Oil! Airlines Issue Open Letter Asking You To Help Them Lobby Congress

In a letter signed by 12 CEOs, the US air travel industry has called upon you, their customers, to help them lobby congress. What’s the problem that they need help solving? Oil speculation. Read the letter inside.

An Open letter to All Airline Customers:

Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now.

For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers. Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem.

We need your help. Get more information and contact Congress by visiting http://www.StopOilSpeculationNow.com.

They’ve sent you an EECB… how will you respond?

Airlines: Curb oil speculation [CNN]

Comments

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  1. tedyc03 says:

    They’re not wrong, you know. I love to bash the airlines as much as the next guy. But they’re right. People are mad about $15 surcharges, late flights, and such, but fuel prices ARE sky high.

  2. tande04 says:

    I knew that speculators were part of the problem but I had no idea (if the figures give are correct) it was that big of a problem.

  3. MisterE says:

    Airlines have some of the largest lobbyist groups in the country. They line the pockets of politicians to allow the crappiest customer service on the planet, and to use any excuse to screw their customers. In turn, laws are passed to allow them to lie and say “Weather Delays”, etc, etc.

    While I agree SOMETHING has to be done with Oil Prices, I think politicians will listen to those who financially support them, but not their constituents. Since the Oil lobbyist have more money, I think the airlines (and their customers) are screwed on this one.

    Pay Up America!

  4. AngryEddy says:

    The airlines need my help? I’ll refer them to my customer service line – they’ve been trained to handle these sorts of annoying complaints. Maybe some gas vouchers or a free fill-up at a future date (subject to terms and blackout dates) would help and get them out of my hair…

  5. differcult says:

    this is the first good thing to come from the ailines in a long time. Oil should be very clear cut…if you buy it, you have to store it. Why on gods good earth would we allow oil to be “Dropped shipped”

  6. arcman001 says:

    Yes, let’s stop speculation. Don’t worry about decades of negligent auto inefficiencies, wasteful Hummer monstrosities and uncontrolled world-wide temperature rises due to the combustion of fossil fuels.

    If we stop the speculators, it will all go away. I sure love quick fixes…maybe this will go as well as ethanol did.

  7. vladthepaler says:

    I don’t understand… maybe this makes sense to people who know more about the stock market? If the problem is that prices go up because the same barrel of oil is bought and sold lots of times, it sounds like there are too many middlemen. Instead of buying their barrels from the 20th middleman down the line, why don’t the airlines cut out the speculators and buy their barrels of oil directly from whoever’s selling them in the first place? (Whoever sells the oil to the first speculator.)

  8. Amelie says:

    Treat me respectfully, don’t keep me hostage on the plane, etc., and then raise your fares. I can deal with higher prices, but I can’t deal with being treated like I’m your property once I buy a ticket or board a plane.

  9. privateer says:

    There’s story info missing here, like where were the airlines’ lobbyists when the “regulatory limits” were being “weakened or removed.” I’m not saying they’re wrong about oil futures trading. But they’re not helpless, either, as we know.

  10. Bladefist says:

    I’ve been blaming the speculators all along. I’m glad Americans are wising up on this issue. I wish us all great success in fixing this issue. Hang the speculators, and raise the dollar value, and we’ll be back in shape.

    @arcman001: Ethanol didn’t work because it was expensive, inefficient fuel, and also our food. Don’t buy the false science that is global warming, and alternative fuel sources such as Ethanol. As an American you have a right to have a hummer, and a right to pay dearly for it at the pump. A quick fix is better then the alternative, which is currently, no fix.

  11. ianmac47 says:

    How about we get a federal airline passenger bill of rights that outlaws bag checking fees and fuel surcharges instead?

  12. hwyengr says:

    @vladthepaler: The speculators make the market. If you produced oil, why would you sell to the airlines for a lesser price than you’d get on the open market? Not to mention that airlines don’t own oil refineries to make jet fuel out of crude oil.

  13. jscott73 says:

    Hmm, I never thought the airline industry would be calling for an increase in government oversight and regulation, maybe we can get more government oversight and regulation concerning the airline industry while we’re at it.

  14. Nepkarel says:

    Oil is expensive because demand is higher. That is what a free market does. I am surprised all those free marketeers now suddenly don’t like the free market anymore.

    BTW, oil is extra expensive in the US due to the very soft US$, which is due to the lacks US policy on keeping the $ hard.

    The current policy of the US is not to care about the exchange rate of the dollar, because ‘the American economy is strong’. Only recently, the president has said that he has a ‘strong dollar policy’. However, nobody is really sure what that policy is, other than a statement by the president. Regardless, I haven’t heard any democrats complain, so I have to assume they agree.

    Just to throw in another quote on the US exchange rate policy. A couple of years ago, when EU members showed their concern about a possible weakening of the dollar value due to the double US deficit, the answer from the administration was, that if the (massively negative) American trade-balance was a concern to the Europeans, perhaps they could make it smaller by purchasing some fine American products. I.e.: “We are not going to stop importing so much, but we’ll be happy to export more”.

    Regarding the oil price, in other currencies it hasn’t increase nearly as much as in dollars (about 15% over the last year in euroland). Oil producing countries simply see the sliding dollar, and make sure that they are getting the same value for their oil.

    Oh, and in Europe, the EU is nicely increasing taxes on diesel (yeah, and actual tax increase in stead of a tax holiday). Nobody really knows why, but French president Sarkozy was laughed at for suggesting to max that new tax on diesel (i.e. make sure that the tax which is levied as a percentage of the price, can not go over a certain fixed value in cents). The Dutch PM responded with “We should not lower oil prices, we should use less oil”.

  15. Bladefist says:

    @vladthepaler: Oil is a commodity that is traded at one value. So even if Bob Jones makes a barrel in his back yard, the price for that oil is still $140. His contribution of that oil will increase supply, and drive the price of oil collectively down, .00001 cent. But thats how it works.

  16. nfreader says:

    This is the best explanation of why oil is so expensive I’ve read so far. Quick and to the point. The entire country needs to read this letter, right now.

  17. CarlR says:

    People like to blame speculation for the recent run-up in oil prices, but it’s not that simple …

    [www.npr.org]

  18. privateer says:

    It does say something that even Southwest signed the letter. After hedging their bets at $51 a barrel, they’ve watched their competition get hammered again and again. They would stand to benefit from the bankruptcy of even more airlines.

  19. I’m taking their request very seriously.

  20. davere says:

    As much as I dislike the airline business and their lack of customer service, this is a totally different issue, and I agree with them. Speculation needs to end and gas prices will see a sharp decline in no time.

    We won’t go back to $1.25 gas any more since the demand is higher, but we won’t see $4 gas either. Think something in the middle.

  21. Ein2015 says:

    I agree with most of the people here… this is a Good Thing that came from the airlines!

    People keep freaking out at the idea of “peak oil” which has been thrown around for the last 2 decades, saying it’ll happen in 2 years or in 50 years… but it’s been gaining more popularity because of the “go green” movement, politicians, etc. This is causing market speculation.

    What this means, is you’re paying more at the pump mostly because people are freaking out, not because the costs of production, etc are increasing.

    When you hear on the news that oil companies are making “record profits,” blame market speculation instead of the oil companies themselves. We all know they can be evil, but they’re not always to blame for everything.

  22. fostina1 says:

    i say we ground all, every single one, no exceptions for a month. then see what happens to oil prices.

  23. nataku8_e30 says:

    @Nepkarel: excellent point! I too was wondering where all the free marketeers went.

    Also, since oil is a commodity traded on the open market, the only real way to make it go down (independent of currency issues) is to reduce demand. Airlines are dying because they just don’t make economic sense. Too bad we don’t have any reasonable train infrastructure as an alternative :(

  24. hellinmyeyes says:

    There are a lot of issues at hand: speculation, growing demand, subsidies in developing nations, reduced refining capacity, etc.; you name it. This is the best-crafted open indictment on the topic I’ve seen, and it’s spot-on. So-called institutional commodity trading is absolutely absurd. No company/trust/fund should be allowed to purchase and trade oil with other companies if it has no capability of using, taking delivery of, or refining the oil.

    I see there’s a lot of “they screwed us, so screw them” in the comments already, but they’re not lying. This is something actually in the public interest, broader than simply air travel.

  25. KyleOrton says:

    @vladthepaler: Seriously. These CEOs are so removed from reality that they’ve never experienced buying a mattress factory direct to cut out the middleman. Watch more daytime TV you rich jerks.

  26. Bladefist says:

    @Nepkarel: I’m a free markateer, and I’m right here. Demand is up, but so is supply. But right now, economics 101 is not the reason oil is so high. I’m against regulation almost always, but, I’ve had it out for these speculators for some time now. I’ll turn my back for a minute, you guys regulate the crap out of them.

  27. Norcross says:

    @vladthepaler: The main issue with commodities speculation (be it oil, corn, etc) is that the trading, pricing, etc. is based on future expectations on how that particular resource will be used and how much will be available. That’s why political geological issues near oil sources cause the price to go up, even though they haven’t actually affected production yet.

    The airlines have a point, however. Given the rise in commodities trading by ‘average’ investors, through ETFs and mutual funds, there has been more money poured into the system causing an increase in trading, and thus prices. Similar to what happened with the housing market, the ‘average’ investor thinking he / she could flip houses with no effort. Putting restraints on the trading (i.e. making people actually hold the futures contract for it’s scheduled length) would help lower the inflated prices.

  28. hwyengr says:

    @privateer: Those $51 oil contracts don’t last forever. They’ll be buying at market rates soon enough.

  29. darkrose says:

    @arcman001: If we stop the speculators, it will all go away. I sure love quick fixes…maybe this will go as well as ethanol did.

    I don’t think this is true. I think if prices go back down people will still look for fuel efficient cars and what-not. The rise in the price of oil shocked them into dealing with the realities of a wasteful society.

  30. iamdmann says:

    didn’t we already bail them out in 2001/2002? maybe if they spent less time asking customers for help and more time helping customers they wouldn’t be having such a hard time. on the other hand, maybe they can create some sort of points system…for every 50 signatures each person collects they can take $.50 off of the checked bag charge…

  31. hellinmyeyes says:

    @Norcross: “Similar to what happened with the housing market, the ‘average’ investor thinking he / she could flip houses with no effort. Putting restraints on the trading (i.e. making people actually hold the futures contract for it’s scheduled length) would help lower the inflated prices.”

    Very accurate comparison. This is mostly what is to blame, at least in institutional trading.

  32. EBounding says:

    “The Speculators” are just the latest boogeyman. The airlines are speculators too! The airlines are buying futures contracts because they expect the price to keep going up too. They’re contributing to “the problem” as well. The difference, according to the airlines, is that they actually “receive delivery” for the oil. What difference does that make? You want to close out other people just because they’re not “using” the oil? Let’s say we did that. We regulate the market so only people like the airlines can bid on oil. What do you think they’re going to do? Do you think they’ll buy just as much oil as they are now? No way! They’re going to keep speculating and hoard all the oil. That will make the price go right back up, but it’ll sure help the airlines bottom line, thanks to government regulation.

    I’m not anti-corporation, but regulating out the “paper traders” is equivalent to corporate welfare in my opinion.

    A good article that explains commodity speculation:
    [www.creators.com]

  33. sean98125 says:

    “Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. “

    Hmmm, if de-regulation caused unchecked market speculation and manipulation in oil, is it possible that it did the same in the airline industry? How much of the current cost of doing business for an airline comes from the interest on debt payments due to takeovers and mergers?

  34. privateer says:

    @hwyengr: Very true. They speculated themselves when they bought in at that price. But Southwest is in a more protected, unique position in the airline industry. I can see how they might easily have just sat this one out and watched to see how things shook loose.

  35. Dear Combined Airlines:

    I am in receipt of your open letter and am writing to inform you that I, as a consumer of your services, am taking this situation ‘very seriously.’
    .

  36. philipbarrett says:

    Please stop the speculators because we don’t have enough credit to be speculators ourselves?

    In other words, no one will sell us futures because we can’t cover the spread if we lose.

    waaaaa

  37. sleze69 says:

    Someone please explain to me why the Enron loophole was established. Besides increasing profit for each investor, what benefit does having de-regulated commodity investing have on the economy?

    From what I have read, this loophole has made fortunes and has had NO benefit for the industry as a whole. If that is the case, there should be nothing stopping congress from closing the loopholes and RE-regulating the industry.

  38. sixninezero says:

    Oil prices, Food Prices, all prices are high because the dollar in your pocket is worth less.

    Every time the Federal Reserve decides to print another billion dollars to bail a business out of trouble your money is worth a little less.

  39. legwork says:

    That’s fine & all, but their letter completely overlooks the negative long-term financial growth of the airline industry due to SkiFree Monsters eating their profits.

  40. hwyengr says:

    @EBounding: The difference is that airlines are speculators that will take delivery of the contracts. Well, effectively…

  41. EBounding says:

    @hwyengr: Yeah…I know. Did you read the rest of my post though? :/

  42. Karkus says:

    This is totally lame. They are just looking for an excuse for firing employees and raising prices. Yes, I know airlines are in trouble, but regulations will NOT solve the oil price problem. It’s supply/demand. Duh. It CAN’T be solved, except through conservation and alternative energy.
    Airlines…just raise your fares already! Stop the nickel and diming with silly fees and surcharges.

  43. smartperson says:

    I wish it was that simple, airlines of the US. The speculators are the only people insulating us from a jump spike in oil prices. Would going from $50/barrel to $200/barrel in a week be better for the economy? Certainly not. Everyone placing bets on the future is giving the world time to prepare for the time of Peak Oil, which we are now approaching, by smoothing out the increase in market price.

  44. milqtost says:

    @Bladefist: As an American you have the right to a Hummer but you also get to enjoy the perks of a free market. I hate the high prices as much as anyone but just as people can buy and sell giant gas guzzlers, so too can speculators buy and sell oil. It sucks when those American freedoms to bite you in the ass doesn’t it?

  45. NotATool says:

    Let me get this straight…they cancel my flights, have random, unexplainable delays, charge me for baggage, treat me like crap, nickel and dime everything, etc. etc.

    And now they want MY help?

    Will they improve their service if I help them, or will the floggings continue?

    That’s what I want to know.

  46. yellowspaced says:

    Just got this email, there is a link at the bottom of it to [capwiz.com] which is a form letter to send off. It does all the work for you.

  47. SacraBos says:

    @vladthepaler: Partly because airlines don’t buy crude oil. They buy jet fuel. The speculation problem is at the crude oil stage before it gets to the refinery.

    Personally, I just blame those infomercials years ago about how to make a huge fortune by investing in heating oil. Wasn’t that a Kevin Trudeau thing, too?

  48. backbroken says:

    Deregulate us!!
    Regulate them!!

  49. MeOhMy says:

    It’s not just supply and demand. It’s not just speculation. It’s not just prices set in part by emotion with no basis in reality. It’s not just the weak dollar. Humans love quick, simple problems with quick simple solutions. “If we all just don’t buy gas from Exxon/Mobil today, the price will drop.”

    Economies are complex, slow-moving beasts that cannot be brought into line with single one-off actions. Controlling the rampant speculation is only one piece of the puzzle, but it is an important piece nonetheless.

  50. dry-roasted-peanuts says:

    @Danny Mann: yep, to the tune of $15,000,000,000.
    [archives.cnn.com]

    Honestly though, when has the airline industry ever been wildly successful? They wanted the bailout in 2001 because of terrorist fears. But whey were they in such a drastic place pre 9/11? Hell, a bunch of the “big guys” have filed for bankrupcy protection since the airlines were deregulated in ’78 (Continental twice, Pan AM, TWA, Midway, Barniff) and who knows how many smaller ones have done the same. It just seems like running an airline is damn near a zero sum game when you factor in the costs of maintaining the airline, staffing it, dealing with labor unions, external factors like taxes and oil prices, etc.

  51. thebluepill says:

    From;

    [www.howstuffworks.com]

    “A plane like a Boeing 747 uses approximately 1 gallon of fuel (about 4 liters) every second. Over the course of a 10-hour flight, it might burn 36,000 gallons (150,000 liters). According to Boeing’s Web site, the 747 burns approximately 5 gallons of fuel per mile (12 liters per kilometer).

    This sounds like a tremendously poor miles-per-gallon rating! But consider that a 747 can carry as many as 568 people. Let’s call it 500 people to take into account the fact that not all seats on most flights are occupied. A 747 is transporting 500 people 1 mile using 5 gallons of fuel. That means the plane is burning 0.01 gallons per person per mile. In other words, the plane is getting 100 miles per gallon per person! The typical car gets about 25 miles per gallon, so the 747 is much better than a car carrying one person, and compares favorably even if there are four people in the car. Not bad when you consider that the 747 is flying at 550 miles per hour (900 km/h)!

  52. eightfifteen says:

    Perhaps for the first time, I am in full agreement with the airlines. Although, it’s not JUST about speculation, it’s also about investment banks being the speculators. It’s set up so investment banks own tons of oi futures, then they speculate that the prices will go up. Nice set up.

  53. j03m0mma says:

    If we help them and get it passed can we get free movies back??????

  54. thebluepill says:

    We will get a bill for reading that letter though.

  55. ohyeahright says:

    @AngryEddy, @Phillip M. Vector: Inevitably well-played.

  56. Jean-Baptiste Emanuel Zorg says:

    @Nepkarel: Oil is expensive because demand is higher. That is what a free market does. I am surprised all those free marketeers now suddenly don’t like the free market anymore.

    I’m not.

  57. PDX909 says:

    @AngryEddy: That really made me laugh, thanks.

  58. razremytuxbuddy says:

    The airline industry has concocted an argument most of America will want to support because the average citizen doesn’t partake in commodity trading, and doesn’t go to the effort to understand it. Instead of explaining how the system is supposedly flawed, the airlines’ letter is well-designed to bring back scary memories of the fraudulent electricity trades that caused blackouts in California, and led to numerous charges against the alleged trader/culprits. The letter doesn’t actually say anything at all. It gives no details as to what is supposedly blocking transparency and disclosure in the market. Oil commodities trading is not skewed or unfair. In fact, it has greater flexibility than some other traded commodities, due to the many options for storing and delivering the product, as opposed to being tied to the capacity and delivery points on a grid or pipeline system. There are few barriers or constraints to the oil commodities market. Oil speculation has increased because the market is good right now, i.e., demand simply exceeds supply at the moment. It’s a “hot commodity.” In the last two decades we’ve seen several cycles where oil or gas prices tanked, sometimes catastrophically for the oil and gas companies. I remember just a few years ago, when natural gas companies were trying to get out of long term contracts for $2.50/mcf. The market will cycle again; I just don’t know when or to what degree.

    I’m another fed up airline customer who now looks for other means of transportation before resorting to air travel. I remember when American (I think) negotiated salary reductions with its flight attendants to supposedly save the company. As soon as the airline succeeded in getting those salaries reduced, it announced giant bonuses for the executives. This is a popularity contest between the airlines and the oil industry. When the airlines say “feel sorry for us; we need your help,” I’m not inclined to be supportive.

  59. EBounding says:

    @smartperson: That’s exactly right. Price controls the supply of everything. Speculators help ensure there is enough oil in the future. If they’re regulated out, and there really is a small supply of oil in the future, we’re going to have a shortage and then an even bigger price spike in the future.

    If the speculators are wrong though, they’re going to get burned big time. And if they do get burned that might convince a lot of people not to get involved in “paper speculation” for quite some time.

  60. Everyone needs to listen to the npr bit that RCarl has above. It’s not so simple as, oil speculators are driving the price of oil up. The price of oil will be dependent on what the market is willing to bear. If you don’t like how much the price of oil is, consume less. As demand drops, so will prices, and ‘speculators who wagered that prices are going up will lose money. They will in turn drop out of the speculative market.

  61. Mr_Human says:

    There was a column in the New Yorker a few weeks back, stating that blaming the speculators was overblown:

    [www.newyorker.com]

    The writer says the problem is that world demand has grown, and that “shortage psychology” at work.

  62. xphilter says:

    @vladthepaler: so speculators assume a lot of risk in the market by buying when someone wants to sell and vice versa. If we did not have anyone speculating then there would be much less liquidity, which could have the affect of having huge swings in the price–I want to sell at $5 but there is only 1 person who wants to buy and they want it at $1.
    The airlines should have planned better by hedging against the price oil by buying futures contracts a year ago. It is possible to lock in exactly the price oil a company will pay for a long period of time. The high price of oil is just an excuse for poor management.

  63. Nepkarel says:

    @ nataku83: The problem for the free marketeers is that they are used to the US being the power that can influence things. Problem is that currently the immens power of 300 million rich Americans is being dwarfed by 2,5 Billion Chinese and Indians.

    @ Bladefist: That would be a hypocritical of you. You can’t have it both ways. Either you are a free marketeer, and you fill up your car smiling because you have oil-stock in your back pocket, or you admit that free markets aren’t always the best.

    BTW: I am not denying that speculation has a bit of influence on the oil price, but if you really want to bust some speculative ass, please go after those folks that speculated on houses by buying them with interest-only mortgages, and the folks that traded in those mortgages. *They* really created the current financial mayhem, including a good chunk of the crappy $

  64. Mr_Human says:

    From that New Yorker article:

    Congress is . . . taking aim at perfectly legal speculation, namely the buying and selling of futures contracts, which are effectively bets that oil prices will go up (or down). Futures contracts can be used by oil sellers (like OPEC ) or oil buyers (like the airlines) to hedge their risks by agreeing to sell or buy oil in the future at a set price. Speculators, by contrast, mostly use futures contracts to gamble on oil prices, and have no interest in buying or selling real barrels of oil. These gambles can be tremendously lucrative, but they don’t directly determine the real (or “spot”) price of oil. That’s set by the people who are buying and selling actual barrels of petroleum. Although speculators could directly distort oil prices by turning their futures contracts into oil and then taking it off the market to drive up prices, a look at oil inventories shows no sign that this is happening.

  65. Bladefist says:

    @Nepkarel: I’m not hypocritical. My mind changes when the facts change. Contrary to popular belief, being a conservative republican has nothing to do with being totally against some forms of regulation. In terms of national commodities, I lean towards the center. I don’t want to the government to take over oil, but maybe make some decisions on speculation. *Shrug*

  66. Snarkysnake says:

    I’m going to get on the phone to my congressman alright -Just as soon as I finish typing this.

    When I call, I’m going to lobby him (or her) to rein in high prices for airline tickets. Im going to demand that these assholes and their shit excuse for transportation give us back the space that they have been stealing from us by adding more seats to already overcrowded planes. I’m going to insist that rude flight attendants have their disrespectful ass spanked right in full view of the coach section. I’m going to insist that phone tree be made a capital crime. I will demand that any dumbshit airline exec that allows passengers to be trapped on an airport runway for 8 hours while he pretends to give a shit be forced to do the same time hour for hour in one of his company’s planes. I will tell my congressman that I will “contribute” dump trucks full of money to his campaign if he will stop sending trainloads of money to the airlines every time they fuck up.Finally, I will demand that the CO’s of American, Delta, United, continental and US Airways be forced to attend debt management classes.

    There- Isn’t democracy wonderful

  67. AlphaTeam says:

    This is one of those things, I would help and encourage others to lobby Congress for as well.

  68. chrisjames says:

    Huh? Speculation isn’t the problem. Or rather, it’s not a problem that the airlines themselves can’t fix by buying futures themselves (see Southwest hedging). They’re all upset that their crystal balls weren’t properly tuned to see the current situation, so they’re backlashing at the speculators. Boo hoo. If it were only airlines in the game, the situation would still be exactly the same, though we might have cheaper flights and less airlines in jeopardy. Oil prices wouldn’t be any lower for the rest of us, the people that they’re begging for help.

    What’s the fix, nixing the commodities market? Forcing trade? Setting aside so many barrels for spot trading? How do you decide the constraints and whose crystal ball do you get to use?

    How about: all commodities trade must involve a physical transfer of goods before it can be retraded. Not a perfect solution, but it at least keeps people from getting rich by stockpiling papers instead of barrels.

  69. MercuryPDX says:

    sorry…. can’t formulate a full thought right now… too busy laughing my ass off…. ok (Wipes tears… catches breath)

    They’ve sent you an EECB… how will you respond?

    Do unto others…
    ————————-
    Dear Sirs;
    Thank you for your recent letter on OIL SPECULATION. I would like to personally assure you that my dog and I are taking the matter very seriously. At this time, we do not have a firm policy in place regarding OIL SPECULATION but I will personally pass your letter on to the houseplants, who are the specialists that have authority in this matter. Enclosed you will find a free coupon. Please use it with our compliments.

    Once again, we’d like to thank you for voicing your concerns about OIL SPECULATION, and for being a valued customer. We look forward to your continued patronage in the future.

    Sincerely,
    Mercurypdx, Inc.

    ATT: Free coupon brought to you by Imageshack
    CC: Dog, Houseplants

  70. ssaoi says:

    This is simple economics people.

    Demand is down.
    Supplies are up.

    Prices should be going…which direction? anybody?

    If you aren’t reading Ed Wallace you need to be. He is the most well verse expert on the subject.

    [www.businessweek.com]

  71. hwyengr says:

    @razremytuxbuddy: If “demand simply exceeds supply”, then where are the shortages? India and China have been developing for a decade. It’s not like last year they said, “Hey, let’s start buying oil!” But, prices have nearly tripled in a year.

  72. hwyengr says:

    @chrisjames: I think your solution about delivery is actually the solution that everyone wants. Personally, I don’t want to eliminate the market. I just don’t want the various state pensions and fund managers cornering it.

  73. britne says:

    @Karkus: exactly.
    airlines – buy your gas, set your fares accordingly.
    people – fly less.
    airlines – spend less on oil, since people are flying less.

    not rocket science. supply and demand.

  74. theblackdog says:

    @xphilter:

    The airlines should have planned better by hedging against the price oil by buying futures contracts a year ago. It is possible to lock in exactly the price oil a company will pay for a long period of time. The high price of oil is just an excuse for poor management.

    Southwest did just that, hence why they have not had to raise fees. However, notice they have signed the letter as well. I think that since prices have gone up and stayed up, it means any new contracts for Southwest (and others) will end up being more expensive, so I foresee Southwest will have to break down and start charging extra fees as well.

  75. razremytuxbuddy says:

    @MercuryPDX: Great letter. Now I’m laughing my a** off!

  76. Ariah says:

    @Mr_Human:
    But man, I need to blame somebody! The tricky part is deciding what villain is responsible. Oil companies, speculators, OPEC, the Bush administration, SUV owners, or some combination thereof? I guess I’ll select the one I’m already inclined towards, then read some articles that support my decision. Then it’s time to express my anger, preferably in some way that isn’t too inconvenient.

  77. The_Truth says:

    Im surprised everyone is jumping on board without reading the ‘fine print’

    “We believe that restoring and enforcing these limits, along with several other modest measures, “

    They dont say what the other modest measures are.

    Its these little clauses that industry ahs been dropping into proposed legislation that has really gotton us into this mess to begin with.

    Cutting out speculation, fine, adding several other undisclosed modest measures = not fine.

  78. SAGoon987 says:

    This should be the #1 question everyone asks: If oil speculation (or speculation in general considering how law works) ends, who gets to make the money that was formerly made by speculators?

    Is it the airline industry? Someone is making that money. While I want to help in this energy crisis, I need to know more about where this money is going before I accidentally find myself a corporate airline lobbyist working for free.

    Personally, I’m just fine with paying higher prices. I know not everyone has the financial security to say that, but I’d rather just keep the same amount of service- as if some airlines could actually get worse- and pay more. As a savvy, yet understanding consumer, I’m ok with paying more if a company can show me legitimate reasons (like rising oil prices) why costs have to increase. Companies would be surprised by the amount of people who would just nod in agreement if they came out and said, “Sorry, our costs have gone way up. We’re going through some investor cash right now, but we need to raise prices to keep our current staff and maintain profitability.” Honesty goes a long way, but I don’t know if the average world citizen is reasonable enough to accept the honesty and not have some knee-jerk reaction to it.

  79. xphilter says:

    @theblackdog: true, but even Southwest should have had a plan of “oh my god! $100 oil!” I have a hard time believing none of these companies have thought about the current situation. Did they think when prices rose more people would fly? Just like everyone else in America, they are now paying for their years of relatively ‘good times’.

  80. Jenng says:

    @mercurypdx

    YOU TOTALLY JUST MADE MY DAY! Thanks for the laugh.

    I think there was some good comments both ways on this and I actually enjoyed reading, while learning a little and getting a good laugh.

  81. MercuryPDX says:

    @razremytuxbuddy &Jenng: Had to be done. Hopefully I captured the “Eau de Form Letter” format accurately.

  82. ehrgeiz says:

    I’ve never understood how we allowed speculation to push oil prices up as high as they are now, oil is not something we are going to run out of in any of our lifetimes there is enough on this planet to last thousands of years. I’m behind this because if oil had not gone so high skybus would still be around and I really enjoyed 10 dollar tickets.

  83. steininger says:

    So in an asides to this oil speculation issue, those of you who are pro-regulation in the airline industry, how many of you have looked into the period of time when they were regulated? They fought hard to keep from being deregulated because it meant that they would have to start competing and lowering prices to get your business. Before the deregulation you had to pay something around the equivalent of 5 grand to fly LA to New York, thats what a couple hundred now? Is that extra 4 grand worth it for the nice meal and slight increase in leg room you got? This isn’t to mention the millions of tax payer money used to enforce laws that dictated the quality of food served in airline meals among many other things.

    Additionally to this issue things like bag surcharges and the like are there to keep you from having to pay a higher ticket cost. Yeah I liked that all inclusive price too, but when you’re flying with just a 20 pound carry-on do you really think you should be paying the same as the guy who brought 150 pounds of luggage between his two checked bags and the one that he is using to overload the storage bin above your head? No, its the same principal as a toll road. You pay for what you use, its way better than everyone paying for everyone else.

    Another thing, if you have the government regulate the airlines then you end up with the poor or less mobile paying tax dollars to subsidize the travel methods of the rich.

    On the terms of the speculation its messed up and sucks, but hey, if you want freedom then you have to deal with the downsides. If you want to keep your right to resale your old dvds on craigslist then you have to support someones right to resale the barrel of oil they just bought. Its the same principal just on a different scale. Yeah free market capitalism has some downsides, no one said it didn’t, but its sure a lot more fun and efficient than any of the alternatives.

  84. Tmoney02 says:

    @CarlR: Thanks for the great link everyone blaming the speculators and making them into boogeymen need to listen to it.

    I will also post an oped from Tuesday’s Wall Street Journal (A-20)
    ——————
    The Onion Ringer
    July 8, 2008; Page A20

    Congress is back in session and oil prices are still through the roof, so pointless or destructive energy legislation is all but guaranteed. Most likely is stiffer regulation of the futures market, since Democrats and even many Republicans have so much invested in blaming “speculators” for $4 gas.

    Congress always needs a political villain, but few are more undeserving. Futures trading merely allows market participants to determine the best estimate – based on available information like supply and demand and the rate of inflation – of what the real price of oil will be on the delivery date of the contracts. Such a basic price discovery mechanism lets major energy consumers hedge against volatility. Still, “speculators” always end up tied to the whipping post when people get upset about price swings.

    As it happens, though, there’s a useful case-study in the relationship between futures markets and commodity prices: onions. Congress might want to brush up on the results of its prior antispeculation mania before it causes more trouble.

    In 1958, Congress officially banned all futures trading in the fresh onion market. Growers blamed “moneyed interests” at the Chicago Mercantile Exchange for major price movements, which could sink so low that the sack would be worth more than the onions inside, then drive back up during other seasons or even month to month. Championed by a rookie Republican Congressman named Gerald Ford, the Onion Futures Act was the first (and only) time that futures trading in a specific commodity was prohibited, and the law is still on the books.

    But even after the nefarious middlemen had been curbed, cash onion prices remained highly volatile. In a classic 1963 paper, Stanford economics professor Roger Gray examined the historical behavior of onion prices before and after the ban and showed how the futures market had actually served to stabilize prices.

    The fresh onion market is highly seasonal. This leads to natural and sometimes large adjustments in prices as the harvest draws near and existing inventories are updated. Speculators became the fall guys for these market forces. But in reality, the Chicago futures exchange made it possible to mitigate the effects of the harvest surplus and other shifts in supply and demand.

    To this day, fresh onion prices still cycle through extreme peaks and troughs. According to the USDA, the hundredweight price stood at $10.40 in October 2006 and climbed to $55.20 by April, as bad weather reduced crop yields. Then it crashed due to overproduction, falling to $4.22 by October 2007. In April of this year, it rebounded to $13.30.

    Futures trading can’t drive up spot prices because the value of futures contracts agreed to by sellers expecting prices to fall must equal the value of contracts agreed to by buyers expecting prices to rise. Again, it merely offers commodity producers and consumers the opportunity to lock in the future price of goods, helping to protect against the risks of future price movements.

    Tellingly, the absence of that option for onions now has some growers asking Congress to lift the ban. But instead of learning from its onion mistakes, the political class seems eager to repeat them.

  85. JiminyChristmas says:

    @Mr_Human: We have a winner! Yes, the futures market and the spot market, while somewhat inter-related, are entirely separate markets.

    For those of you jumping on the blame the speculators bandwagon: the spot market involves physical delivery of real oil, not trading pieces of paper. Oil is rarely actually delivered under a futures contract. Likewise, most contract arrangements reflect the spot market. Go to Bloomberg.com or some other financial site that tracks both future and spot commodity prices. You will see that crude oil spot prices are trailing the futures by less than $1 per barrel!

    Sorry, but $140/bbl is the real price, not some false-feedback-distorted-by-speculators price. If the spot price is $140 that means real people are paying 140 US dollars for a real barrel of oil. You don’t get a much clearer picture of basic supply and demand than in the spot market.

    As tough as it may be, $140/bbl is a clear reflection of current market fundamentals. Think about it: For a couple of years now oil prices have strongly trended upward. That’s a market signal that there is not enough supply.

    Even though net supplies have increased during that time, new demand has outstripped even that. Consider that the Chinese alone use 1 million barrels of oil more today than they did just three years ago.

    $140/bbl isn’t good for anyone. Everybody would be happy if oil were just being sold ad infinitum for about $65/bbl. Sure, suppliers benefit in the short term but they will take a big hit if an economic downturn leads to a drastic reduction in demand, or if high prices push people to pursue alternative fuels. The main reason we enjoyed such low prices in the late ’90s was the deep Asian recession.

    Altogether, what I think you can infer from an ongoing situation of high demand, high prices, and inadequate supply is that more supply just. isn’t. there.

  86. picardia says:

    Sure, I’ll do this. The airlines just need to send me $15 for my first e-mail to Congress, plus an additional $15 for any other calls or e-mails.

  87. Canino says:

    It seems the airline execs are confusing “speculators” with “middlemen”. Saying that speculators push the price up with each trade is disingenuous at best. The reason they’re “speculators” is that the price can certainly go down, in which case they lose money.

  88. rellog says:

    @arcman001: I’m for regulating the speculation, but also raising fuel taxes to help support new technologies and greatly increasing fuel economy standards to reduce our dependence and our carbon-footprint.

  89. ColoradoShark says:

    A picture of these guys should be next to the word “hypocrite” in the dictionary.

    Airlines are good, do not regulate us!
    Oil companies are bad, regulate them!

  90. SigmundTheSeaMonster says:

    Oil is up because:

    a) China (consumption, African Oil deal, export/manufacturing)
    b) war (fleets, armor, planes, all need fuel)
    c) imports (freighters run on…diesel!)
    d) speculators (by far the worst and most responsible as they moved from the risky hedgefunds of mortgages to oil futures)
    e) Oil companies don’t want to spend profits on expensive refinery construction (they need to add 10 more refineries as the oil is there), they want the governments to finance their offshore and recreations drilling (they’ve already had clearance in certain oil fields and have never touched a drop).
    f) threats from countries like Iran, unrest in places like Nigeria, …

    We can conserve. We can move to other forms of energy. Stop buying cheap goods, or supporting companies that would offshore manufacturing rather than local (how much to ship?) We should drop the speed limit to 60 instead of 65 (please, there are still asshats that drive like it’s NASCAR). But we can’t rule out oil. It’s on the roads (tar), in your smelly candles (parafin), your petrochems of your New car plastic interiors, in chemicals for your tires, paints, …

    Rant over. Peace.

  91. usa_gatekeeper says:

    If speculation is indeed the driver, then it’s global speculation – just like global demand. Not just American speculation. Not just American demand.

    IF the American government intervenes and inhibits speculative trading of oil futures by American traders, the rest of the world will simply close ranks and keep on trading without American participation.

    And the price will still not come down. Unfortunately, this has to run itself out on its own.

  92. Go to hell. Check my website for company policy.

  93. Tmoney02 says:

    @smartperson: Would going from $50/barrel to $200/barrel in a week be better for the economy?

    Ding Ding Ding. This man knows what he is talking about. The future market smooths out shifts in price and is very important, especially for something as important as oil.

    I am going to take another, completely different tack.
    For everyone complaining about speculation, if the speculation was doing the opposite of what you say it is doing, and drove the price down far more than “what it should be”, (speculation can go both ways)would you be saying anything and trying to get the oil companies the price they deserve? Or would you just happily profit from the “speculation”?

  94. Tmoney02 says:

    @sleze69: See these comments @Tmoney02: @smartperson: @Tmoney02:

  95. JiminyChristmas says:

    @ehrgeiz: FYI, I don’t think you would find anyone in the oil business who would agree with this:

    …oil is not something we are going to run out of in any of our lifetimes there is enough on this planet to last thousands of years.

    In one sense, I suppose you’re right that we will never “run out.” I suspect there will be a barrel of oil in the ground somewhere for time immemorial. That said, when it costs more to get a barrel of oil out of the ground than it’s worth then we are effectively out of oil. The concept is EROEI: Energy Return on Energy Invested.

    As for thousands of years of oil, that’s right up there with believing in unicorns. Plenty of energy experts believe that global production plateaued sometime between 2005 and the present. Plenty of industry insiders, like the Chief Technology Officer of Chevron, think global production will peak by 2020. The most optimistic, and totally unverifiable and self-interested, claim I have heard is by the head of Saudi ARAMCO, who says there’s enough to go around for another 100 years.

  96. differcult says:

    @Tmoney02: Speculators have never driven the price down…Think about it, if there are 20 transactions that make up the final price of oil until it hits a gas station…I don’t think all 20 are shorts on oil…people are making money, up or down. But more on the upside.

    I still think that if you want to buy a commodity you should have to have the ability to take the order.If people want to start playing options with oil, that would be okay, because it would be based on REAL trades.

  97. lincolnparadox says:

    Here’s my modified letter:

    Dear Senator So-and-so:

    High prices for energy are hurting me and my family and I strongly urge Congress to act immediately to lower costs for all Americans. Over the past 8 years, my annual automobile fuel costs have gone from $519.65 to $1376.56. Why, just over the past 12 months I have seen a $591.92 increase in my gasoline spending.

    Rampant speculation in the commodities futures market is driving up prices out of proportion to marketplace demands. The problem is speculators are increasingly buying and selling commodities such as oil even though they have no intention of using the product. The unregulated speculators are pocketing billions of dollars at my expense.

    To lower oil prices for all Americans we need to increase domestic supply, exploration, alternative energy sources and conservation. On the national front, ANWR will provide oil for Americans a decade down the road. The Bakken formation in North Dakota and Montana can provide Americans with oil now. Shale oil deposits in Colorado have the potential to make America energy independent, if they are developed properly. You have only to look north to Canada, and witness their exploration of tar sands to understand that exploring known oil reserves here is cheaper and faster than off shore drilling or prospecting ANWR.

    Domestic coal burning plants and wind energy are both plentiful in our state, and helping Iowans to divert away from petroleum products and towards electric transportation is good for Iowa. This will lower gasoline/oil prices for other industries and help to protect the environment. Convincing and helping farmers to switch over to electric farm equipment will also improve the energy balance of using corn or cellulosic ethanol for an alternative fuel. If you look to the coal mines as an example, the majority of their heavy equipment is electric.

    Then there is the problem with excessive speculation; the price of gasoline and heating oil is almost becoming prohibitive. The price of food and other essential goods are also inflated, partly due to speculative contracts on corn, wheat, cotton and oil. Congress should promptly take action. I suggest that we re establish strict position limits on all commodities. This includes food commodities as well as energy commodities. We should also be sure to control foreign futures exchanges trading as strictly (if not more strictly) as US trading. We need to place strict position limits on “swaps trades” or over the counter trading, as well. Finally, we need to regulate exempt commercial markets the same as designated commercial markets and bring more transparency to energy trading, working through the Commodity Futures Trading Commission.

    Thank you for listening to my concerns. If you strive to bring change in the commodities market in order to reduce both food and fuel prices, you can expect my vote come re election time.

  98. MadameX says:

    Today’s Headline (from CNN): Oil zooms up $5-plus on Iran fears

    Did the demand go up today enough to justify an additional $5 price increase? Nope. There is speculation that we could lose Iran’s supply, causing the price jump.

  99. rknicker says:

    How do the non-us airlines stay in business when they’re paying double what we do for refined fuels?

  100. Oil prices are high to some extent because of speculators and to a large extent because big institutional investors have few safe alternatives: 1) stocks and bonds are in bad shape 2) Treasuries are being collateralized with garbage paper thanks to Easy-Loan Ben Bernanke, so there’s increase in perceived risk (US Treasury bonds and notes used to be the safest investment on the planet), and 3) other commodities do not have the same demand. There will ALWAYS be a buyer for that barrel of oil. the other stuff? maybe. maybe not.

    Big jumps in commodity prices are largely, aside from obvious supply destruction like a huge crop failure, a signal of flight to safety, not the machinations of evil oogity-boogity speculators.

  101. JiminyChristmas says:

    @MadameX: That is not speculation. That is what’s called a ‘risk premium.’ What do you think the price of oil would be tomorrow if missiles started flying across the Persian Gulf? (Hint: Think $200/bbl or higher)

  102. JiminyChristmas says:

    @geeniusatwrok: 3) other commodities do not have the same demand.

    Um, have you looked at agricultural, precious metal, or base metal commodities lately? Gold now = $940/oz. This time last year: $665/oz. Corn now = $7/bushel. This time last year: $3.50/bushel.

  103. Trai_Dep says:

    I thought that the reason why some airlines were doing quite well was that they hedged (sorry, “speculated”) their fuel contracts to ensure a predicable cost structure. And this was why many of them aren’t belly up broke.

    Do the executives want us to rescind those contracts? Today? Really?!

  104. ninjatoddler says:

    How bout ending speculation once and for all? That way it’s fair to all the speculators and the airlines operators?

    You buy only what you need.

  105. ShadowFalls says:

    Does everyone seriously think that these new fees are going to disappear if oil prices dropped dramatically? They won’t. Why are these people not lobbying Congress? Is that not in a CEO’s job description? Seriously, most of us have more important things to do than worry about a company’s profit margin we have no stock in.

  106. Caslonbold says:

    @MadameX: Did the demand go up today enough to justify an additional $5 price increase? Nope. There is speculation that we could lose Iran’s supply, causing the price jump.

    NO – oil did not jump $5 because of a fear of losing Iran’s supply, it had to do with Iran posturing and power flexing their military muscle by test launching long distance rockets yesterday. The “fear” is that they will close or try to take control of the Strait of Hormuz which is a 21 mile wide shipping lane thru which the world’s oil travels. Who ever controls this shipping lane controls the flow of oil. Whenever there is any action of this sort in the middle east then the forces that be create a “fear” factor in order to raise the price of oil.

    The US keeps a fleet of ships in the area as do other countries and rest assured many things will transpire on Earth before anyone “takes control” of the Strait of Hormuz.

  107. artki says:

    > A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab

    This letter is an out-an-out lie and that excerpt is an example.
    The price does NOT go up with “each trade”. If the price would go up with each trade, then what FOOL would sell knowing that very same barrel of oil he just sold was going to bring a higher price on the very next trade?

    Futures markets are a ZERO-SUM game. The only way anybody can make a dollar off a contract is if somebody else loses a dollar off that contract. The speculators are taking money from each other, not from the consumer.

    Politicians have railed against speculators in futures before. They even banned futures trading in one commodity because they said it was making the price of that commodity too variable. Afterwards, that commodities price became even MORE variable.

    [online.wsj.com]

    The same thing would happen if you tried to restrict speculation in oil futures except there would be an additional penalty in that the US exhanges would lose all those lovely commissions (and they pay taxes on those commissions) as the speculators moved on to exchanges in other contries.

    BTW, Southwest isn’t complaining. They USED the futures markets to lock in the price of their fuel a long time ago.

  108. artki says:

    Whoops. Didn’t notice that Southwest signed. I guess they’re running out of the cheap aviation fuel they locked in last year. Doesn’t change the rest of my points.

  109. smarty says:

    How/Where do I go to open an account to speculate on oil? This will be fun!

  110. AnnC says:

    @smarty: Check out the oil futures market on the NYMEX

  111. @SigmundTheSeaMonster:

    Thank you. Well said.

  112. twitley says:

    I thought that some airlines hedged their fuel costs. Doesn’t that make them speculators too?

  113. SinA says:

    We need help breaking our dependence on foreign peanuts.

    I’m sorry, that didn’t really add anything productive to the conversation.

  114. KarmaChameleon says:

    I’d be happy to help the airlines. Of course, that help isn’t free.

    $25 Time Lost at Work surcharge
    $32.50 Printer Supply surcharge
    $10 Mailing fee

    Plus any applicable taxes.

  115. chichismcgee says:

    When I got this in my inbox this afternoon, this was literally my first thought:

    free market
    -noun
    an economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies.
    -Related forms
    free-market, adjective
    free marketeer, noun
    Dictionary.com Unabridged (v 1.1)
    Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.

  116. backbroken says:

    Why is The Consumerist reporting on a story that obviously came from The Onion?

    What’s that? It’s real?

    I’ll be damned.

  117. SinisterMatt says:

    @EBounding: I hope I’m around to see when these speculators get burned. Not literally, of course. But then again, if the bottom drops out of commodity futures, will the government bail them out like they did the housing market? “Think of the poor multi-millionaire hedgefunds managers who lost their jobs! Can we save them, can we?”

    /end sarcasm

    @lincolnparadox:

    I like that. Well done, sir. Can I use that, or a similarly crafted letter?

    Cheers!

  118. lincolnparadox says:

    @SinisterMatt: Use as much as you like. If it gets things changed, I’m happy to assist.

  119. Cluepon says:

    “There has grown up in the minds of certain groups in this country the notion that because a man or a corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit.” — Robert Heinlein

    The bottom line is, the free market system has been subverted time and again by the airlines. They refuse to adapt to changing markets, and refuse to adapt to the needs of their customers. They are under the impression they can just run on, as usual until it’s time to ask the government for another handout, at taxpayer expense. This, more than anything should infuriate the public into action.

    If the airlines, (or for that matter, any other business) can’t compete with their current business model, then they should change the model, or fail and die. Corporate welfare needs to end.

  120. guymandude says:

    Fuck em. When people wanted reasonable accommodation from the airlines they couldn’t have been less interested in cooperation. So let them perish. Like any other niche in nature someone else will move in a fill it. Perhaps they will be smart enough to see the writing on the wall and learn that their customers, not oil, are their lifeblood.

  121. Fist-o™ says:

    Will somebody please explain one thing to me?

    What is “Excess Speculation”?

    How does this cause my gas to cost more?

    Who decides what is excessive?

    I’m sorry but this just sounds like corporations crying to Washington once again, asking congress to fix their problems, and disguising it as a grass-roots, “We The People”-type campaign.

    I WILL NOT sign any petition unless I UNDERSTAND FULLY the implications of it.

  122. Fist-o™ says:

    Er, sorry, I guess that’s 3 things. :P

  123. Fist-o™ says:

    Here’s the letter I SENT using THEIR FORM

    Dear Representative,

    You may also be receiving many letters, e-mails, and phone calls asking you to intervene in some aspect of the current housing market, so-called “Mortgage Meltdown”, and a generally bearish market, coupled with a possible recession, and now, the latest, “Excess Oil Speculation”.

    I cannot claim to understand the myriad of market forces in the oil / energy commodities market. I must rely on experts to take care of that for me, as I imagine you do as well. I also understand that very little can be done to predict future market trends.

    The purpose of this letter is to inform you that I, and most undoubtedly many other constituents, are well aware that economies go up, and they go down. Market forces act, and react. Corporations make bad decisions, that affect many people and involve billions of dollars. However, I feel that this does NOT JUSTIFY government intervention, especially the panicked, “Knee-Jerk Reaction” type of legislation that so many parties are rallying for.

    I urge you to consider the situation, and take the action which requires the LEAST amount of government intervention necessary. Congress may pass regulatory laws that are meant to correct or aid the current market situation, but ultimately, such government intervention in a Free Market will only harm its healthy operation.

  124. darkryd says:

    Dear Airline executives: please wait while I put you on hold and transfer you to customer service – Your call is important to us….

  125. sirellyn says:

    The price of oil isn’t due to oil speculators! I don’t know how more clearly it can be spelled out. The US dollar and most of the currencies that are still tied to it are FALLING in value! The US government has printed a crapload of money in the past few years. Those people in the oil countries are some of the first to notice the dollar THEY are tied to is more plentiful and thus worth less. Because they can’t raise their currency (see tied to US dollar) they have to raise the price of their commodities. See oil.

    Commodities are the most BASIC form of MONEY. Remember barter? SOME commodities can go into a “bubble” if they are forcibly needed. But if ALL commodities rise in price it isn’t a bubble!!!

    And if you think oil has been rising in price check out the price of Palladium. In 2003 it was around 300 bucks and Oz. Now in 2008 it’s about $8000!!! Yes thats more than 25 times its value 5 years ago!

    Everything is so expensive because the US government keeps printing money and diluting the value of your money!

  126. Tmoney02 says:

    @sirellyn:
    But it is so much easier to blame some boogeymen for bad things then expect ourselves or government to make responsible and possibly tough decisions. I have my pitchfork ready, who still sells torches?

  127. dopplerd says:

    How many of these CEO’s do you think use public trans or ride a bike to work? I’m guessing there are a lot of Mercedes SL65s sitting in their reserved parking spot at headquarters.

    The mirror is the best place to find the culprit causing high gas prices. We can scream about oil companies, war, speculators, etc. but until we address the consumptive car culture WE ascribe to the cost of oil will be high.

    Don’t complain unless you are willing to personally make changes toward lowering demand. This means YOU. Something like 90% of Americans think public trans in a good thing, for someone else. This has to change. Carpool, bike, raise fuel economy of your car, have a staycation. This problem was caused by millions (billions?) of people making many small decisions to consume oil and will only be solved once millions of people make small decisions to conserve oil. There is no “one thing” that will lower gas prices, the problem is that it is millions of little things.

  128. MadameX says:

    @dopplerd: I couldn’t agree with you more–Americans need to change. My husband and I carpool to work every day and try to do our grocery shopping on the way home, rather than making a separate trip. My husband has started running E85 in his FlexFuel vehicle, and as soon as the automakers put a new car on US soil that gets comparable numbers to the European diesels, I will be replacing my 22MPG car with one that gets 50+ (and hopefully running biodiesel).

    And let’s not start the “ethanol isn’t green” argument. For us, its more about sending a message to big oil by cutting as much petroleum as we possibly can.

  129. SAGoon987 says:

    @MadameX: Please research flexfuel. One of them is really bad and has terrible energy/mpg returns. The other, which for some reason I recall being EU only, is actually alright.

  130. FLConsumer says:

    DEAR AIRLINE CEOS:
    You scratch my back, THEN I’ll scratch yours. Remember, I’m the paying customer. You want my money. Make it worth it to me. Start treating me as the life blood of your business rather than a parasite. Stop all of the arcane rules, treat me with respect, charge an honest price (sans extra add-on fees), and get me to where I need to be without hassle and excuses.

    You do that, and I’ll be more than happy to help you out. Until then I’ll treat you like you’ve been treating me — you’re on your own.

  131. masterthundar says:

    Speculation does not raise prices…that’s a myth to take blame away from where it belongs: on Arab producers inflating prices by decreasing supply as demand rises. Just as speculators “bet” on the price to be high, some “bet” on a lower price. If it goes down, some win, some lose, and vice-versa. Commodity speculation is the stock market version of Vegas, and it is certainly not responsible for 30-60% of prices. We would realize this if we began drilling for our own oil on our own turf and seeing how much the increased supply brings down prices.

  132. Nick_Bentley says:

    Oil speculation is one of the biggest things driving up the price of oil. People invest in it, knowing they will know they won’t use the oil, it’s just because the price will go up and they will make money from the people who need it.
    The answer is to cut out the speculators who drive up the price, it’s the only reason they exist. If you buy oil on the market, you have to prove that you will use it, not just resell it. It’s amazing in it’s simplicity, but it will cut the price we all pay by a lot.

  133. Nick_Bentley says:

    Look, they are right for one time. Speculators should be taken out of this market one time and for all. They just buy the oil and resell it for a profit with no intention of using it. All they want to do is jack up the price the rest of us pay and I won’t deal with it. Only sell it to a company that can prove they will use it.

  134. Robert Isbell says:

    let the airlines rot in hell, they’ve been given too many bailouts and breaks. the owners need to pony up all the money they’ve been raking in if they want to stay in business.
    I hope every one of them goes belly up, and the owners get nailed to the proverbial wall.

  135. liquiddamage says:

    Let the shitty airlines die first: American, United, Delta, US Airways… Then assuming the airlines are correct, we should fix the oil speculation.