I was doing some research yesterday evening and I came across a few opinions about what the president can do about gas prices. I wanted to bounce one idea of the good people here at TF. What if their was a huge tax on speculation or futures trading on the price of oil? Let me be a bit more clear on that, a tax on the revenue made from futures trading of oil. What that help bring the price of oil down?
Taxing or raising the margin on oil speculators would certainly impact the price of oil(possibly more than anything), while there is good supply, which appears to be the case today. Letting these guys drive the market is like letting your eight year old drive you home from the bar. In the end, it may catch up to you.
I see what your saying and the idea seems very plausible, but if the price should suddenly fall, anyone who shorted it makes a big profit as well. I don't know that it will do what we would like it to, but it could stabalize the price and decrease the rate at which it grows, which still helps.
Understandable, but the issue here is over manipulation of the market. Most analysts believe that traders are a major contributor to the current price of oil, due to over speculation. In short, they have the most immediate impact on pricing, and they are driving it up. Even though oil is a commodity, it's not gold, and a falsely inflated price is unnecessarily damaging to our economy. We can all go our entire lifetime without gold(sorry ladies), but few of us can give up oil, at this point in time at least. Raising the margins will probably be a less intrusive and more effective way to reign in manipulation of the market. Certainly, something should be done to discourage it.
To back your point up Dude, Opec recently stated that oil should be around 60-70 dollars a barrel. Also, that speculation and the declining dollar have contributed to the high price of oil.
On that note, this report just released: Government has been investigating oil market - Oil & energy - MSNBC.com Apparently the less transparent markets overseas are beginning to cooperate with investigators about possible price fixing due to over speculation in the market. I imagine this news will have an immediate effect.
If there was a truly free market in the oil trade, would the US, with the biggest consumption in the world, not have some clout as a consumer? If we didn't follow the bids and offered lower prices . . . who else are they going to sell it to? Producers like Russia, Saudi, and Venezuela need our money as bad as we need their oil. How long can they hold out if we refuse to pay that much? The last time that there was a price run-up like this was in the 70's when the Arab Oil Embargo was supposed to cripple us. Instead, we started conserving, established a national 55 speed limit, taxed gas-hog vehicles, doubled our efficiency, built better autos and reduced our consumption. The loss of revenue hurt the Arabs badly and taught them the limits of "The Oil Weapon". They've never even threatened to use it since. As a nation, we have vital national interests. Other countries regulate their oil industry to operate in the best interests of the nation. We have not only allowed our industry to become dominated by multi-national corporations but we have let them put corporate interests above our national interests.
