YSK: The Market Controls Gas Prices but the Market is Controlled by People, Part II
|Instability in the market is what these speculators try and gauge. Tell me how the situation in Iran is more stable now than it was 4 weeks ago? Has Iran ceased uranium enrichment? Are they not (in neocon wet dreams) 4 weeks closer to a nuclear weapon? The situation is exactly the same as it was then, if not worse. How about Nigeria? Will today's attack on Nigerian soldiers in an oil delta cause an uptick in the price of crude? Apparently not. The price of crude dropped almost $2 in today's trading. Oh,and how about Iraq's oil industry? Has that increased world supply lately? (Only if you count what has been smuggled out by militants and terrorists.)|
The San Francisco Chronicle has a succinct explanation:
"Deep-pocketed speculators helped fuel the steep rise in oil and natural gas prices as they pumped money into the markets for those commodities. Now they're pulling some of their money out, causing prices to plummet."
Now, does the fact that these speculators are pulling their money out now (causing prices to fall), right before the election, mean that there is a Republican led conspiracy to lull voters into a false sense of security that will result in renewed GOP control of Congress?
But it doesn't have to be led by the GOP or even be a conspiracy. It is hard to doubt that speculators would want energy industry friendly Republicans to maintain control of Congress. They are afraid that Democrats will gain control and the party will be over. Regulation will put the breaks on their oil based casino, and US policy may shift from throwing rocks at the beehive that is the Middle East to something that makes the region (and the oil markets) less volatile.
There is a much simpler explanation than a grand conspiracy that, nonetheless, leaves the GOP-controlled government to blame: unregulated speculation on energy markets artificially inflated the price of crude oil and natural gas. Why is there no regulation? Because the GOP-controlled Congress decided that energy markets were better off run by Enron. The damage has already been done and we are watching it play out laissez faire style. Hoist upon their own petard you might say.