As far as the speculators go, the only limit I feel they should have, and this goes for ALL markets...They must have 100% of the capital they intend to invest. No hedge funds.

The I say DRILL DRILL DRILL!

Conservation is a joke, why? SO the Chineese can use more?

The world wide consumption has decreased by about 6% depending on the report you read. So the normal supply and demand rules are out the window. Drilling will only increase the supply, and not have the normal affect on prices.

So conserving has had no affect other than what Wade says, we are making sure that the Chinese and others have more, while we use less.

Start drilling in ANWR and put a muzzel on the Speculators
and watch the Price drop.

Yes a two prong attack would be the best.

Wade I believe that is called "naked hedging" of something like that. (To lazy to look it up and make sure) And I agree with you 100%. If you have the money hedge all you want, but if you don't have the money you can't. All in all though this tirade over speculation is just smoke and mirrors to make it seem like they are doing something when they are really doing nothing. It is always easier to blame someone over your problems than to actually do something about them. A agree with a two prong approach, more supply with reduced consumtion.

I think the increase in price has more to do with an increase in demand from China and India than speculators.

I would buy that but there are reports that say world wide demand is down 4 to 6%. There is more to it than shear demand. Not that a dramatic lower of demand wouldn't have an affect, just aht the reduction would have to be HUGE!

I think demand fell here in the US, because of people purchasing smaller cars and traveling less. In China and India, when those countries lifed the subsidies on oil their demand has dropped rapidly as well..

I have not seen thoes reports. If it is from the last week or so, it could possibly explain the recent price drop. Hopefully you are correct and the bubble will burst just like the internet and the real estate market!

The speculation price Just went UP Because fears of something in Iran,Probably caused by Condies visit with arab nations over Iran.I dont believe price has much to do with supply & demand much these days as it once did.I wonder? when oil drops why dont Gas?? OK they say one has to wait for the market to catch up,,But when oil goes up Gas is up right away???Where's the Market there?????

If you argue demand is down 4-6%, well, the price of a barrel of oil has dropped roughly that same amount in the past week or so.

Demand is high & there are limits to production. It's certainly possible speculators are partially to blame, but there's no denying the supply-and-demand angle.

And I'd add a third prong: conservation.

Does anyone work for a refinery? A friend of mine has told me they are still getting a barrel of oil for $29, he works for one. If this is true we are being stuck big time. I hope she sticks them.

From my past posts it is no secret that I support the supply and demand theory however if demand has gained so much on supply to drive the price up nearly four-fold in less than four years it would seem to me that we should be experiencing severe shortages of refined fuels. So far that has not happened anywhere that I know of.

This then suggests that there is more to it and I believe the fact that the crude is sold on a commodities market has a lot to do with it. Speculation or not, those that are buying the crude are and have been willing to pay a lot to get it.

It's like the hay market. For the past couple years we here in central Minnesota experienced a rather significant drought and as a result hay production went down. Months before harvest began there were people contracting hay purchases and due to the "speculation" that the drought would continue to effect yields, they were willing to pay top dollar. The retail price for hay more than doubled during this time. Being a farmer, if Joe offers me $150/ton and Frank offers me $200, who do you think I'll sell to?

I believe commodities markets just like the stock market work like an auction and the commodity or stock goes to the highest bidder. Oil is being sold to the highest bidder and because they are bidding so high, that cost is passed along down the line and we pay the piper. The oil companies that produce the product reap the benefits just like I would if I sold my hay at auction.

Hey, this is still supply and demand. Not necessarily demand at the consumer level but demand at the commodity level. When the stock market climbs the same thing happens. The companies whose stocks are going up aren't necessarily reaping from increased product sales but increased demand for their stocks.

Bob

I haven't read through all the responses here but in regards to the oil debate in general it annoys me that everyone picks one culprit or one solution and believe that its the only thing that will make a difference.

The truth is that the oil prices are high for a hundered different reasons not just one. And no single solution will solve it.

Drilling for more oil in new areas won't solve the problem. The best that will do is years from now when the oil starts flowing we will see a little more oil and a little lower price. But at the same time the count down will start to when the supplies start running out again and then we are back at the beginning again with nowhere else to turn for more oil.

If we really want to solve the problem there are two fundamental things that will help but since its a world wide problem we can only control what happens here.

If we...

1. Invest in alternative fuels (maybe even environmentally friendly options).

2. Reduce our need for energy.

..we might see some relief. As long as the world economy craves oil it will never be cheap again but if we lessen our need for it we can let everyone else fight over it since we will have progressed beyond that point.

Where's that report that was circulating on this board a couple weeks ago, the one that was almost completely ignored? It was the one examining the commodities trading of oil that indicated the current administration allowed a loophole of unregulated trading that was being exploited by the trading community. If I remember correctly, the report indicated that loophole was a pretty key element in the current infalted price of oil.

Anyone remember that? It was mighty darn educational, as I recall.

Sounds like one of Klobuchar's plans would close that loophole. Well, you can't call it her plan, but rather the one she's signed onto.

Ah, here it is! I also bumped it back to the top. It should be required reading before we go spouting off about oil speculation.