McCain credits Bush for drop in oil price

[dragonrider]

I've even seen reports on t.v. that stated one year within 15 miles of the coast. Fact is if we had the green light on this it would drive speculators out of the market. They said speculation was worth $60/barrel.....that would bring it down to $80/barrel from the $140 mark that it was.

Have a good one!:s4:

Wow.. $60/barrel. I hadn't actually heard a figure on what inflation speculation was worth. That is insane, that is about 40% of the current value of a barrel.

Let's hope congress votes on this... Let's also hope that our government doesn't lose sight of what's important and still continue to research alternatives fuels/energy so we don't run into this mess again.

Someone has got to explain to me how this futures market works and how it affects today's spot price. I thought the whole point of futures contracts was to accurately know the future price of a commodity based on future supply and demand predictions, or eliminate the risk of not knowing. How does runaway speculation affect that? Why would anyone buy a futures contract saying "I agree to buy a barrel of oil next year for $130 dollars" if predicted supply and demand say a barrel should only be $70 next year? How does that work? Seems like the market would just correct that out pretty quickly. And if supply and demand say that today a barrel should go for $70, then how does a futures contract for a future barrel of oil change today's price? I don't see how that works at all.

I know I don't know enough about how future's trading works, but it seems like bubbles would not be such a big problem and would rapidly self-correct, and I definitely don't see how it affects today's price.

I am thinking that today's high price is probably NOT due to some kind of futures bubble that has somehow added a 40% premium onto the supply-and-demand price of oil. That just seems like such a huge market distortion for such a heavily traded high-volume commodity that it would have to collapse.

Does anyone know how this works and can explain it to me?

dragonrider Reviewed by dragonrider on 07-25-2008. McCain credits Bush for drop in oil price Republican John McCain on Wednesday credited the recent $10-a-barrel drop in the price of oil to President Bush's lifting of a presidential ban on offshore drilling, an action he has been advocating in his presidential campaign. The cost of oil and gasoline is "on everybody's mind in this room," McCain told a town-hall meeting. He criticized Democratic rival Barack Obama for opposing drilling on the Outer Continental Shelf. Bush recently lifted the executive order banning offshore Rating: 5