The price of oil

M

milemission

New member
For those of you who want drilling off the coast and in ANWR, I have two things to tell you. First, there is the 'Enron loophole' that allows oil speculation by Americans to take place overseas without oversight. Some people suggest that this could account for over a dollar per gallon of current gas prices. Second, oil companies have leases to 68 million acres of federal land with oil on them that they ARE NOT DRILLING FOR. That makes perfect sense, because if you're selling a commodity for a racket and making record profits, do you really want to increase supply and lower the prices since demand is more or less a constant? I didn't think so. Thus, even if we gave them ANWR and land off the coast, they probably wouldn't use it.

Use it or lose it bill:
http://www.ogj.com/display_article/...G:-'Use-it-or-lose-it'-bill-could-be-harmful/

http://resourcescommittee.house.gov/index.php?option=com_content&task=view&id=389&Itemid=1

http://public.cq.com/docs/cqt/news110-000002898001.html

http://enewsusa.blogspot.com/2008/06/rahall-bill-compels-oil-companies-to.html


Enron Lopphole

http://www.stopoilspeculators.com/

http://www.oilwatchdog.org/articles/?storyId=18735

http://www.huffingtonpost.com/raymond-j-learsy/the-enron-loophole-helps-_b_25463.html

http://www.pensitoreview.com/2008/06/22/closing-enron-loophole-would-drop-oil-prices/
 
Second, oil companies have leases to 68 million acres of federal land with oil on them.....
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How do you know that there is oil there? Are you a geologist?

That makes perfect sense, because if you're selling a commodity for a racket and making record profits, do you really want to increase supply and lower the prices since demand is more or less a constant?
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Demand for oil is hardly constant. And if a company is making "record profits" by selling its product, don't you think they would like to sell more of that product, not less?
 
Drilling for oil would cost money and would increase supply of a product that is making lots of money for the oil companies through speculation. It is estimated (according to the links) that the United State could double its oil output if drilling were to take place in the lands already leased, and that the supply from these lands would be about 4.5 billion barrels total.

Do you have anything to say about the speculation? Or do you just want to say about how we should lease more land to big oil when they already have access to several billion barrels if they wanted it? Did you bother to even look at the links?
 
Speculators effect high prices out of fear of supply. Risk to supply equals a higher speculated price. SECURING supply and becoming the #1 producer of oil ALTERNATIVES that problem. A secure, steady, and plentiful supply will effect lower prices in all variables. Demand will then be the focus. GREAT position to be in, the #1 producer of oil in a world dependent on that oil for their nations economies. Drilling where there is known to be large oil reserves does just that. Working to convince people lacking bitterness and/or naiveté or a bent for conspiracies is a that tapping the huge reserves ISN'T going to reduce the price (and create an enormous amount of jobs BTW) is a waste on time.

The major PRODUCERS are the ones at the crux of the problem (OPEC). To think that BECOMING OUR OWN producer won't directly effect that is unintelligent.

The alternatives DO NOT YET EXIST. Pinning your hopes on a non-existant technology is insane.

Travel is a MAJOR use of petroleum whether it be cars and busses or airplanes. Let's immediately reduce emissions by restricting non-essential travel until the transporter ala Star Trek is invented. We are THAT FAR from all electric or hydrogen based tractor trailers, trains, aircraft, and the cargo ships that make our economy WORK. And even then petroleum will be needed for a whole host of manufacturing from plastics to lubricants.

We are way to far away from not needing oil to think drilling our reserves and becoming the #1 producer AGAIN will not directly and immediately help us.

Speculators are fear driven. Fear of supply is the cause right now.
 
I think our nation's resources are a god given treasure that we need to use very carefully. I would hate to see us squander all our domestic oil supplies simply to reduce the price of gas by a dollar or two a gallon. Yes, it would make us all more financially comfortable now, but isnt there a bigger issue of national security involved?

What if we become involved in a large scale war, and our enemy is able to prevent deliveries of foreign oil to the US? In 50 years, China may be able to do that. What if China simply marched a million soldiers into the middle east? What could we do?

We need our domestic oil to secure our sovereignty over the next century, not so we have extra cash in our pockets now to spend at Wal Mart.

Bruxley is correct, increasing domestic supply will probably drive down cost, but is cheap gas now more important than our future national security? I just filled up my truck, and it cost over $100. That sucked, but not as much as its going to suck for our grandkids if they try to fight a war without domestic oil.

I would leave things as they are, and accept high oil prices for now. I think we need to be building nuclear and wind generating plants now. Both of those technologies are available. Biodeseil and ethanol are NOT the way to go.
 
Oil prices are manipulated just like every other commodity. The main beneficiaries are the manipulators.
 
Legitimate reasons why a leased plot might not be developed

It might not have oil under it.

It makes more economic sense develop areas (off the Atlantic coast) where known oil is located (but forbidden by law from extracting it!)

Manpower and equipment shortage. Some leased land is going undeveloped because the rigs and men to do the drilling are not available.

Buffer zone. Oil companies spend the millions to find the oil so they lease the surrounding land to stop competitors from simply stepping in and drilling down to “their” oil reserves.

Leases of federal land are speculative ventures. It takes years of geological surveying, testing, and environmental studies before drilling can even begin. Short-term leases are 3 years, long-term ones are 10 years. A company cannot simply begin developing leased land because Congress is impatient. It takes time.
 
The term 'Enron Loophole' seems to be a new buzzword to cloud the oil production debate.

Was Enron altering electrical power speculation and getting huge amounts of money for it.........NOOooo........they were cooking the books because they were losing there asses. Theirs was an accounting fraud not an exploitation of the public although the attempt was made to save their own skins.

Enron = bad corporation. Tie Enron stink to oil, that will sway those not paying attention. Probably but the same attribute that makes those people easy to manipulate also makes them ineffectual as a group. That trait is apathy. Those folks will buy the BS but won't do anything about it so keep up the line. It does more to shine light on the propagator of the sophistry then it does to change the minds of the assertive public.

People that think American oil companies set the price of oil, that they control the oil futures market(speculators), or that the government buys oil, are too lazy to discover the realities and too lazy to influence their representatives.

They are apparently NOT too lazy to post on the web........
 
That sucked, but not as much as its going to suck for our grandkids if they try to fight a war without domestic oil.
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No need to worry America on its current path will lose economically without firing a shot most of America will be owned by foreign investors by the time our grandchildren are grown and this all takes place due to greed.:mad:
 
The unconventional reserves (oil shale, 'heavy' crude, etc.) considered we sure do. But short that and being our own provider, whether taking over the world market or not, with conventional supplies and opening up exploration for more reserves would take OPEC OUT out the picture. Becoming thier competetor AND no longer being a top customer can't help but to drop the price.
 
Is there a valid reason not to develop domestic oil reserves from the standpoint of national security in the future?

Is lowering the price of oil now some worth using up our reserves that in the future might be vital to national defense and survival?
 
The "Enron loophole" refers to unregulated electronic markets that are speculating in the price of oil and have artificially driven up the price. Rather than dealing with actual barrels of oil, they deal with virtual barrels of oil that serve to drive up the price of real oil. Big oil and big money thrive within this type of market, and this affects the oil prices outside the laws of supply and demand. The reason it is called the "Enron loophole" is that Enron chairman Ken Lay told Congress that unregulated electronic markets would be more efficient. Right now those unregulated markets are driving up prices, and since there is no transparency within that market, we have no idea what the driving force behind it is, or what kind of speculation is taking place. It is estimated that speculation makes up a quarter to a half of oil prices right now. I mean, the price of oil doesn't change by 11 bucks a day due to supply and demand, does it?
 
All in favor of federal regulation raise a hand.

Me, I'll take the free market. If some guy wants to bet his money that a barrel of oil will be worth more a few months down the road, well, good luck to him. Same with betting on soybeans or anything else. Prices don't always go up.

John
 
Enlighten us........just how are the prices of corn, soy beans and orange juice "manipulated"?
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The price of any commodity can be manipulated, I suppose by naming foodstuffs you are trying to imply that only supply and demand could effect their market price. While it might be more difficult with these items and put those attempting the manipulation in a more precarious position it can be and is done.

As far as explaining it goes, I don't care to launch into a long winded explanation of corners, squeezes, hugs, false reporting and other ways commodities markets can be and often are manipulated. These are easily located on the web.

Since however this thread is about energy prices, I will site an example that pertains to it. First let me say that is very hard to convict someone or some group of market manipulation. In order to do so these four elements of proof must be present simultaneously:
  1. That the accused had the ability to influence market prices;
  2. That the accused specifically intended to do so;
  3. That an artificial price occurred; and
  4. That the accused caused an artificial price;

In 2006 BP was charged by federal investigators with causing a 50% rise in the price of propane in early 2004 at the height of the home heating season by manipulating the market. BP managers attempted to purchase secretly nearly all the propane stored along a major Texas-New York pipeline, and then withheld its own propane from the market. This would be a classic example of a corner.

A BP trader was taped saying "In terms of whether we should do this or not, what we stand to gain is not just that we'd make money out of it, but we would know from thereafter that we can control the market at will".
 
becoming the #1 producer of oil
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Ha. We don't have anywhere near enough oil to do that.
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Heh, heh. Heh. Yes we do.

What if we become involved in a large scale war, and our enemy is able to prevent deliveries of foreign oil to the US? In 50 years, China may be able to do that. What if China simply marched a million soldiers into the middle east? What could we do?

We need our domestic oil to secure our sovereignty over the next century, not so we have extra cash in our pockets now to spend at Wal Mart.
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Yeah... about that. Let's wait till there's a war, then send the geologists and engineers to our offshore and land-based oil fields...

"Uh mister general sir. Well, we think there might be oil here but we're not quite sure. It's gonna take awhile to perform tests, and then a good while longer to lay down the infrastructure. Frankly sir, why didn't you guys allow us to explore here before SHTF? Tell you what, you hold off that invasion for 2 more years, and you'll get that oil."

milemission said:
The "Enron loophole" refers to unregulated electronic markets that are speculating in the price of oil and have artificially driven up the price.
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You have no idea how markets work. You really don't. Speculators trade commodity futures based on what they think supply will be in the future. That is, they provide a medium for the suppliers and the buyers. No speculators = lots of hoarding.

In China, where your so-called "electronic markets" are totally regulated, the price of oil has not been rising comparably to worldwide rates up until recently. Then the Chinese government jacked prices up 18% overnight to compensate for centrally-planned economy not keeping up with the real world. Overnight! I suppose you're gonna blame Enron for the mess.

Then something strange happened soon afterwards. The price of oil futures dropped 5 bucks a barrel as soon as the Chinese government made the announcement. In the speculator's mind: "well the price hike should drive down demand, thereby increasing supplies in the future, so we gotta trade oil for less." Yeah, 5 bucks is not much, but the price of oil or any commodity just doesn't change 5 bucks so fast unless something major happens.

I recently went on a trip to Vietnam, where I learned that the price of gas has doubled (doubled!) from February to May. The trickle down effect was obvious too - many goods, such food in general, have also doubled there. Did Exxon do that? Maybe it was Bush. No, no, wait. Haliburton is to blame. Especially that Cheney guy. He's so evil, he is.

Despite what you think, it's not just America. It's not just China or Vietnam. It's the whole world. Everyone, everywhere, - except for those in Dubai and such - is experiencing the crunch. The OP's rush to blame those evil greedy "racket" corporations, or hedge funders or speculators, is just, well, misinformed to the point of childishness.

Lastly, each and every one you who has some sort of retirement plan has investments in some "big oil" company, whether you realize it or not. You *want* them to succeed.

Then again, Exxon announced the other week that they were going to let go of hundreds of their gas stations because they were no longer profitable.
 
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