Reply #8: Oil prices are now determined the same way the price of gold is

[jonathan_seer]

It's all speculation.

It's used as "chips" in the giant financial gambling pit known as the world economic oil market.

This change is recent, as recent as just before the rapid rise to 4.50/gallon gas a couple of years ago.

The government was allowed to NOT see it thanks in large part to the Left, who was all to eager to say this was proof that peak oil is here, and also eager to say we deserve to suffer.

That is until it sunk in that it was NOT due to peak oil.

It was due to the need of large financial institutions to find/create something that could produce quick returns on their money.

Oil happened to be their choice. It seemed the ideal choice, for no matter how much we might complain the world will always need oil in the lifetimes of the men who decided to rip oil pricing out of the hands of the major users and put it into the hands of financial gambling institutions like Goldman and the banks.

If you want to fix the problem it's easy. Return the market to the structure that precluded pure speculation by NON-oil using entities like hedge funds, banks Etc.

As much as we might loathe them, big oil companies did a fantastic job of ensuring the price of gasoline reflected the actual price of producing it.

Banks have no such desire. Their desire is to rachet up the price to maximize quick profits. One bank trader was rewarded with a 100 million dollar payout for the success he had in running up the prices.

Sure using oil is not wise. We should cut back Etc., but as long as we're using it we should ensure the price is honest, and not a source of massive gambling profits for non-energy companies as it has become today.

I mean do we really want to trust the price abuse of Goldman Sachs to reduce our use of oil, considering that the ones hurt most are those least able to afford it and the worst times. The working poor lose jobs they can't afford to drive to Etc.