Oil be devastated

Amid new concerns in the Middle East, the less than spectacular Home Sales Report, and the Fed Chairman's comments that things would remain the same in the loan interest markets, oil prices have increased yet again.  Of course, there are those still sitting around thinking this is a good thing, that the larger prices will produce more jobs and the economy will not only survive with the higher prices, but will in fact excel.
And these guys get paid a large amount to blow smoke up your fourth point of contact (your rear for those non-military).
While, as I stated in previous posts, there are those who are finally starting to show concern that the increase in oil prices will deflate the struggling global economies, it is only a mild concern, and most think that we will weather this just fine.  But here are some figures, about a year ago we were paying about two and a half bucks, now we are paying nearly four per gallon.  This is a 60% increase in gasoline prices in just over a year.  Considering that our economy is based partly on the transport of the consumables, the truckers must charge more to move the items, which means the stores must charge more.  While the increase in fuel prices in relation to the transport of goods would spread out, the rate of inflation would increase at unhealthy leaps.
Of course, I am not telling anyone anything they haven't already noticed.  Anyone who has shopped for groceries in the last six months can see the difference in the amount of bags they bring home.  Two hundred dollars does not buy nearly as much as it did a year ago.  The military was awarded a 1.5% pay raise this last year, yet their pay goes only about 70% as far considering the fuel prices and the increase in food.  So if my purchasing power decreased by around 30% in just over a year then how is this unjust increase in oil something that is GOOD for the economy?
Remember, before all you naysayers take my numbers above and try to discredit them, First I am using generalizations, but I am also including such things as the increase in utilities cost due to the increase in fuel prices.  You didn't think these companies who make entirely TOO MUCH money from us consumers would actually absorb the costs did you?  Look at what your check gets you today.  I guarantee other companies are beginning to feel the pinch yet again as consumers must choose necessity over pleasure.  One of the first things to go in this household is the cable.  Ironically, I have more channels (shows) available online than with cable, so the only thing I am missing is the high prices.
Eventually, these price boosters are going to realize they are hurting themselves and the prices will drop to more manageable rates, or we will definitely be deep into another recession and whether you believe it or not, there is little political ramifications that would be honest.
The only way to prevent this is to actually decrease our dependence to the point that the amounts in reserve make it not nearly as profitable, of course this would mean that we would have to start using alternative means of transport, so while the thought is nice, the reality is, we are slave to the jackasses trading the commodity and using price gouging techniques to cripple the world.

Economists say Gas may drive us into another recession

As the rhetoric changes on all the economists about the gas prices and the likelihood we will end up back in a recession, I say, you guys are two years too late.  I have been saying it for quite some time, and have been posting about it here for nearly a month.  The thought is ridiculous that NOW the high prices are going to effect the economy.  Other economists are wondering why demand is down. 
Duh!
Americans can't afford to drive!
This is going to kill the economy because they can't get out and get a job to pay for the food on the table, let alone vacation. 
What you will see is more local economies actually surviving, not really thriving, but surviving because people will realize that $2 loaf of bread and the sorts winds up being cheaper than driving 20 miles to the local big chain store, or even five miles for some.  This means that those local grocers that have been struggling for years may actually benefit.  However, they must in turn pay more for fuel and ultimately raise their prices, so it will be a short lived honeymoon.  I also believe you will see more people growing at least a portion of their food, this will decrease a little of their overall grocery expense.  Hell, one tomato plant at 7 bucks and a lot of patience will ultimately yield at least thirty bucks of tomato if the person does even halfway good at it. 
Might effect the economy?  Might put us in a recession?  Please, we are already heading there again, the only thing keeping the fancy numbers going up is the prices of gas and new electronics.  Apple is still going strong.
All anyone has to really do is look at the bulk stores and see how much their sales increase or decrease, and you will get an idea of the recession likelihood.
The fact is, with gas going up, our spending power goes down, the economy will tank unless something changes, and there is nothing anyone can say about it otherwise.  If you decrease the amount gas costs you will promote tourism and increase jobs as the rich folk feel they can dive a little more into their pockets to hire some out-of-work guy or gal.
I would love to meet these economists so I can let them know how SLOW they are to come to terms.  I am all for the uppity keep it cheerful outlook, but reality should have set in with these folks a long time ago.

China, Saudi, Iran etc.

So oil is being jockeyed by folks who are doing nothing by speculating about what might be instead of what will be or what is.  All the while it is lining the pockets of the rich, feeding those middle class citizens fortunate to have bought in at the right time and disabling the rest of us.  I mean, 90 bucks to fill my tank four times a month adds up, and that is just to work.  I have another means of transport but can't ride in the rain.  I am fortunate that as the weather gets better I can use my electric scooter, but many folks cannot or do not have the means to do this.  While I will feel alleviated by the lesser expense, it makes it difficult to do any extracurricular activities, which is part of what drives the economy, vacations. 
With my boat dry-docked and my truck tank empty, which is most likely similar scenarios to much of the US, I must seek local means to vacation, such as back-yard play.  A time when most people are trying to get out and do things, a time when many businesses are waiting for to make their months go by in the black, will undoubtedly be soiled by a bunch of greedy speculators. 
Yet the news points out that China's economy IS slowing, Saudi has said that they will increase their production to 12.5 Mill barrels to cover Iran, and Kuwait has stated that Iran WILL NOT block the waterways.  This should alleviate the panic over oil, yet it hasn't.  And CNNMoney has the audacity to state that Index traders have nothing to do with the oil prices being elevated, citing that if they were, the stockpiles would increase.  The author of the article (which can be found here http://finance.yahoo.com/news/speculators-not-behind-rising-oil-152600223.html) Craig Pirrong, used several points in commodities history where groups elevated prices, stating that those individuals wound up with large quantities of those commodities, from tin to grain and milk, that no one would buy.  But his comparison is about as relevant to oil as my desk is to his computer, no real connection.
Oil, as a commodity, much like natural gas, enjoys a unique advantage over all other commodities, it will always be bought and sold, no matter the price.  It is the lifeblood of the world and is what makes our modern luxuries possible.  While we are making efforts to create a world where oil is not this riches producing substance, that time is far off. 
No matter what happens to the oil, we must go to work, which means we must buy gas.  We must heat our homes, which means we either buy heating oil/natural gas, or we use electricity, which burns oil, or coal, or natural gas.  The complexity of oil, the amount of products we get from it and use daily, means it doesn't follow the same guidelines as wheat and tin.  The fact that the author of that article is working as a monetary "expert" shows the lack of knowledge his employers have in his true ability.  I will tell you these are all my opinions; he will tell you they are fact. 
Fact is, the items posted in the article, the comparisons he uses, display incoherent thought when it comes to financial matters.
The speculators are one of several DIRECT causes of the oil prices sky-rocketing, just one of a few, another being the OPEC and their drive to increase the oil so they get even richer.  People stated that the War in Iraq was about oil, yet, where are the oil prices at?  Perhaps it was about oil; perhaps it was about something else entirely.  Who knows, maybe there really are WMDs that just haven't been located.  What I know is that if it was about oil like so many were saying, we wouldn't be paying nearly four bucks a gallon right now. 
The world needs to get the oil under control before we enter into another recession, or before the average Joe just says F* it and we enter another GREAT depression.

Perfect Plan for Oil

I have it, right here, the perfect plan to fix the world's economy.
Stop trading oil like it was the Dollar or Yen.  Set a price and keep it there, but a reasonable price for everyone.  Obviously $40 a barrel isn't going to work, but neither is 90 or $100.  However, I think $65 a barrel should suffice.  It would dramatically lower the cost of fuel, help to stave off inflation, make it so persons could get back and forth to work, create an environment where those who needed work could actually go to interviews, make the rich moguls not so quick to fire people and make it so more people could buy goods.  Not just here in the good old USofA, but worldwide.  Greece could pay their debts, Spain, Italy and Portugal would be able to use their cuts to stave off further Euro issues.  All in all it would create a much better environment for people to live in. 
But wait, that would mean keeping the greedy bastards from getting richer from the suffering that we all must endure.  This would mean that no longer could some jackass sell his commodity share at an inflated price simply because he anticipates increase in demand (price gouging, ahem).
This would mean that the world would have to stand up to OPEC and say "look, this is what we are going to give you, with the allowance for a potential annual increase at inflation".
I'm ready to stand, Are you?

Governments are Beginning to Realize the Dangers of High Fuel Prices

In a move which seems to point towards key governments realizing that continued oil price increases will deflate the minimal improvement and perhaps derail the entire global recovery.  MSNBC posted an article this morning pointing out that it is expected the US will request that Great Britain release strategic reserves of oil in tandem with the US to stem the incredible increase.  It is also expected the US will request the same from other countries, although it is pointed out that many countries disagree with the release and site it should only be used in conjunction with a severe supply disruption.
Ok, while this seems like a good thing, we must understand that the increase in price is based on greedy speculators.  These folks assume the summer months will increase demand in the US and around the northern hemisphere.  They also assume that the Iranian embargo will greatly cut supplies.  Again I point towards price gouging, but economists repeatedly state their is none.  I think the big oil has the economists in their back pocket. 
Regardless of their reasoning, be it political or just because they are good guys, The release of strategic reserves will ultimately drop the prices for a minute or two.  As there is only so much in reserve, it will only hasten continued increase in prices based around greed.  I think it is time we consider price control and punishment for those who use greed tactics. 
The amazing thing is, all of these companies, Chevron, BP, etc. all try to deflate the anger by publishing documents which show us how the price of gasoline is affected and why it is costing so much.  Yet they never say how much profit they bring in annually.  If oil costs more, they can disguise their greed by inching the prices up, and then when the oil price falls they can lower the price of gasoline per gallon at a much slower rate, ensuring their increase in profits regardless of the situation.  It is ridiculous for a fuel company to bring in Billions of dollars in PROFIT annually.  Oh sure, they are going to say that they put it back into research and the sort, but when their CEO makes $2 Million in cash and another $20 Million in stocks and bonuses (this is 2008 by the way) it begs to question how much of that profit is steered into executives?  We know these numbers are inaccurate and blurred as well so that the public can't quite get a grip on the reality of the situation. 
Bottom line is this, we can release the strategic reserves to give us a temporary relief at the  pump, but if we don't start regulating what these companies can charge, and do something as Radical as taking oil off the open trading market, then we will always be subject to this insane price for oil. 
Hell, maybe I should start using fermented seaweed instead.

Kuwaiti Oil Minister is Concerned

In an article published on UPI.com, it states how the Kuwaiti oil minister is concerned about the price of oil.  His statements go on to say essentially, there is more than enough oil to meet demands and that the tensions in the Middle East (Iran) were partly to blame, but that $100 per barrel was more reasonable. 
While I disagree with the amount he states, (I think more like $70 tops) the article goes on further to state that analysts are concerned that oil prices threaten the global recovery.
Duh!
I have been saying this for the last few years, and a the entire blog here is about that fact.  With the rising greed associated with oil, we cannot bring ourselves out of this recession completely, and may in fact put ourselves back into it.  While the oil prices might not have caused the recession, it damn sure made it worse and has harkened longer than expected recovery times.  These times with persons out of work and seeking new employment hampered with the inability to put gas in their vehicles to go to interviews.  That, or they could forgo the food needed to keep their families healthy.
And then the other issue, is it the Rich who are bearing the brunt of this increased amount of help that is required by these persons?  No. 
President Obama has touted this simple fact.  The rich need to pay their fair share.  Something brought up by Warren Buffett.  It isn't a monetary issue, it is a percentage.  If the normal wage earners are expected to pay this percent, then so be it the rich should pay the same percent, scaled to represent their wages.  It comes down to why does an Oil Barren only pay a certain amount of taxes and then can breathe amongst is millions of annual income, while the person who makes 60K has to sweat it out because their pay was cut by 20%?  Hell, that is only federal, most have to pay state taxes as well.
The fact remains, drop the oil prices, stop being greedy bastards, or the economy is going to tank yet again.

Central Bank has an odd decision to make

The federal dinanciers will be meeting to decide how they are going to work with the current recovery of the economy.  http://money.msn.com/market-news/post.aspx?post=ead68a86-b853-4caa-a1ea-5541db065c2c reads that they will likely then decide how to work with the inflation rate that (what they don't say) is likely to be explosive yet again based on gas prices. 
So how can the Central Bank do anything when lowering the interest rates hurts the government yet raising the interest rates hurts the economy because greedy ba*terds will take it as a dign to sell sell sell, of course the whole time oil prices will likely skyrocket, because, if Greece is any consideration, when in trouble, raise the price of the one thing everyone needs...Again with price gouging, but that was a previous post. 
So here is what I would do in their position.  exactly what they intend to do, nothing.  The interest rates will remain unchanged and they will propose the next quarterly meeting results ahead of time to ease worries and frustration, then they will most likely issue a warning statement to the highers that continued increase in oil prices will lead to greater inflation and lower value of the American Dollar.  Ahh, yes, if we tank, prices go even higher, the one thing everyone seems to be avoiding.

Irony?

So, here is the thing, if the jobs report comes out strong, saying that many more jobs were created than what was expected, this means we should raise the price of oil by greed trading?  Oh, wait, Greece figures out a way to keep from TOTAL default, even though it still technically is a default, this is a reason to raise oil prices?  So by this strategy, when people are just starting to pick themselves up, we should kick them harder?  What, is this so that they will become stronger for it in the end?  While this may work for a combatant or a boxer, it doesn't bode well for the economy

Candidates Make False Promises

It is amazing what politicians will say or do to get elected.  Of course, one of the hottest topics right now is the gas prices, everyone knows they are ridiculous, everyone knows they are inflated because of profit mongers.  No one wants to accept blame or place it where it truly lay.  Instead, all of the politicians want to blame the other politician.
Here is a simple truth, the President can do little to affect the price of Gasoline.  Sure, he can PROPOSE changes to how we acquire oil, but the CONGRESS has to approve it or vote against it.  He can set in motion certain things that will change small portions of this, yet he cannot do anything directly.  So, when the Republicans are touting that President Obama has not done enough to change things, they are really saying "We haven't voted for any of his policies and as such we have helped to raise the price of Gasoline".  Ironically, many of the politicians have money tied in oil. 
Furthermore, when President Obama states that he has affected the amount of oil extracted from our nations soil, he actually leaves off the part that most of this increase comes from policies set in play before he was elected. 
Even better, any policies that produce more oil or use things like the Keystone pipeline, if they make oil cheaper at all (most will raise the prices because of manufacturing expenses) it will be a long time before we see the change.
Ultimately, about the only sure way to drop the prices is to FORCE the companies who mine, refine, and distribute the fuel to stop padding their executives pockets to the tune of hundreds of millions a year. 
If the profit base for the company is in the Billions annually, then perhaps the company is gouging!
as I said in a previous post, price gouging is rampant and all the worlds governments are letting it happen.
If the politicians want to make claims that would makes sense, then tell us voters that you are going to seek controls for these oil companies and how much they can actually pay their people. I know, many will claim that my idea is socialistic, but I say if the company doesn't play fair then they need to be punished.

Greece Will Not Fail, Lets Raise the Price of Oil!

So, because Greece will avoid a default, yet again, all of the people on the trades floor decide we should raise oil prices yet again!!!  Oh, yeah, and the Iran Supreme Leader says talks of Sanctions are delusional is another reason to raise crude prices.
Now economists are starting to debate whether the oil prices will cause issues with the economy, both world and national, with some arguing that we will be fine because we have handled $100 plus barrel prices before and made it through.
What they forget is, we didn't survive very well when the oil prices were there, businesses faltered, many had to cut costs so the greedy little bastards in charge of it could continue to earn millions annualy.  Of course, this meant cutting jobs so the hard working men and woman who need the pay could suffer and not afford food or water...
Yeah, raise the prices and we will make it through just fine.

Price Gouging

The arguement has been made that Oil Companies and the like are not price gouging, yet by definition, those who seek to purchase th stocks in the stock/commodities exchange are doing the exact definition.  Recently stated are the expectations that the improving (barely) economy of the United States should bring about more demand for oil, which is why traders are driving the prices higher.  By definition raising the price of ESSENTIAL goods to profit from expected increase in demand is price gouging or profiteering.  So, with record profits for the oil companies, thousands getting rich from the exchanges, how is it not profiteering?  I think these people are going to find themselves in trouble later when they didn't get what they wanted out of the oil as people begin to pull drastic measures, up to and including walking.

AFPM tells congress high crude price equals high gas prices

This is about the most bonehead waste of time I have ever read out of all these congressional meetings.  Everybody knows if crude goes up that gas goes up.  Further in the article he states that "Oil prices have risen recently because of concerns about the future of Iranian oil production" and that refineries don't set prices any more than steel manufacturers do for the commonly used metals.
Yet later he breaks down what it essentially costs for transportation, refining, etc.  Equating out to just over a dollar, even after taxes, yet our pumps still read well over $3.50.  So by his count the stores are making over two bucks per gallon profit.  Seriously? 
We all know that the wonderful people on the trading floor are jacking the prices up to make themselves even richer, greater trade demand of the same quantity available allows them to raise it penny by penny.  So the question remains, when will be bottom fall out again?  If the local consumer cannot get themselves to work then how are those rich traders going to be able to get their hamburgers for lunch? 
The president of American Fuel and Petrochemicals Manufacturers (AFPM) states that we are shooting ourselves in the foot by constricting how manufacturing and exploration can be done, basically implying that all the rules set in play to protect our environment as much as possible, and the health of our people should not be a concern anymore, they should be lifted to make it easier to produce gas.  He also states that the Keystone pipleline should be approved.  Problem there is, many experts believe this will actually increase the cost of fuel because of the cost to construct it and maintain it.  Granted it will EVENTUALLY make the fuel cheaper because there is less trucks and ships having to move it, but we don't need eventually, we need now!
For those who would scream out there for boycotts, please understand, even if you get a million folks to do it, this is a drop in the bucket for the REAL people who get that over two buck per gallon profit.  Is it any wonder that BP can afford to pay all the fines and settlements without even batting an eyelash?

check out the article

http://news.yahoo.com/afpm-president-testifies-gasoline-prices-161307269.html

Stock Market drops most in months

Are we now to believe that a Republican will actually just "OPEN" federal lands to drilling to drop gas prices, simply because what, he's a republican?  These potential candidates need to get real and stop trying to prove that the current administration is bad when they are just as much to blame for the crap that is going on.  Is Obama such a bad guy for stopping the drilling in the gulf after a multimillion gallon spill?  Was he supposed to just ignore the fishing/shrimping/oystering communities?  Was he supposed to just endanger the tourism for the entire Gulf region, all in the name of keeping prices low?  He has tried to make things more friendly to the gas consumer repeatedly, and only got shot down, by none other than the same republicans that are now saying he didn't do enough.  I watch these candidates bash and bash, and yet they are telling on themselves but just putting other peoples names on the card.  Half the reason the issues are as they are is because the congress cannot seem to do exactly what is necessary, NOPARTISAN politics.  Get rid of this crap that says, hey, I am a republican, or a democrat, or a green party or one of those tea party crippling members. 
For once, be an elected official and put the PEOPLES best interest first, not your own political ambition.  The staff should be paid for by the government, making appropriate wages, not bieng funded to the politician, and then they pay their staff.  The lobbyists should not be allowed to do campaign donations, in fact, I believe that EVERY person who would want to be a candidate be afforded equal amounts of time on the air provided they produce enough signatures to place them on the ballot.  No more should our country be subjected to the greedy bastards as politicians simply becausae they have bigger pocketbooks.  I think that they should recieve the same pay considerations that state level legislators do, get paid a certain amount for the days they are physically in office working, be afforded the same travel pay as any other government employee, save for the obvious perks of a driver in and around DC. 
Perhaps then these people would figure out ways to get the greedy bastards in the stock markets to stop gouging the oil prices.

Gas Prices to cause new recession.

I am not an economist, nor am I a financial wizard, just someone who can look at logic and realize that we are in trouble.  No matter what people may say, the WORLD'S economy is based on oil prices.  This being said, unless the greedy SOB's take their hand out of the proverbial gas consumer's pocket for the desire of getting rich, we are headed for another economic failure world wide.  The easy solution is to simply create an atmosphere where the trading of oil for economic riches is limited and the world sets a reasonable price per barrel.  This, I believe, would also make OPEC simply pump a reasonable amount and create a more stable atmosphere.  While Americans have endured relatively low prices for fuel compared to such places as Germany and Great Britain, those prices have been a staple of our income wages being where they are.  arguably, without increasing the wages to match, persons will not be able to afford to go to work.