Gas could fall to $2 if Congress acts, analysts say

Limiting speculation would push prices to fundamental level, lawmakers told. 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 See full story. There are two kinds of speculators in the futures ma$75 a barrel, about half the current $135. Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets. 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." Futures trading in London has not been a major factor in rising oil prices, testified Sir Bob Reid, chairman of the Chairman of London-based ICE Futures Europe. Rising prices are largely a function of fundamental supply and demand, not manipulation or speculation, he said. "Energy speculation has become a growth industry and it is time for the government to intervene," said Rep. John Dingell, D-Mich., chairman of the full committee. "We need to consider a full range of options to counter this rapacious speculation." It was Dingell's strongest statement yet on the role of speculators. Dingell introduced a bill ...that would ask the Energy Department to gather ...facts on energy prices

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.

ziggy wrote:

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.

Limit speculation? Interefere with the free enterprise system? That's downright un-American, isn't it? What will those commie government manipulators think of next?

Ziggy disagrees vehemently, or so it appears to.

ziggy wrote:What Ziggy does say is that people, just as they have done for eons, need to be responsible for their own condition. But they quit doing that in the 1960's when "nanny government" took over the job .... so now you have 3 generations of people incapable of being responsible. Just sitting back and hoping that someone reals in the economic "speculators" will not keep people warm in Boston or Bangor next winter. You are right, and if it is a really cold winter then many people will have frozen arses. But making homes more secure from the elements of winter will help to make that expensive heating oil go further- maybe even until spring time arrives again. For someone who has never lived a winter in Boston or Bangor, what makes you think they can make their homes more secure from the elements of winter?

Keli wrote:www.marketwatch.com ^ | 06-26-2008 | By Rex Nutting & Michael Kitchen

Limiting speculation would push prices to fundamental level, lawmakers told. 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. ............

(Excerpt) Read more at marketwatch.com ...

Stephanie wrote:Sam & Ziggy,

I think part of the problem with Ziggy is he really doesn't have a good grasp of what many of these structures are like or what the winters are like.

SamCogar wrote:

ziggy wrote:But making homes more secure from the elements of winter will help to make that expensive heating oil go further- maybe even until spring time arrives again. For someone who has never lived a winter in Boston or Bangor, what makes you think they can make their homes more secure from the elements of winter?

The winter of 1977-78 was bitter cold. Its after-effects still linger on. Monongahela Power Company seeks relief from an Interstate Commerce Commission order that denied Monongahela reparation of a part of $970,940 in demurrage charges paid to the Baltimore and Ohio Railroad. The share of the $970,940 for which reparation is sought represented not the actual costs of delay for the specific shipments in fact here involved, but rather that portion of the demurrage calculated to provide an inducement or incentive to prompt return which would contribute to an increased efficiency in operation of the rail system generally. The amounts designed to reimburse actual costs of delay are known as compensatory demurrage, and as to that portion of the $970,940, Monongahela does not seek reparation. The portion with which we must deal is known as a demurrage penalty.1

Freezing of coal in the freight cars and disruptions associated with a strike of the United Mineworkers Union at Monongahela's Harrison Power Station in Haygood, West Virginia, were the reasons asserted by Monongahela as the proximate causes for the delay in freeing and returning the rail cars.

http://bulk.resource.org/courts.gov/c/F2/640/640.F2d.504.80-1365.html

The incredible Blizzard of January 26-27th, 1978 evolved out of a winter that was infamous for cold and storms. The Winter of 1977-78 thus far had been one the coldest, since records began, in many areas from the Rockies eastward to the Appalachians. Mammoth blizzards occurred late in January and early February from the Midwest to the East Coast as strong Arctic plunges dove south into the country and met up with the warmer winds from the deep south.

The winter of 1977-78 was similar to its predecessor (1976-77) in terms of cold. The main difference between the two winters, however, came in February. In 1977, temperatures moderated rapidly during February, while in 1978, the cold actually worsened - with several locations reporting their coldest recorded February to date. The Winter of 1977-78 is written down in the record books as Detroit's seventh coldest winter, Flint's fifth coldest and Saginaw's sixth. (And also one of the coldest ever in WV.) West of the Rockies, it was a different story as a dominant upper ridge of high pressure provided a relatively mild winter, with some stations even reporting one of their warmest winters on record.

http://www.crh.noaa.gov/dtx/stories/blizzard1978.php

SamCogar wrote:And Steph, ...... .... in getting a "straight answer".

.

ziggy wrote:So speculation has not become a part of the free market?

Aaron wrote:When has the United States ever been a 'free market' society?

OH, and ps Stephanie, won'tch ask Zigster if he remembers "the severe winter of 1977-78" .......

ziggy wrote:

Ziggy disagrees vehemently, or so it appears to.

Ziggy does not disagree. People have been freezing to death throughout human existence. Why would they not this particular year?

What Ziggy does say is that people, just as they have done for eons, need to be responsible for their own condition. Just sitting back and hoping that someone reals in the economic "speculators" will not keep people warm in Boston or Bangor next winter. But making homes more secure from the elements of winter will help to make that expensive heating oil go further- maybe even until spring time arrives again.