Who Exactly Are These Oil Speculators Driving Up Gas Prices?

I heard a couple names Warren Buffett ( Obamas biggest campaign investor) And Bill Gates are involved in this Speculation of OIL! Don't they have ENOUGH MONEY! Do you know anymore names? They will make HUGE Profits while us poor people suffer.Who Exactly Are These Oil Speculators Driving Up Gas Prices?
I listen to the Oil CEO's testifying in Congress last month May, 2008.... and they all lied that





1. Demands are now low





2. Supplies are now high .... about 3% increase





3. It cost about $10 to make a barrel of oil but trade on Wall Street for $130 a barrel





4. All the oil refineries are only operating at a 80% - 50% capacity because we already have too much oil





5. The US is currently the #3 largest producer of oil in the world.... we sell our extra oils to Japan





6. Plenty of oils right here in the USA =





June 22nd, 2008





The U.S. Geological Survey just published its official results of a groundbreaking study.





Its report confirmed a massive oil reserve in an area the locals have nicknamed the ';Bakken,'; which stretches across North Dakota, Montana and southeastern Saskatchewan.


The new USGS study estimates a whopping 3.65 billion barrels of oil in the Bakken...





The reported 3.65 billion barrels of oil mean estimate is for 'undiscovered' oil only, and doesn't include known oil, such as reserves.





In fact, the study reports a 25-fold increase in the amount of oil that can be recovered... compared to the agency's estimate back in 1995.





Discovered over 50 years ago, the Bakken deposit--once impossible to extract--is now being hailed as the single largest oil find in US history.





That's because, today, thanks to breakthrough drilling techniques like horizontal drilling, the Bakken's oil shales can be extracted relatively cheaply.





When that happens, this light, sweet oil will cost Americans just $16 per barrel! and trade on Wall Street for $130-$140 a barrelWho Exactly Are These Oil Speculators Driving Up Gas Prices?
Capitalism is like democracy.





Speculators are just the people who vote





on what the plan of the economy is.


Investors, although it may seem like a Las Vegas casino, are really just the managers of the direction of an economic system. Survival-of-the-fittest is like a religion. Humans want to live like sharks in a shark tank.
soros owns about 1/3 of halliburton.and yes you are right.but the republicans are just as dirty here.everyone is trying to make a buck! the problem is you need to force the speculators to store the oil they hedge.and also make them put up 50% in cash instead of 10% on credit,do this and you will see 2.50 overnight!
Airlines, Truck lines, Package delivery companies speculate to lower their risk of financial harm when prices rise. They do this to protect themselves.
Mostly pension fund holders.
All of us with a 401K. Primarily the teachers union.
Speculators perform a function in a commodities market - they generally take the opposite position of people in the industry who want to hedge their exposure to price changes.





Thus they enable the heating oil dealer to hedge his fixed price volume, which is what enables the dealer to offer fixed prices, which is what enables homeowners to fix their heating bills.





Generally, volatility DECREASES with volume. So, the problem isn't speculators generally, bad behavior among speculators (such bad behavior exists but it is not what causes global commodity bubbles), or even the amount of speculation, all other things being equal (because there is a short position for every long position).





The problem is with the supply of money and credit.





All hedging and speculating is done on margin - short term credit. Short term rates are ultimately a function of the cost of funds - the federal funds rate. When the Fed drops the federal funds rate aggressively, the differential between the cost of funds and the future value of a comodity increases. The speculators aren't deliberately trying to rig prices nor can they on a global scale - they're following their analysts' spreadsheets that compare the cost of funds to the future value of the commodity, and as noted above, that differential grows when the Fed aggressively cuts rates. This causes more money to flow into long positions, continuing to drive up the price of the commodity. If the Fed wishes to maintain the low cost of funds, it pours more liquidity into the market - thus the differential only grows, causing more money to flow into long positions, growing the differential further, etc......





That's the anatomy of a commodity bubble.





Right now the commodity is oil.





We've seen this with natural gas a few years ago, with metals, and with housing - that's a complex analysis but in the end, it too was a bubble.





I'm not suggesting that supply and demand issues shouldn't cause a price increase, just not a bubble like this. Generally the asset bubbles do occur with assets that were somewhat undervalued to begin with (natural gas, metals and housing are also examples) - - but they magnify the supply-demand picture dramatically.





Oil should be at $70/bbl and gasoline just under $3.00/gallon. If the Fed were to raise the Federal Funds Rate to 4.00% from 2.00% that's where prices would go. You'd be told on CNN that it would be the result of softer demand as a result of a slowing economy as a result of the rate hikes, but that's not true - what it would be is the traders no longer having an arbitrage because the gap between the cost of funds and the future value of the commodity would have closed.





Experts think the Fed will ';stay on the sidelines'; this time around and not raise rates - but the Fed is not on the sidelines. The Fed is busy tilting the entire field.