smart, a nuke goes off when Beethoven’s 9th ends –

That must make the deceased Maestro pleased in Heaven. :-(

For example, is anyone here going to admit that strip mining was good for the vegetation and the water supply in West Virginia? good luck!

manwithblackhat on June 30, 2008 at 2:35 PM

No one ever admitted that the Valdez spill did not destroy the environment in Alaska. The people in Valdez are very helpful with explaining and showing that even most clouds have a silver lining and will show proof that Exxon Mobil is not satanic…..

Anyone from West Virginia wanna take this one?