Friday, June 27, 2008

Do Nothing Congress on Excessive Oil Prices

Do Nothing Congress on Excessive Oil Prices

The dumb asses in Congress and the White House do not seem to be going anywhere to lower oil prices for the American public in the near and also the long term future.

McCain specified his long term plan for energy and is calling Obama, "Dr No" for declaring no to his proposals.

CSPAN has been airing many hearings on oil pricing and other energy topics. At least Congress is doing a lot of talking about it.

It may take at least a month or longer for Congress to make law to change the rules to invest in oil futures contracts. It is suspected that recent oil price hikes were due to exploitation of the market. The agency overlooking oil futures has many powers but is collecting data right now and doing nothing else. Right now the futures market allows for the total amount of contracts to exceed the amount of oil available, margin is as low as 7%, pension and hedge funds have taken over the market of oil futures to make a profit rather than oil industry parties interested in making a fair market for oil. The American stock markets, by comparison only allow covered trades, there are lower limits on the number of trades, margin is higher, and watchdog agency oversight is better.

While it is important for Congress to examine the fairness of the oil futures market, most of the other futures comodities markets are much smaller than the oil futures and more easily manipulated and should be examined as well. The leadership of the agency overlooking the oil futures market should be punished for not doing their jobs and be replaced with more aggressive individuals.

Congress shot themselves figuratively in the head by extending the 54 cent tariff on imported ethanol. America need independence from foreign oil and should relish the importation of imported ethanol. The American ethanol industry will never be able to produce enough ethanol to satisfy America's demand for it in several lifetimes. Brazil achieved oil independence because all of their cars are flex fuel and run primarily on ethanol which they produce internally. Brazillians enjoy at least a $1 savings per gallon purchasing ethanol rather than gasoline. Right now ethanol is only available in the Farm Belt of America and most states have no available ethanol for their residents and the outlook for American ethanol for those states is dim. Americans need price relief on their vehicle fuels where ever they can get it and imported ethanol is a good place to start.

Tell your elected representatives to abolish the 54 cent tariff on imported ethanol.

Tell your elected officials that the oil futures watchdog has been acting dead while oil prices have gone through the roof and they should be replaced with more aggressive individuals. We need better rules for that market like we have for the stock market.