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15183Re: 70% of oil price is speculation

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  • Scott on the Spot
    Feb 27, 2013
      It's not a matter of buying oil from OPEC. It's a matter of
      establishing a system where the price of the undrilled oil - that is,
      oil still in the ground, below the wellhead, if possible - is taxed
      heavily to discourage speculation. And further that anyone who drills,
      processes, ships or sells the oil after that be able to keep the profits
      from the difference between production costs and raw costs, minus the
      taxes for pollution and land use for drilling areas, refineries, gas
      stations etc.
      The volatility - I pointed to the 3/4 drop from the summer of 2008
      ($147/barrel) to the winter of 2008-09 ($35/barrel) is pure market
      manipulation. In the summer, there were tankers held by many of the
      largest financial firms - Morgan Stanley, Goldman Sachs, etc. - parked
      offshore, waiting for price appreciation - then these holdings were
      dumped on the market, simultaneously with the beginning of the meltdown,
      which also resulted in oil traders being forced to cover their margins,
      driving prices down even more.
      This kind of instability distorts buying decisions, causes millions to
      go hungry and even starve (in developing countries, food, which is
      highly dependent on oil availability/pricing, can be 70% of a family's
      budget). It makes it impossible for businesses to make long-term buying
      decisions without engaging in hedging themselves - something that would
      be unnecessary in a Geoist system in which the surplus was taxed and
      passed back to the people (well, we are being hopeful here!).
      A good first step is to demand that those who BUY the oil take
      possession of it.
      The oil market - or, for that matter, the stock market - is often
      compared to an auction market, but it is not that. When I buy a
      painting at an auction, I have to take it home with me. There is no
      market in speculating the price at which the final buyer will purchase
      the artwork will be (maybe I shouldn't bring that up, or some Wall
      Street type will create one!). You buy it, you own it, ought to be how
      all commodities markets work.
      --- In LandCafe@yahoogroups.com, "walto" <calhorn@...> wrote:
      > --- In LandCafe@yahoogroups.com, "John" burns-john@ wrote:
      > >
      > > Scott Baker hit upon a good point. 70% of oil - which is land as it
      is a natural resource extracted from land - is because of private
      speculation. Geonomics would spot this one of course, LVT, Georgism,
      would not, but how?
      > >
      > > Scott says oil should only sold to those who use it - of course. Oil
      sits in large tanks and may be bought and sold many times. Oil is also
      sold in tankers as they sail the open ocean. The oil in the ships may be
      bought and sold 2 or 3 times on route, which is out of countries'
      > >
      > > People in Europe are finding it difficult to pay for the heating
      bills. It is either eat or heat.
      > >
      > I also find it difficult to pay for my heating bills, but I sincerely
      doubt that requiring me to buy my oil directly from OPEC is a sensible
      > W
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