Gas Could Fall To $2 Per Gallon If Congress Acts On Speculators: Analysts

Gas Could Fall To $2 Per Gallon If Congress Acts On Speculators: Analysts

www.marketwatch.com...

WASHINGTON (MarketWatch) -- The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.
Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

(visit the link for the full news article)


[edit on 23-6-2008 by DimensionalDetective]

HOLY SMOKES...If this is true, then we see what needs to be done in the worst way, and it needs to be done TODAY. Imagine paying $2 per gallon instead of the projected $5 by the end of the summer! This could literally save a huge portion of the economy and those suffering IMHO. Hopefully someone has the gumption to step up and put a stop to this and save this speeding trainwreck before it hits the wall...

Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.
"Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."

www.marketwatch.com...
(visit the link for the full news article)



[edit on 24-6-2008 by DimensionalDetective]

Sounds good, doubt it will happen, hope it does.
I worked for one of the richest (capitalised) international hedge funds out of Bermuda for several years. The head of the fund would routinely (once or twice per year) meet with Greenspan, the heads of Oil companies, heads of brokerage firms, heads of state of OPEC, etc. There is very little that goes on that is not coordinated by all interested parties except the consumer.
Since the collapse of the British Pound from when the Bank of England tried to take on the hedge funds and especially after they collapsed the South East asian currencies in the same fashion all governments not only cooperate with these speculators, but in fact often take advise from them.

If it went down that low, I am sorry but I will get me a gas guzzler. I just like a truck, because you sit up higher and generally have more room.

But, to the story, IF we see this happen this will me the most amazing thing that could happen. I would love to pay $2/gallon.

Why do people balk at rising oil prices when supply is flat, and demand is increasing? The same people don't think twice about news reports of high corn prices due to crop shortages. Do we disengage our brain when we talk about oil? It seems some people do. Can Congress tell OPEC what prices to sell their oil at? I somehow doubt it. If the U.S. refuses to buy oil at $130 a barrel, then someone else will probably buy it.

This stinks fishy to me.

Its up to congress? When congress does not do anything, it will be the Democrats fault...those evil Democrats will take all the heat making McCain the frontrunner? I swear they play good cop, bad cop. That's all they're doing.
I wouldnt get too excited about this one, imo.

Hey DD, you might wanna fix your news link, it is stretching the page!

What I see here is a 'litmus test' which will ultimately show us where congress actually stands. Failure to act will indicate complicity in driving our economy deeper into turmoil. Acting swiftly and decisively will show us that they are not as morally bankrupt and corrupted as they appear.

Personally, I do not think they will act to regulate the speculation, they have had plenty of time and knowledge to take such steps and thus far have done very little.

reply to post by dbates


As people don't buy large supplies of food, their perception is minimized. If they had to put fifteen gallons of soy beans every time they fill up their car, I'm pretty sure they would be more conscious of the price of soy futures, no?

Back in the days when gas was a buck a gallon and then gradually went up to $2 a gallon people would piss and moan about having to pay two dollars a gallon.
I said at the time that one day you'll all be happy if only gas could be $2
a gallon. You'd give anything to pay two dollars a gallon.
Looks like I was right.
Two dollars per gallon my @$$.
I won't be happy 'till gas is where it should be. $1 per gallon.
Anymore than that and I will always feel like I am getting screwed.

Well, if this happens (both the Congressional action and the resulting price collapse) I'm going to make a thread linking to all of the times I have posted that this was the problem and the solution. I've been harping on this for a couple of months now and it's very ego stroking to see some industry experts telling Congress the same things.

Do you all really think we will ever see $2 a gas ever again?

Only if we discover much more than we already have, or if China and India suddenly stop using the black stuff.

The only way oil will EVER have a fair market value is when a real and viable alternative enters the market, gets real traction in the market and STAYS in the market. Oil is still the monopoly and until alternative sources gives oil a run, you can count on the speculators to keep inflating the demand curve. Someday I hope the bubble bursts on these nose picking speculators.

[edit on 23-6-2008 by solarstorm]

reply to post by dbates


But it seems to me that you are ignoring the fact that it is speculation what is driving the price of oil this high. Many analyst agree that if speculators were to be banned from the oil futures market the price of the gallon would drop back to what the fundamentals of the maket dictates which is arouns 2 dollars a gallon.

So they are basically saying thats speculators are doubling the price which is clear to me that this is whats going on. In my opinion speculators are a pest and they need to be regulated because they move from section to section of the indexes and cause all kinds of troubles for the economy.

They had a hand in the dot.com bubble, they had a hand in the housing bubble, they are creating a bubble in the oil market and since they know that their days are numbered there they are already moving to the food sectors of the market and undoubtedly creating chaos there as well.

I dont have a problem with people making money at all, but when it is a the expense of bracking the backs of others then I have a problem with that. This has gone really out of hand and its time for the laws to adjust to the times we are living.

[edit on 23-6-2008 by Bunch]

The last word I heard was the speculators theory is being denied.
Duh, what could it be.

Rockefeller knows where the ships are and where they are going.
What is the guess work.

More Illuminati news that tells us nothing.
More than doubling crude prices in less than a year (? don't rightly know
but feels like it) might be to offset the hybrid car introduction.
Can't say for sure the one year gas increase but say $1.50 up from
$2.50 might be close and is 60%.

It might be that mixing water in with additives has reached its limits
because gas company stock boards are asking about the crude to
gas ratio. That would be some conspiracy if we have been getting
water gas all these years.

reply to post by Bunch


There is a lack of understanding of how speculators work. When congress speaks of "speculators" what they are really talking about is international hedge funds like the Quantum fund and others.
hedge funds
A lot of these hedge funds often act in unison if it is to their advantage. Out of reach of the SEC they can/will conspire to "attack" a specific market/currency/commodity so that the cumulative sum (tens of billions) of the position they take will "move" the markets in the direction they have hedged.
You can be sure that if the price of oil drops significantly, it will be much as a result of them already having taken "short" positions. No governments monetary policy can preempt this dynamic as it will always move at a much slower pace than the funds' ability to change positions.

reply to post by schrodingers dog


The problem with what you have said is that all this speculator acting like you said in unison are piling on one side of the market, even George Soros warned about this. This has happen before like I said earlier, when all the investors no matter were they come from, hedge funds, pension plan, financial institutions bet on one side of the market it creates a bubble.

Thats whats happenning now with oil or do you think these guys were going to seat idle and swallow all the losses from the housing market crash that by the way they help to create, jeez they have not even recovered from the dot.com bubble!

All im saying its that it needs to be regulated specially in the sectors of the markets that are so important to the regular folk, like the energy and food sectors.

reply to post by Bunch


I was actually agreeing with you.
But I think you will find that there's very little the US government can do about it.
Most of these funds will not take a single dollar from a US citizen or resident, thus avoiding any jurisdiction from the US. And in this case crude futures are traded on many international markets so they never come near US markets.

reply to post by schrodingers dog


Yeah I got to agree with you that its going to be hard to regulated but I stiil think that the U.S. still has some leverage and a big one, that been that we are the world largest consumer, so if they want to play here, they are going to have to abide by our rules here, or at least some of them.

Think about it if they were afraid of regulation they would have moved their operations completely to international markets already.

Originally posted by Bunch
reply to post by schrodingers dog

 

Yeah I got to agree with you that its going to be hard to regulated but I stiil think that the U.S. still has some leverage and a big one, that been that we are the world largest consumer, so if they want to play here, they are going to have to abide by our rules here, or at least some of them.

Think about it if they were afraid of regulation they would have moved their operations completely to international markets already.

Well, these hedge funds have always been international, and as far as leverage I remember when the head of the Bank of England with the British finance minister came out and said something to the affect "we're the bank of england who do these funds think they are" just before the collapse of the pound.
The only regulations that the US government can change is when these funds invest with US capitalized brokerage firms. Then the gov could go after these firms and accounts. Keep in mind these are the richest bankers in the US with many friends in this government so how likely is that to happen? It is more likely that these congressmen are just blowing smoke for votes in an election year towards the villain du jour.