UALjan15
Uniform Swapper
- Joined
- Dec 13, 2002
- Posts
- 257
However, other witnesses said that pure speculators have had little impact on energy prices, which have doubled in the past year to about $135 per barrel. Both Treasury Secretary Henry Paulson and Energy Secretary Samuel Bodman have dismissed the impact of speculators on prices paid by consumers.
Speculators now account for about 70% of all benchmark crude trading on the New York Mercantile Exchange, up from 37% in 2000, said Rep. Bart Stupak, D-Mich., chairman of the investigations subcommittee. Stupak introduced a bill on Friday that would limit index speculation.
There has been much discussion recently about how big a role speculators have been playing in the sharp rise in energy prices, though no consensus has emerged on this point.
Bye Bye--General Lee
OK, so we really don't know for sure how much affect speculation has had. Here's one quick way to find out that doesn't require an act of congress: Open up the strategic oil reserves in a major way. Flood the market with oversupply for a bit, and watch the price of oil. My thoughts are that we're seeing an investment bubble, just like others we've seen. All we need to do to pop this bubble is to reverse, even temporarily, the momentum that has been established over the past year. After the oil speculators get caught in an oil-price freefall and lose their a$$, maybe they'll go onto the next big thing. We just need to keep the oversupply going for a couple of options periods and we'll see them scurrying like roaches under a flashlight.
If it doesn't work, we haven't done anything irreversible, and there's a pretty good chance it might help. I say "bombs away" on the ICE!