Oil Prices Need Government Supervision

The bankers have Britain's Gordon Brown and France's Nicolas Sarkozy so deep in their pockets that they have to pump daylight down to them. For proof one need look only look at how eager the pair is to push their respective economies, already clinging by the fingernails, off the cliff into certain depression at the behest of their corporate masters.

The despicable duo released a joint statement which amounts to a manifesto by government to take over the oil industry and keep the prices high. As you can guess it took a lot of tortured reason and it's logic is child's play to dispatch with, but will do the exercise anyway.

For two years the price of oil has been dangerously volatile, seemingly defying the accepted rules of economics. First it rose by more than $80 a barrel, then fell rapidly by more than $100 before doubling to its current level of around $70. In that time, however, there has been no serious interruption of supply.

Here ignorance and arrogance mingle dangerously. The rise and fall did defy accepted rules of economics, the ones economists and financial institutions in the credit markets play by, but not the ones Goldman Sachs plays by. Goldman it's well known has the largest commodities trading floor in the world which regularly raids those markets reaping huge takes from wild volatility. Any floor trader or blogger knows this, but Nicolas Sarkozy and Gordon Brown pretend that they don't. Menacing.

In that time, however, there has been no serious interruption of supply, a condition governments find untenable, because it leaves them on the sidelines out of sight.

The oil market is complex, but such erratic price movement is cause for alarm. The surge in prices last year gravely damaged the global economy and contributed to the downturn. The risk now is that a new period of instability could undermine confidence just as we are pushing for recovery.

The oil market is simple supply and demand, Goldman's market manipulations injects the complexities of which government is ignorant or complacent, good reasons both for you two to butt out.

The price surge did no did no damage, because it could not. The global economy was already gravely damaged last year, the surge in prices was the result of manipulation by Goldman Sachs and the bubble itself, it was a symptom rather than a cause of the bubble. Free free market pricing is the only thing that will bring stability to the oil markets. If governments intervene there is no risk of a period of instability, it is a certainty.

Governments can no longer stand idle. Volatility damages both consumers and producers. Importing countries, especially in the developing world, find themselves committed to big subsidies to shield domestic consumers from potentially devastating price shifts.

Governments must stand idle, it is the best they can do anything else just adds weight to the load.

In Britain and France we know how the price of crude dictates the price of petrol at filling stations -- and the effect it has on families and businesses. And for countries heavily reliant on income from oil exports, the windfalls from brief price surges are offset by the consequent difficulties of planning national budgets and investment strategies.

That means I want to keep my government job. But governments are impotent in free market affairs, rather than acknowledge it they make matters much worse.

Extreme fluctuations in price are encouraging energy users to reconsider their reliance on oil. The International Energy Agency, for instance, has cut its long-term forecast of oil consumption by almost a quarter. Producers are in danger of finding out that oil is losing its market and its long-term value.

High prices rather than an extreme fluctuations are encouraging energy users to cut back on oil thereby pressuring prices downward. The downward pressure minus Goldman Sachs meddling will stabilize oil prices.

How much hope can French and British citizens have when Brown and Sarkozy say what they must do, then do exactly the opposite.

We are committed to the ongoing dialogue between producers and consumers through theInternational Energy Forum. Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC) have expressed interest in this as well. Producers and consumers are closer now than at any time in the past 30 years to recognizing the huge common interest in giving clear and stable signals to long-term investment.

It's no ones fault, but the world is not always fair nor the choices clear-cut.

Nicolas Sarkozy has demanded Iran free a French teacher detained after taking photos of protests and dismissed accusations she was spying as "high fantasy".

Gordon Brown described the continuing detention of four British Embassy staff in Iran as "unacceptable" and "unjustified".

Yea Ok , that's going to do it!

There will always be conflics especially between consumer and producer nations, but even in the midst of that conflict those nations will seek the best price in the open market providing the price stabilization you two pretend to want.

More immediately , we as consumers must recognize that abnormally low oil prices, while providing short-term benefits, do long-term damage. They diminish our incentives to invest not only in oil production but in energy savings and carbon-free alternatives.

Low oil prices do long-term damage! Britian and France are in trouble. Now we know what Sarkozy and Brown mean by price stability, but still wonder who they work for and for how much.

Upstream investment world-wide is already down by 20% over the past year. And with some sources of supply in decline, such as Alaska and the North Sea, the resource we will all need as the economy recovers is being developed in neither an adequate nor a timely way.

Investment world-wide is down because there isn't as much oil as there used to be, heard of peak oil dummy. Oh just when will that economy recover, any idea bright guy? That's what I thought.

There are no easy solutions, and any progress must be made with the full cooperation of the world community and the oil industry. On Monday, we used the U.K.-France summit in Evian to explore a way forward. We hope our ideas inform meetings today at the G-8 summit in Italy, and in future talks between world leaders.

At the London Energy Meeting last December, all participants agreed that closer coordination between the International Energy Agency, the International Energy Forum, and OPEC was necessary to develop a shared analysis of future demand and supply trends. The Expert Group of the International Energy Forum should take the lead in establishing a common long-term view on what price range would be consistent with the fundamentals.

The Free free market does that all by it's little self. What you are trying to disguise is market manipulations.

These experts should also consider any measures that could be put in place to reduce volatility. And they should look again at whether trading activity is amplifying erratic price movements.

We therefore call upon the International Organization of Securities Regulators to consider improving transparency and supervision of the oil futures markets in order to reduce damaging speculation. This would serve the interests of orderly and adequate investment in future supplies, since volatility and opacity are the enemies of growth. Climate change is also altering government attitudes to energy.

They need not look again at whether trading activity is amplifying erratic price moving trading activity especially by Goldman Sachs is exactly producing erratic price movements. But the only measures any experts can put in place to reduce market volatility is to keep manipulation out of the markets which is something that governments actually can do, but choose not to. How do you know governments choose not to keep manipulation out of the markets? Because there is manipulation in the markets.

The world's economy is still reliant on secure supplies of oil at prices that are not so high as to destroy the prospects of economic growth, but not so low as to lead to a slump in investment, as happened in the 1990s.

If oil companies want to slump their investments as happened in the 1990s, then let them, that is where free-market capitalism is all about. The oil companies know what the return on a dollar invested in exploration is and whether or not it is worth it. Increasingly it is not, but who are you to tell them in one way or the other.

It is a thorny issue, but complex markets need not be volatile or damaging to the wider global economy. We are convinced that producers and consumers alike would benefit from greatertransparency, greater stability and greater consensus on the market fundamentals. After two years of destructive price volatility, the time has come for both sides to work together to build on our common interest.

It's a distracting issue, because the oil markets are not that complex. It's a simple matter of supply and demand in which the free market provides fair and stable prices for free. Greater transparency is the only thing producers and consumers alike would benefit from and your governments by passing laws could provide them any time they wanted.