The blame was placed on greedy speculators, oil companies that were not making investments in new fields or alternative energy, buying back their own stock, and a whole host of other things. That was when oil price spiked to $143/bbl. Now oil prices have dropped to under $80 and seem to be falling even farther. Oil company stocks have dropped over 50% from their highs this summer as well.
So where is the talk about speculators now? Mutual funds, pension funds, and many individual investors have lost billions with oil's fall. Who is responsible? The market.
I would hope it would be obvious to CONgress that Big Oil was no more involved in the rise in crude as it was in its recent fall. However, I am sure this will be used for political advantage at home to gain more votes. It will probably go something like this:
"See Joe Voter those hearings did pay off. Big Oil was scared and dropped their prices because they knew I, your trusted, elected official, backed them into a corner on behalf of my constituents."
Lee Raymond, former CEO of Exxon, stated it very clearly to CONgress a few months ago that oil is a commodity and its price is cyclical. Nothing but market forces drive its price. Sometimes it rises, and it always falls back to historical levels. Crude oil is not immune to the commodity cycle any more than iron ore or bananas. I wonder if CONgress will send an apology to all the speculators and oil company executives?
No comments:
Post a Comment