President Obama has upped the ante on his efforts to limit the rise in oil prices. The usual process of getting oil and gas prices down at the pump takes oligarchic approval. This president, joined by Treasury Secretary Tim Geithner and Attorney General Eric Holder, called on Congress to adopt tougher rules on speculators in the oil market, as reported by Bernice Napach.
The test for this move by President Obama calls for reading between the lines. Is this president coming out of favor with the oligarchic oil circle? If he is, this means the policies in place that are running our energy futures are starting to put the U.S. at risk of fuel prices going through the roof. Without strategic drilling from offshore programs, we enter into the 1980s situation of being held hostage by oil-producing nations.
"We can't afford a situation where some speculators can reap millions while millions of American families get the short end of the stick," President Obama said.
The replay for the records than has our president's $52 million proposal would stiffen penalties for firms found to manipulate markets and raise the amount of money traders would have to put up to back their positions. It would also beef up the enforcement staff of the Commodity Futures Trading Commission and increase spending on technology to oversee and monitor energy markets, as again reported by Bernice Napach.
Getting a full understanding on peak oil production and the crossover effect remains critical to speculators buying or selling within the oil patch through the drillers such as (SDRL) Seadrill LTD, with projected price targets near-term of $54.
Without the support of the oil barons, this president may become a one-term president, needing to move on his energy policies to get substantial reserves through offshore drillers.
How does this play out for the Republican candidate? It may be the Republicans' shining horse they ride in on, with the oil companies moving production and reserves through the good ole boys system of backing the next president of the United States. Look for gas prices to come down, as back in the Bush years, and you start to gain some political answers to the prior question.
The Daily Ticker's Henry Blodget says the proposal is "embarrassing" because speculators have little to do with the rising price of oil and gasoline. Prices are moving higher, Henry says, because "three billion new capitalists" in India and China are consuming oil and gasoline. It's the balance between supply and demand that determines whether oil prices rise and fall, not speculators, Henry argues, as was stated through Bernice Napach.
The International Energy Agency and the U.S. Energy Department both reported last week that global oil supplies are loosening, even with Western sanctions on Iranian oil. Saudi Arabia and other producers are increasing output on a peak oil production schedule that invites the next leg of exploration through the drilling rigs, which has helped to put some downward pressure on oil prices. Oil is trading higher on Tuesday but came in lower on Wednesday afternoon at $1.58. Look for the drilling rigs to continue to separate from the price of oil going up or down. Drillers are poised for very large profits moving forward. Refer to my other article for review of peak oil and watching for pullback entry.
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