OT: Hey Jeff....pay attention.

The high oil prices are being driven up because of demand and lack of supply... as well as witholding our own resources from drilling.

There is "speculation" on "speculation," but that hardly makes it fact. Even if it is fact it is a minor part of the equation.

So technically Jeff is correct.

Speculation on speculation?

Are you saying it doesn't exist? Or are you saying it's not possible to quantify its effect on the price of oil?

This is the biggest problem. Look ad Venezuela...$0.12/Gallon. Not the best example since the oil company is owned by the gov't, but even with some greedy profiteering our own oil would cost considerably less than buying it mostly from people that hate us.

Question of the day: who supplies the most oil/gasoline to the US? (Foreign source, that is...)

I said if it does exist it is not as powerful as supply and demand, and is a non-issue.

Even your link pretty much says that.

In the article, which paragraph "says that"?

Keep in mind that at the moment, the phrase "supply and demand" falls into the same category as:

"cut & run" "this young democracy" "stay the course"

....and other phrases that are easily digestible by the masses.

"supply & demand" - nice & easy.

Speculation: Hard to quantify, hard to win debates if you can't quantify it.

Venezuela can pick the oil off the ground in a 5 mile radius and take it to a refinery 2.5 miles away. A refinery that is state owned. Furthermore 12 cents in Venezuela is not like 12 cents in America and the demand in Venezuela considering the quality of life is rather low. Also, Venezuela suplements its own usage much like a crackdealer who smokes his own product. It's not a good comparison.

Soros says in the article that his belief in speculation would only equate to a percentage of the cost in oil. He is the believer.

The facts are that we are burning gas and energy supplies like no tomorrow. Do you deny that?

If you do not deny that then you have to believe in supply and demand.

Let's look at it this way. Saudi Arabia and UAE are not building incredible resort towns for no reason. They realize the spickets are about to run dry.

I don't deny it, but you have no choice to agree that the price increase is absolutely out of proportion to increased demand.

I'll have to look up "spickets" so we can discuss that point further.

Meanwhile:

Two parties make money when hedge funds and other investors trade oil commodities. One is the investor or fund, assuming they guess right. Do you know who the other party is? Who else makes money, and might prefer that we NOT impose tighter regulations on trading oil commodities?

I believe the key is drilling it at home while we turn the page. I believe OPEC has more power than you realize, as well.

Yeah, I knew that! ;)

Two parties make money when hedge funds and other investors trade oil commodities. One is the investor or fund, assuming they guess right. Do you know who the other party is? Who else makes money, and might prefer that we NOT impose tighter regulations on trading oil commodities?

I never said speculation isn't a problem, only that you were unable to demonstrate it is.

It looks like speculation is one problem causing the price of crude oil to go up, however.

Jeff

Actually, the crude oil market was deregulated. And there are real problems with the market, like people being able to use leverage to buy oil futures, multiplying both their ability to buy futures and their ability to lose money. Some people are saying that about $40 of the cost of a barrel of oil is due to speculation, which means that without it oil would cost $87 instead of $127.

However, as the cost of discovering new oil reserves and getting the oil out goes up, the cost of oil will continue to go up.

Jeff

It isn't the biggest problem. The US supplies are only a small portion of the world supplies.

Subsidized by the gov't.

The people who sell us the oil don't care whether or not they hate us. They only care about the price of crude oil on the market. If they love us, they still charge the same amount.

Canada.

At least two other parties: The broker who does the actual trade and the oil companies, who sell the oil for more money.

Think harder. Party #2 is less obvious, but may have more influence than anyone in keeping the law from changing.

Well done Jeff!

I read your response too quickly last night. "Broker" was the answer, or more correctly, "brokerage". The firms which process electronic trades have a cash cow so generous that they'll resist regulation forever. They will use lobbyists and misinformation to whatever extent necessary to achieve their goal.

Fine (that last comment). At least that cost is real. I have no problem with that.