The blaming of speculators for the current price in oil is showing that many still have an utter lack of understanding how markets work. To blame speculators for the run-up in oil is like saying the Mona Lisa is a picture of a rather plain looking woman or that the Coliseum is an old wreck of a building. People who believe that the run up in the price of oil is all the fault of speculation fail to grasp the intricacies, history and the mastery of the free market place. Speculators are just a scapegoat for those who don’t want to face the fundamental truth of what the markets want to convey.
And if you don’t want to blame the speculators then why not blame the oil companies. The Obama administration is saying that oil companies that are making these kinds of profits need no “subsides”. API chief economist John Felmy was quick to respond telling Politico, “The federal government by no stretch of the imagination subsidizes the oil industry. The oil industry subsidizes the federal government at a rate of $95 million a day."
The assault on oil companies and their profits is about as helpful to the American people as a kick in the head. The Obama administration and now House Speaker John Boehner said that even he is considering taking away tax breaks or a so called subsidy used by oil and gas companies in an effort to cut the federal budget deficit. Boehner open the door by saying, “I don’t think the big oil companies need to have the oil depletion allowances,” he said. “But for small, independent oil and gas producers, if they didn’t have this there’d be even less exploration in America than there is today.” This isn’t a problem because they probably could not get a permit from the government anyway.
In the mean time Exxon Mobil plans to spend about a billion dollars a day to explore for oil and that will probably be in other countries because the United States is an increasingly hostile place to do oil business. Yet you can give away "free" taxpayer money to GE that paid no taxes to produce inefficient energy source. Steal from the rich oil companies and give to the poor struggling alternative energy companies. Robin Hood would be proud.