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Guest Post: What Happened To The Uproar Over Energy Speculators?

Tyler Durden's picture




 

Submitted by Daniel J. Graeber of OilPrice.com,

Gasoline prices in the U.S. Midwest have pulled back from the seasonal highs reported in February. Motor group AAA reported Monday that U.S. commuters paid, on average, $3.69 for a gallon of regular unleaded gasoline, just over 1 percent less than they paid last week. For some markets, that's the first time gasoline prices have declined this year. A series of refinery issues, coupled with higher oil prices, left some motorists in February paying the highest they've ever paid seasonally for a gallon of regular unleaded gasoline. By the end of February, some drivers in the Midwest were paying nearly $4 per gallon on average, sparking congressional debate over the impact of speculation in the energy market. Given concerns over costs associated with healthcare, insurance and other issues not related directly to energy, it's curious why there aren't hearings when prices begin to fall.

Rep. Ed Markey, D-Mass., ranking member of the House Natural Resources Committee, last month threatened to introduce legislation that would put an end to subsidies for energy companies that raked in profits while taxpayers were paying record-setting gasoline prices. On the other side of the aisle, Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, said U.S. commuters would find relief once President Barack Obama signs off on the Keystone XL pipeline.

A week ago, when Massachusetts drivers paid $3.75 per gallon, Markey was expressing his frustrations over fish fraud. For Upton, however, the story was the same. Last week, he expressed concern about the Keystone XL pipeline delays and proposals from Washington that would require stricter smog abatement at oil refineries. Those restrictions would add at least another six cents to gasoline prices when U.S. commuters are already paying record levels, Upton argued.

Monday, however, saw consumers in Midwest markets paying less for gasoline. While that still leaves some Chicago-area commuters paying more than $4 per gallon, it's the first time prices have dropped this year. By Monday, Michigan fell from its February position of No. 7 in terms of high gasoline prices to the No. 21 spot, paying around the national average for a gallon of regular unleaded. Prices may drop further after U.S. crude oil inventories reached eight-month highs.

Gasoline prices change consumer behaviors. When prices are low, people drive more.  That gets them to work quicker, but once U.S. gasoline prices start moving closer to the $4 threshold on average, commuters start using more public transportation, walking to work or telecommuting. During summer price spikes in 2008 and 2009, reports found that obesity rates declined by 10 percent for every $1 increase in gasoline prices, which in turn can save on overall healthcare costs. Higher gasoline prices also mean less traffic, which translates to safer roads, fewer traffic deaths and lower insurance costs. Consumers also turn toward vehicles that get a better fuel economy, instead of gas-guzzling SUVS. And less gasoline use means less pollution and a potentially lower rate of climate change.

The U.S. Energy Department expects retail gasoline prices to average around $3.57 per gallon this year, about 3 percent less than the current average. That average price drops further to $3.39 next year. As the summer driving season approaches, however, it's the Markeys and the Uptons who will be out first with their answers to the unavoidable return to $4 gas. When lawmakers clamor over solutions to the inevitable seasonal -- and temporary -- gasoline price crisis, see how many of them also discuss the health benefits of walking to work for free.

 

 

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Wed, 03/13/2013 - 16:46 | 3327472 Abraxas
Abraxas's picture

Damn speculators. Because of their greed we have to pay up. Ha! Good thing we have the FED to save us the ordinary people.

Wed, 03/13/2013 - 16:51 | 3327496 The Invisible Foot
The Invisible Foot's picture

Don't forget about war as we'll. Gotta go get that oil!

Wed, 03/13/2013 - 17:00 | 3327531 nope-1004
nope-1004's picture

It's because of the 170 million jobs lost to 'secrestration', according to Maxine Waters.

http://www.youtube.com/watch?feature=player_embedded&v=0n0cbFiEWy0

 

 

Wed, 03/13/2013 - 17:04 | 3327547 McMolotov
Wed, 03/13/2013 - 17:09 | 3327562 SheepDog-One
SheepDog-One's picture

Really! Yet U/E rate down...ah well, best of ALL worlds here in Fullretard Ville!

We get all the benefit of 'Fear and Panic' right alongside 'all is well never been better'!

Damn insolent peasants! Back on those oars and ROW, dammit!

Wed, 03/13/2013 - 17:49 | 3327699 SkottFree
SkottFree's picture

Will the next jobs report mention that or just another big upswing of say 250K?

 

Wed, 03/13/2013 - 17:12 | 3327588 smlbizman
smlbizman's picture

i bet gas would be .80 cents a gal. if we back out the "gubmint fees"....

Wed, 03/13/2013 - 16:56 | 3327514 spankthebernank
spankthebernank's picture

PRICE. FIXING.

Was all you needed to say.

Wed, 03/13/2013 - 17:18 | 3327609 mr1963
mr1963's picture

That's not the issue at all, this article is crap. The issue with high gas prices is congress has mandated refiners use x number of gallons of ethanol to satisfy the corn lobby. Not a %age which normal people would have thunk up, but x number of gallons. As less gas is required, less ethanol is also required to keep the blend around 90/10 so people's engines don't start blowing up. The refiners still need to purchase the excess ethanol, but they do this in the form of credits from other businesses. The cost of the credits has risen for $.07 last year to $1.00. Guess who eats the cost? The people at the pump.

Again, direct wealth transfer from me and you to a special interest.

Wed, 03/13/2013 - 16:48 | 3327480 tony bonn
tony bonn's picture

this farticle is a full bucket of goat shit

Wed, 03/13/2013 - 16:53 | 3327502 CH1
CH1's picture

How about expressing your disagreement more positively?

In other words: Tell us what is right.

Wed, 03/13/2013 - 17:10 | 3327571 SheepDog-One
SheepDog-One's picture

I agree it's just gobledeygook.

Thu, 03/14/2013 - 01:14 | 3328780 prains
prains's picture

I agree it's just gobledeygook.

 

just how the oil industry likes it, the less it makes sense the more it can be manipulated. 

Wed, 03/13/2013 - 16:49 | 3327484 NoDebt
NoDebt's picture

Like Obama said, he doesn't care if gas is $6 a gallon, only about how fast it gets there.  So the oil speculators oblige and go up nice and slow with a few head-fake dips along the way so as not to draw any undue attention.  Simple.

 

Wed, 03/13/2013 - 16:52 | 3327499 rhinoblitzing
rhinoblitzing's picture

$3.99 for regular in my neck of the woodz..... They lie about inflation, and rape the working class and push them into serfdumb...Impeach Obama Now

Wed, 03/13/2013 - 16:55 | 3327513 CH1
CH1's picture

Impeach Obama Now

And who might do that, the Red wing of the same gang?

There is no hope in politics, my friend, no hope at all.

Wed, 03/13/2013 - 19:17 | 3327535 Bear
Bear's picture

It's all blue at the polling stations and all red in the pocketbook ... political life will be getting much worse as we move to the one-party, blue-party system. At leaset now there is some discussion of more gobernment spending ... then not so much

http://abcnews.go.com/ABC_Univision/Politics/democrats-texas-future-blue...

Wed, 03/13/2013 - 16:58 | 3327527 Bear
Bear's picture

I get mine for 3.99 99/100, and damn happy to boot

Wed, 03/13/2013 - 18:12 | 3327751 Henry Hub
Henry Hub's picture

***Impeach Obama Now***

 

The President can only be impeached for blow jobs. It's right in the Constitution.

Wed, 03/13/2013 - 16:51 | 3327494 Buckaroo Banzai
Buckaroo Banzai's picture

There are evil speculators, and good speculators. Good speculators drive the price of the commodity down!

Thank heavens for St. Blythe at JPM!

 

Wed, 03/13/2013 - 16:59 | 3327530 The Invisible Foot
The Invisible Foot's picture

"There are evil speculators, and good speculators." Haha your a funny guy.

Wed, 03/13/2013 - 16:51 | 3327495 Smegley Wanxalot
Smegley Wanxalot's picture

1% less than last week! 

Now I have an extra 68 cents to spend at Walmart!!!

Wed, 03/13/2013 - 17:05 | 3327554 SheepDog-One
SheepDog-One's picture

Yep it makes me laugh when I hear the Maniacal Monetizers who add on billions in new debt daily announce to the peasants how good we really have it since something is down 2 cents.

Wed, 03/13/2013 - 17:07 | 3327556 McMolotov
McMolotov's picture

I feel richer already. Maybe I'll celebrate with horse steaks for dinner tonight.

Wed, 03/13/2013 - 16:58 | 3327522 The Heart
The Heart's picture

"Those restrictions would add at least another six cents to gasoline prices when U.S. commuters are already paying record levels, Upton argued."

Don't forget to add the obamacare 20% tax hike that was placed on to every single thing on the planet that anyone can buy in the USSA.

Change!!!

Wed, 03/13/2013 - 17:04 | 3327550 Unstable Condition
Unstable Condition's picture

I think it's spelled Che'nge.

Wed, 03/13/2013 - 17:06 | 3327557 ziggy59
ziggy59's picture

Chains!

Wed, 03/13/2013 - 17:06 | 3327555 max2205
max2205's picture

Higher gas prices make snap look better

Wed, 03/13/2013 - 17:12 | 3327582 Chupacabra-322
Chupacabra-322's picture

It all went down in Building Seven.

Just maybe, to compliment the easing of theft barriers by Bush41, Bush 43 ventured to appoint SEC agents who would accept $200,000 a year to sit around watching pornography on their computers to the neglect of ambitiously prosecuting. This would constitute a conspiracy to loot the treasure of the U.S. by Bush41&43 and their friends, and establish a case for treason. TEN YEARS AGO. Along with 9-11, the Maconda prospect oil well blow out,the lie to murder and steal in Iraq and Afghanistan,the acts of illegal wars,and the rampant destruction of evidence concerning Wall Street and many other instances constitute capital crime of the worst kind.

This new information should surprise not a single person half conscious about the U.S..Bush flies the Jolly Roger. He admits it, and calls it secret, and on hearing this, wannabe journalists prance back to their offices. Their headlines read, "I am so amazed!". I would rather have my head dipped in molten wax then write for a bunch of vulture hacks like 'Rolling Stone' magazine. Hunter S. Thompson had his ashes blasted so he would not crawl up out of his grave to end the lifeforce of 'Rolling Stone'. These crimes are OLD NEWS. YEARS OLD. COVER THAT. Do the public a favor.

 

Nearly 10 years ago, the World Trade Center 7, held financial records that could imprison the top tier of Wall St criminals. The records held within were imperative in over 4000 SEC investigations into the Dotcom bubble. Flight 93 was intercepted by the USAF 119th Fighter Wing and shot down over Pennsylvania by Major Rick Gibney. The plane was headed for New York and WTC.

 

http://www.activistpost.com/2011/08/sec-may-have-destroyed-crucial-probe.html

 

 

Wed, 03/13/2013 - 17:29 | 3327640 Skin666
Skin666's picture

He lost me completely at "Climate Change"

Wed, 03/13/2013 - 17:34 | 3327662 MrBoompi
MrBoompi's picture

Nothing happened.  It's just that ABC, NBC, and CBS aren't really that interested in talking about their sponsors.

Wed, 03/13/2013 - 17:36 | 3327669 Harry Dong
Harry Dong's picture

Well, the higher gas prices helped the retail report...sorta...OK it helped but the seasonal adjustments really pushed it up where it needed to be.

Meanwhile, I'm doing cartwheels that my work truck (F150) sold this week! 15mpg gag.sputter.$85 a tank - damn

And my oldest? "Screw it. I'm walking to work." Pulled the insurance today - that saved $150 a month. Another future Ford/GM buyer lost.

That $150 is some good scratch to go speculate (I'm thinking 1/10 oz AG) (or maybe scrap catalitic converters?)

 

Wed, 03/13/2013 - 17:41 | 3327682 Flakmeister
Flakmeister's picture

Not surprising...

One arguably funny post and a lot of partisan dribble...

And of course not a shred of relevant discourse on the real state of gasoline supplies in the US....

Wed, 03/13/2013 - 17:54 | 3327712 CrashisOptimistic
CrashisOptimistic's picture

There are whispers.

Whispers that C+C as the reported norm is being taken advantage of at the Eagleford and probably at the Bakken.

Conventional wells produce about 86:14 crude vs condensate (which has 60% of the energy content). 

The whisper is that shale oil is 14:86.  Reversed.  They report their flow accurately as C+C and no one is looking at the ratio, because condensate is priced lower and if investors know that, the next hole won't be drilled.

Wed, 03/13/2013 - 18:21 | 3327731 Flakmeister
Flakmeister's picture

Someone had to put the con in condensate..... 

Must read article here:

http://www.rbnenergy.com/dont-let-your-crude-oil-grow-up-to-be-condensate

Wed, 03/13/2013 - 17:57 | 3327715 sessinpo
sessinpo's picture

This was predictable

 

Mass Exodus of US Refineries

http://www.saveamericafoundation.com/2012/04/16/mass-exodus-us-oil-refin...

 

I have no problem with those that claim collusion or price fixing. The reason why, is many of those oil refineries are owned by the oil exploration and extraction companies.

So while it can be touted that oil companies make only a profit margin of 8 -10% per barrel, it is not taking account that many of them are also a middle man, the oil refinery which makes an additional margin. That profit margin at refineries have been low. Only a substantial decline in oil prices would improve that situation.

Since worldwide demand is down, by closing oil refineries, oil companies can increase margins at the retail level while the price per barrel of oil remains subdued.

Wed, 03/13/2013 - 20:06 | 3327768 Flakmeister
Flakmeister's picture

Beg pardon? Worldwide demand is down???

BTW, your article (nearly a year old) that was allegedly sourced from an insider contrasts light/sweet crude with dark/heavy... WTF???

It reads like a puff piece trying to blame the EPA for old obsolete refineries that relied on Nigerian light sweet.... In otherwords, utter horseshit.... 

There is an ongoing mismatch between refining capacity as a function of design input API and the availibility of said oil.....

Wed, 03/13/2013 - 18:04 | 3327732 surf0766
surf0766's picture

Where is Chuckie? And why isn't he holding daily afternoon press conferences about how the high gas prices are hurting the middle class?

Wed, 03/13/2013 - 18:05 | 3327735 gould's fisker
gould's fisker's picture

Hopium says, "these are not the energy speculators you are looking for . . ."

Wed, 03/13/2013 - 18:25 | 3327781 SmittyinLA
SmittyinLA's picture

There are NO issues not related directly to energy. 

The idea that the "cost of energy" is only related directly to energy and NOT everything else is ridiculous. 

Energy prices and the differences between here and there have an impact on everything. 

For instance healthcare is hyper-energy intensive not only for hospitals but everything going into and leaving hospitals. It cost energy to sterilze, to manufacture, to heat & freeze and move, half your medical supplies are made of energy based petroleum products or silicones made with lots o energy. 

Wed, 03/13/2013 - 18:31 | 3327792 Pike Bishop
Pike Bishop's picture

Reading yet another asshole covered in Oil Industry retardant makes me just more weary of it.

Wed, 03/13/2013 - 19:42 | 3327964 orangegeek
orangegeek's picture

Outlook for Oil is bearish.  Gasoline show follow this price decline.

 

http://bullandbearmash.com/chart/wti-oil-daily-falls-marginally-outlook-...

Wed, 03/13/2013 - 20:00 | 3328030 venturen
venturen's picture

Are you kidding demand in the USA is at 1980 level. We are exporting record amount. There must be some ethanol scam where they get multiple subsidies from the Subsidize are us...the US GOVERNMENT!

Wed, 03/13/2013 - 20:05 | 3328045 Flakmeister
Flakmeister's picture

You do realize that the US export gasoline refined from imported crude?

Why do you think refiners on the Gulf Coast are salivating at the prospects for Keystone XL?

Wed, 03/13/2013 - 19:59 | 3328026 venturen
venturen's picture

LET THEM EAT CAKE. Who cares if 20% of their income is spent on gas. They shouldn't be driving anyway!

Thu, 03/14/2013 - 11:22 | 3329548 swinger55
swinger55's picture

Check out the Brent crude chart today.  Perfect example of manipulation in crude.  Price 'defense' at 108.50, then same at the 'zero' line, then again at 109.00.  Some people may like so-called 'cheap' gas prices, but this will not end well for these heffers.

http://www.marketwatch.com/investing/future/BRENT%20CRUDE?countrycode=UK

Thu, 03/14/2013 - 11:30 | 3329575 swinger55
swinger55's picture

Didn't have time yesterday to post it, but 1% 'waterfall' decline (Brent), with absolutely no news to support it.  Probably will have another before the week is out. 

Fri, 03/15/2013 - 14:39 | 3333163 Walt D.
Walt D.'s picture

Speculators? More likely the Easter Bunny.

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