Friday, August 8, 2008

Where Have All the Oil Speculators Gone?

As posted oil prices soared from $85 a barrel on February 1, 2008, to peak at $142 a barrel in early July, several Congressional committees held hearings to investigate the role of speculators in pushing up prices. Members of Congress went after oil company executives with hammer and tongs, proposing windfall profits taxes on oil company earnings and new restrictions on traders. Congress adjourned on August 1 until after Labor Day before it enacted any new measures.

Good thing, too.

Imagine another round of Congressional hearings, this time with oil company executives and traders on the dais where Members of Congress usually sit and members in the chairs below facing tough questioning. How would members explain the fall in prices to $115.60 a barrel for NYMEX crude futures by August 8? How would they explain why greedy oil companies would willingly give up $30 a barrel in earnings in the short period of a month? Where did the speculators who profit by pushing up oil prices go?

"I have a dream." That someday Members of Congress will face the same judgment as business executives and traders.

1 comment :

Sridhar Gurivireddy said...

Most people (forget politicians) don't ask questions when prices go down. They ask questions only when prices go up.

When prices of airline tickets go down, people don't ask any questions. When the fares go up because of oil prices and Airlines start cutting down less-profitable routes, everyone is up on their feet.

When economics don't work in people's favor, they want to use Govt's political muscle to shift things to their advantage.