An interesting article in yesterday’s St. Louis Post-Dispatch – courtesy of McClatchey Newspapers’ Kevin G. Hall and Robert A. Rankin – had this to say about what did not cause gas prices to go up:
Usually analysts say today’s high prices stem simply from ‘supply and demand.” They mean demand for oil and gas is rising and supplies aren’t keeping up, so people bid up their price. But global and U.S. supplies are plentiful and demand is stable, so that’s not it.
So, if U.S. oil supplies are plentiful, what did cause gas prices to go up so precipitously?:
I’m convinced … that speculators are actively manipulating (prices),” said Michael Greenberger, a University of Maryland law professor who headed the CFTC’s trading division in the 1990s.
It’s harder and harder for any reasonable observer to dismiss the role of excessive speculation in this market,” said Michael Masters, a professional Wall Street investor who knows how this game works.
He’s testified before Congress repeatedly that speculators are pushing prices up well beyond what supply and demand would warrant.
They both point to a $15 weekly swing in oil prices in early May and $5 a barrel moves on oil prices in a single day – with no obvious change to supply or demand.
Which brings us to the way that our Missouri GOP congresspeople are responding to high gas prices. According to today’s Post-Dispatch,* Reps. Akin, Luetkemeyer, and Emerson all voted last week to reinforce the oil industry’s bogus argument that there is an oil supply problem (Hartzler and Long didn’t vote). The GOPers voted “yea” to:
— bring the level of drilling in the still-recovering Gulf of Mexico back to pre-BP spill levels;
— defeat proposals that would have guaranteed safety requirements proposed by the commission that investigated the BP spill be implemented before drilling in the Gulf returns to pre-spill levels;
— permit offshore drilling in ecologically fragile Outer Continental Shelf regions where drilling has previously been forbidden.
We assume, given past and current GOP rhetoric on these issues, that these votes will be justified as steps to increase domestic energy supply, which, our GOPers will contend, will, in turn, bring down gas prices. (Read, for instance, Luetkemeyer’s statement on the topic.)
However, this reason can’t be too compelling, even to these GOP oil stalwarts, because the trio also voted against a Democratic proposal (HR1231) which would have barred energy companies from exporting any of the oil that they obtain from Outer Continental Shelf areas under federal leases. So what happened to our GOPers’ concern about inadequate domestic oil supplies – which was presumably so strong that it pushed them to risk environmental and safety concerns? Could they maybe be concerned about something else? Something like oil company largess, perhaps?
Remember these facts during the next election year when odds are our GOP oil company BFFs will be in our faces, taking credit for trying to bring down oil prices – while they beat on Democrats and the Obama administration for trying to control speculation, the real reason we are paying so much at the pump.
*“Votes in Congress, Week of May 9,” p. A6 (not yet posted online)