Is the huge drop in oil/gas prices due to supply/demand factors or evil speculators suddenly being nice?

I would normally think it's the former, but judging from the hysterical rhetoric over the summer from both sides of the demopublican / republicrat aisle, I think it simply has to be the latter. Do you agree?Is the huge drop in oil/gas prices due to supply/demand factors or evil speculators suddenly being nice?
So here is the real answer (which is neither)...





With the Democratic interest in windfall profits tax and Congressional investigations into the impacts of the Commodity Futures Modernization Act, the speculators and producers that saw quite fantastic profits for several years decided it was time to loosen the noose.... kind of a like a child with his hand in the cookie jar hearing his mother come down the stairs.





The CFMA, passed by the Republican House and Senate in 2000 WITHOUT ANY DEBATE, created a separate trading board that did not have regulation under the Commodity Futures Trading Commission. This was strongly advocated by the now bankrupt Enron as a method and means to manipulate energy prices. As a result, tremendous volatility was introduced into the market, which allowed prices to spiral upwards for several years due to a self-fulfilling cycle of greater profits and concerns about punditry beating the drum of $5/gallon gas and $200 per barrel oil.





Perhaps coincidentally, the maximum price in oil occurred: at the same point where the maximum volume occurred in this non-regulated board; and it was the point when trading on the non-regulated board surpassed the trading on the CFTC regulated board.





The so-called ';Enron Loophole'; was closed in June 2008 with the passage of the Food, Conservation, and Energy Act of 2008. This bill was passed by Congress, vetoed by President Bush, and then over-ridden by Congress. The bill received Republican support because the writing was on the wall that several of the deregulations pushed through in 2000 and 2001 were causing serious problems in the US economy... and they wanted to get re-elected (my take). The Bill went into effect in mid-July 2008 and since that point, gas prices have dropped over $1.40 per gallon.





Issues about inventory and supply were a red herring. The arguments about supply/demand had a nugget of truth but were widely false. Yes demand was very high, but questions about the reason for high prices became louder as petroleum reserves kept growing.





My take is that as those in-the-know saw the house of cards start to fall, they pushed hard and furious in the media for expanded drilling leases and rights - everywhere - despite the thousands of unused leases already held by the massive petroleum conglomerations. To their credit, the Democrats held a line and demanded that the companies either drill what they had or give them up. But time was running out as price started dropping like a rock in Fall 2008. They didn't get everything they wanted and were stung with the repeal of their tax cuts in September.





Like the deregulation that caused the current investment/banking/housing meltdown, this cluster has Phil Gramm's greasy hands all over it. The most disappointing thing about ';news'; media today is that much of it is punditry or reporters reading corporate press releases as news.Is the huge drop in oil/gas prices due to supply/demand factors or evil speculators suddenly being nice?
I have to agree with you. Wow..It is funny how they stopped yelling ';SUPPLY/DEMAND'; just before the election!





I do think some of it also has to do with the strengthening of the US dollar on the global scale. More and more people are buying bonds after the instability of the markets...which make the dollar stronger on the international level. But again, I agree with you also, the speculators have backed off a lot.
It's both. We know inventories are rising due to less demand. We know that when demand is high it then attacks some speculator investment. Now that OPEC has cut production we will see what happens. But if people continue to lose jobs and economies around the world stay soft, then prices will stay low. Once the demand starts to rise and inventories fall, watch out.
Hello, I'm Barack Obama.








I myself have brought lower prices to america, By flying every individual barrel of oil back to the Us, Using my gigantic ears and my Big empty pockets.








I'm Barack Obama, and I approve Dumbo.
Who knows because it is rather mysterious. I did predict that the oil prices would go down before the elections but what do I know. It's probably all just pure coincidence.
The oil producing middle east is showing their gratitude toward us for electing Obama!





You republicans can start thanking us now!
A very shaky market as well as a decrease in supply and demand. The speculators aren't on good footing right now, can't say that I blame them.