You read the title right: I’m defending the so-called oil “speculators.” I don’t see them as speculators but rather individuals who, based on our current fiscal, economic, and energy situation, are making sound investment decisions. Let me explain.
We currently have a dollar which is declining in value. As a result, each dollar used to buy oil, which is traded in dollars, buys less and less oil. This results in increased costs for each barrel of oil and, in turn, gas prices.
These investors see nothing that would lead them to believe our fiscal situation is going to be changing anytime soon. We keep printing money at an extraordinary rate. We are doing nothing to get our spending and debt under control. As a result, investors and other nations are fleeing the dollar as a stable investment because they don’t believe we’ll ever be able to pay back this debt. As a result, the dollar’s value is going nowhere but down.
They also see that the Obama Administration’s energy policy is doing nothing to allow the expansion of drilling to increase domestic oil exploration and production, despite their rhetoric about our need to rid ourselves of our dependence on foreign oil and the fact that, as my partner pointed out in the previous post, the vast amount of oil this nation has. As a result, oil supplies will remain stable.
With these and other factors combined, they see that the price of oil will remain high, if not go higher. Because of this, oil is a lucrative and smart investment and I cannot fault them for doing what they’re doing.
In addition to the speculators, oil companies are now reporting record profits. They’re also being vilified for it. It is wrong and intellectuality dishonest to do so. They have no control over the factors I listed above. The fact is that their profits are the result of simple mathematics. The price of the product they’re producing is increasing while all other factors are remaining relatively stable. As a result, they’re going to have extra profits. Liberals and President Obama in particular are attacking oil companies for these profits, making it seem like they’re just driving the prices up so they can make more money.
This is just pure ignorance when you look at the facts I listed above. In addition to those facts, oil companies actually want to EXPAND drilling. If they expand drilling, it is going to INCREASE supply, thereby driving down prices. It’s simply supply and demand. It’s Economics 101. But the dirty little secret is the liberals want to keep oil companies as the villain which is why they’re not allowing them to expand their drilling. It gives them a reason to keep pushing their asinine green energy policies which will continue to drive up energy costs. They continue to damn oil companies but in reality, it’s the liberals who want high oil and gas prices. They’re happy as hell right now that the prices are high. They want to see them even higher. And don’t doubt me on that.
SonofLiberty comment: Speculators are really not that different than stock investors. They see prices going up and invest accordingly. They don’t control or drive up prices they just invest based on their educated bets. It’s all a gamble.
Also oil companies wouldn’t mind the prices going down. If prices stay higher people don’t drive as much and buy different cars. This reduces the amount of oil they sell. Of course that’s exactly what the liberals want. Nevermind that more drilling would boost the economy with lower prices and jobs created here in the US.