What Happened To Those Nasty Oil Speculators?

The price of crude keeps dropping -- falling below $43 for a barrel of crude today, as reported by Reuters -- and I have been seeing gasoline listed for $1.69 a gallon around Boston. Heating oil is going way down, and I feel like a chump for jumping at the chance to buy 200 gallons at $2.82 a month ago, fearing that the price could rise despite downward pressure from the market. I just checked, and many dealers are selling it for $2.00 or lower.

It's hard to believe the difference between today and just a few months ago. I paid over $4.00/gallon to fill my tank this past summer, and I was very concerned about the cost of heating oil this winter. The news was filled with talk of crude oil prices hitting nearly $150 per barrel, and politicians were falling all over themselves to blame oil speculators:

Senator Barack Obama called Sunday for tighter regulation of oil speculators in an effort to ease record high energy prices... Mr. Obama, the presumptive Democratic nominee, proposed closing the so-called Enron loophole, a legal provision requested by that company in 2000 that exempts crucial energy commodities from government oversight; preventing traders of American crude oil from routing transactions through offshore markets to evade American limits, and working with other countries to better regulate the oil futures markets.

“My plan fully closes the Enron loophole and restores common-sense regulation,” Mr. Obama said in a statement.

--from June 23, 2008

No regulations have been passed so far, and yet prices are plummeting. Could it be that speculators didn't cause the price jumps in the first place? Could it be that regulation isn't always the answer? I would say that it's never the answer, but one would think that even a politician would see the writing on the wall in a particular case as glaring as this one. The markets should be left free to operate once in awhile, no?

Well, no. Not according to Mr. Obama's Change.gov website, the official home for the fictional and powerless Office of the President-Elect. From a brief review of the "Obama-Biden comprehensive New Energy for America plan," we learn the first item in the list is to:

Provide Short-term Relief to American Families

• Crack Down on Excessive Energy Speculation.
• Swap Oil from the Strategic Petroleum Reserve to Cut Prices.

This raises the question of whether his website is simply out of date, or if Obama still has oil speculators in his sites. I'd guess most of them lost their shirts unless they shorted oil futures, so they probably won't be able to put up much of a fight. I'm leaning towards the view that the Change.gov website is out of date, because calling for tapping the Strategic Petroleum Reserve is absurd at this point. Well, unless it's part of Obama's "Short-term Relief" plan to make sure American families pay only 50 cents per gallon to fill their tanks.