Many Americans look for political manipulation as gasoline prices plunge
WASHINGTON — There is no mystery or manipulation behind the recent fall in gasoline prices, analysts say. Try telling that to many. motorists. Almost half of Americans believe the plunge at the pump has more to do with politics and the November elections, than economics….According to a new Gallup poll, 42% of respondents agreed with the statement that the Bush administration “deliberately manipulated the price of gasoline so that it would decrease before this fall’s elections.” Fifty-three percent of those surveyed did not believe the conspiracy theory; 5% said they had no opinion. Not surprising, almost two-thirds of those who suspect President Bush intervened to bring down energy prices before Election Day are registered Democrats, according to Gallup.
I’m certainly not about to complain about gasoline prices dropping by close to a third, but given the current Administration’s “win at all costs” philosophy and the fact that the midterm elections are just over a month away, the coincidence is just a bit too much too ignore. And is it in fact a coincidence? Or is it something more sinister?
There are many like me, just cynical enough to that there’s no such thing as coincidence where Republicans and elections are concerned. These are the same ciriminals who stole the 2000 Presidential election and quite possibly 2004 as well. To think that they wouldn’t also stoop to manipulating gasoline prices in order to keep themselves in control of Congress would be naive in the extreme. It could be happening, and to think that Our Glorious and Benevolent Leader and his neocon thugs are above this sort of skullduggery would involve a willing suspension of disbelief of almost unprecedented proportions.
There is, of course, no hard evidence to indicate any sort of political manipulation of gasoline prices. It’s no secret, though, that lower gas prices can only help Republicans in their efforts to maintain control of Congress. So would Our Glorious and Benevolent Leader and his friends in the Oil Bidness stoop to manipulatiing the market? I don’t know; but given what’s transpired over the past five-plus years, it’s no idle question. The criminals and thugs currently in power have shown themselves only too willing to engage in virtually any sort of behavior that will further their agenda and tighten their grip on power.
So, are Republicans and their friend in the Oil Bidness complicit in the manipulation of gasoline prices for political gain? One has to wonder…and it looks as if many Americans are.
Oh, I don't put it past them either, but the facts are that this theorizing is pretty ridiculous and contrary to recent price history, which anyone can look up.
To wit: first, we note that US oil companies have little to no control over global crude oil spot prices. (News to the GOP, but the US is not the world.) Second, note that they do presumably have control over the crack spread (value of distillates like gasoline minus price of crude), which is much more local. Now, finally we note that the crack spread actually went down first, then went back up before the election. That is, *the part the US companies control has actually gone the reverse* of these conspiracy theories.
Oh well. Another beautiful theory blown up by reality.
There are plenty of plain facts damning the GOP...no fantasy need be added.
Funny, though, how the rationale for the price run-up before the summer was that ethanol-based fuels were being supplied and it caused a shortage of gasoline. Well, now that they should be swapping out the summer fuels for the winter fuels, why isn't there the same pressure on supplies and consequential increase in prices? Hmmmmmm.
When prices jump back up following the elections, maybe people will start to wise up to the easily manipulated petroleum "markets".
Yes, we've all heard how hard it is for US companies to control the spot oil price in international markets and that unknown "speculators" are largely responsible for driving up the prices. My problem is that I just can't seem to get it out of my mind that Cheney and Bush are both oil men. Check out Bush's history with his own failed oil companies. It's pretty well documented that he bet his company's financial future on $80 barrel prices some years ago. He was a tad too early in his speculation, but not for the lack of trying. And not let us forget that our energy policy, crafted by Cheney's secret task force, was developed largely by, gasp, oil companies. As I have said before, sometimes the easy and obvious answer is often the correct one. But let me borrow a line from the Republican playbook. Karl Rove was quoted once as saying "we make our own reality". So the fact that most Americans believe a conspiracy is a reality should not come as a surprise to Republicans.
It's not speculators, and it's not the oil companies. It's the sum total of everyone's expectations of oil price/supply/demand. Everyone's expectations are pretty fallible and sometimes emotional and tend to overshoot as recently--but that doesn't make them speculators. I'm thinking of the buyers that matter in a big way, e.g., airline fuel contracts, decisions on refinery throughput, utility needs (which are hard enough to forecast in the US, forget it in China, etc).
Plus, Halliburton for example don't decide how much oil comes out of Saudi Arabia--the Saudis do. (Halliburton's too busy getting people killed in Iraq.)
Such conspiracy theories are distractions from the real dangers. We should concentrate on battering the GOP/Fascist Party into less relevance than Bull Moose Party.
I'm sorry, maybe I don't understand marketplace terminology. Bidding up the price of oil futures isn't considered "speculating"?
No, actually they aren't, not when they actually plan to use the oil. Whereas speculators have no intention of storing and using the oil, rather of flipping it like condos. Most speculators couldn't even take physical possession of the oil if they had to. The two buyers are very different creatures.
Said another way, if you bid the price up because you really need the oil (as airlines, utilities, etc), you may do it cleverly but you still aren't a speculator. But if you bid the price up (or down) because you want short-term cash and don't care which commodity you trade to make the cash, that is you have no intention of using what you've bought, you are indeed a speculator. Users tend to have longer-term price impact than speculators.
Speculators can drive the price up even for a few months, BUT if the underlying real demand is not there, the most leveraged holders get squashed and have to dump or else, and the price undergoes a sudden crash. See natural gas over the past few months. I don't know if the current price of say $5 is real, but it sure looks like last spring's $16 wasn't. The bid-up speculators got annhilated and had little long-term effect.
And then there's hedging, which is a weird blend of the two, in which buyers try to minimize future price risk by judicious future contracting or even trading. In that form it's not really speculation (since it is designed to *decrease* risk, rather than to get paid for taking higher risk). It's true hedging can escalate to speculation (a la Barings), and speculation can even be disguised as hedging (a la Enron). Still, it's useful to distinguish at least the archetypes--"real" buyers with physical demand vs. speculators--to keep one's self oriented.