# How reasonable is this article re: Oil Prices? **URL:** \ **Category:** Factual Questions\ **Created:** [May 28, 2008, 6:52pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918 "2008-05-28T18:52:36Z")\ **Posts on this page:** 6\ **Page:** 2
**Author:** ![jk1245](https://avatars.discourse-cdn.com/v4/letter/j/49beb7/32.png) [@jk1245](https://boards.straightdope.com/u/jk1245)\ **Post date:** [May 29, 2008, 8:18pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918/21 "2008-05-29T20:18:01Z")
As another data point, the U.S. Commodity Futures Trading Commission has announced an ongoing investigation into oil price manipulation ([linky](http://www.cftc.gov/newsroom/generalpressreleases/2008/pr5503-08.html) ) Note that they state that they usually keep investigations confidential, but this one was outed due to “unprecendented market conditions” Wonder how much the price of a commodity like oil could be manipulated? Some of this is likely a “Hey, we’re doing everything we can!” self-defense mechanism, but if they find speculators had even a slight impact on fuel prices, what kind of response? ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [May 29, 2008, 9:22pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918/22 "2008-05-29T21:22:47Z")
[QUOTE=jk1245] but if they find speculators had even a slight impact on fuel prices, what kind of response? [/QUOTE] As far as I know, speculation on oil prices is in no way illegal. If I believe prices will go up, it is a perfectly reasonable investment for me to trade in futures that have a gain if the price of oil goes up. If enough people do that, it will certainly cause the price to move up. It can work in the reverse just as easily. It is a near certainty that speculation has caused a significant amount of the price movement. That in no way means that there has been illegal manipulation. ---
**Author:** ![cmkeller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cmkeller/32/118_2.png) [@cmkeller](https://boards.straightdope.com/u/cmkeller)\ **Post date:** [May 29, 2008, 9:40pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918/23 "2008-05-29T21:40:49Z")
Longhorn Dave: > [@](#): > > Well, who is better, the effective party that you don’t like their motives or the ineffective party that you do like their motives? If the end result is that less hydrocarbons are used, why do you care if it was speculators that got us there as opposed to the environmentalists? Who says I care how much hydrocarbons get used? I want my cost of living reasonably under control, and these speculators have had a huge part in driving that sky-high. To rationalize it after the fact as good for the environment just makes me hate it more. And it’s wrong, because all they’ll end up doing is cut down on leisure driving, but most people drive out of necessity. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [May 29, 2008, 9:58pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918/24 "2008-05-29T21:58:37Z")
[QUOTE=sweeteviljesus] Who says that revenue raised by a gas tax increase will go to some worthy cause? Who says that some speculator who gets rich off the misery of the American consumer won’t go on to found Carnegie-Mellon or something? [/quote] Well, I say, for one. Statistically and historically, it’s much more likely that a dedicated tax on gas would be applied to infrastructure - especially if the bill were written that way in the first way, as are current gas taxes, which are applied to roads. And if you read the history of the rich in this country - a fascinating subject - you’ll find that the ones who put their money to civic use are almost never the speculators, most of whom do go bust in the end. They’re gamblers. They can’t help themselves. (I’m sure there are some exceptions, but that’s not the way to bet.) > [@](#): > > On the other hand, while high oil prices are spurring research into biofuels, conservation efforts and other good things, I expect that they are also spurring a lot of new exploration, exploitation of previously uneconomic sources, etc. which lead to more burning of fossil fuels which leads to more CO2 and which may lead to another oil glut which will kill a lot of interest in the above. Yes, this is happening. Of course, people have been calling for this to happen for many years, getting ignored all the while. Proposals to put a large tax on gas as a social policy - to encourage people to use smaller cars, e.g. - have also been bandied around for decades, because everybody with a brain in their head knew that this day was inevitable and it would be better to start attacking it before it became a crisis. Well, the crisis is here. But the changes that need to be made, including the ones you mention, can’t happen for another decade or more because it will take that much time to do anything starting from scratch. The trickle-down theory that speculators’ billions will do the public good is a bedtime fantasy rather than an economic likelihood. I don’t terribly mind that Exxon-Mobil and its ilk are making billions (although their profit margins are actually lower than in other major industries) because I’m sure that that money will go to development, new refineries, and overall job making. But speculators? They have no track record of positively affecting the economy over the past 150 years of capitalist manipulation of stocks and markets. Read the history. It’ll do you good. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [May 29, 2008, 9:59pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918/25 "2008-05-29T21:59:10Z")
[QUOTE=cmkeller] Longhorn Dave: Who says I care how much hydrocarbons get used? I want my cost of living reasonably under control, and these speculators have had a huge part in driving that sky-high. To rationalize it after the fact as good for the environment just makes me hate it more. And it’s wrong, because all they’ll end up doing is cut down on leisure driving, but most people drive out of necessity. [/QUOTE] Sorry, I misinterpretted your previous post as sarcasm. For what it’s worth, I don’t think they are rationalizing it after the fact as good for the environment. I think it is simply a side effect. It is clear that people that are trading oil are motivated predominantly by either profit or risk management. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [May 29, 2008, 10:13pm UTC](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918/26 "2008-05-29T22:13:15Z")
[QUOTE=Exapno Mapcase] And if you read the history of the rich in this country - a fascinating subject - you’ll find that the ones who put their money to civic use are almost never the speculators, most of whom do go bust in the end. They’re gamblers. They can’t help themselves. (I’m sure there are some exceptions, but that’s not the way to bet.) [/QUOTE] What is your definition of a speculator? [Previous page](https://boards.straightdope.com/t/how-reasonable-is-this-article-re-oil-prices/450918.md?page=1)