Welcome to the 53rd edition of Carnival of Maryland where blogging aficionados congregate. The best of the best in Maryland join here today to imbue insight, wisdom and eye candy for the less fortunate among Marylanders whom rely on the Sun papers f…

“You are the only one talking about a windfall profits tax that was proposed almost a year ago and hasn’t been promoted since yet.” Just wait, it will come back.

If the oil companies are threatening to close facilities because profit margins are too narrow, isn’t that being prudent in business? It makes them no different than Starbucks. Nor have all of the speculators truly run for the hills, they’re simply trading in a more realistic price range. As with all markets, some made a killing while others got killed.

Yet oil companies are still looking for supplies. My friend Jane from API sent me this yesterday. She’s actually quite a nice lady, don’t let the fact she works for the “greedy” oil industry fool you.

Perhaps the study I used is indeed propaganda based on computer modeling. However, if you believe that then wouldn’t all the computer models which predict global warming if we don’t retreat from the use of fossil fuels also be propaganda?

I know I’ve thrown in a number of specious arguments but I’m still hammering home the larger point which you still really haven’t addressed.

I didn’t say they shouldn’t make money, but they were spoiled for awhile, and now that times are tough, their true colors are showing. They couldn’t care less about an abundant supply of oil and gas that would stabilize the price now that the speculators have run for the hills. Their is so much oil out there that it is sitting in tankers because their is no place left to store it. Gas prices are going up because of the limited capacity of refineries, and those companies are canceling expansions and threatening to close facilities because profit margins are too narrow.

You are the only one talking about a windfall profits tax that was proposed almost a year ago and hasn’t been promoted since. Your “study” is API propaganda.

You’re focusing on the oil industry aspect of the article, but not the idea of a windfall profits tax. And you also talk about the widespread speculation in the oil markets, which reinforces my point of basic economics. Why do you think the futures were bid up so high – isn’t that a future prediction of supply and demand? The speculators were obviously anticipating that supplies would continue to be outstripped by demand, thus the price went higher. But then they guessed incorrectly because demand softened.

You also seem to think that oil companies should operate as charitable entities and not be profitable. Since a nice little percentage of my 401.k is based on Exxon/Mobil stock I’d like them to prosper too. In fact, some of these “speculators” you speak so ill of are those same entities who are attempting to fund the retirements of a number of Americans.

So are you telling me that only the government is allowed to prosper?

Your contention that $4 per gallon gasoline was based on simple supply and demand has been proven wrong by many sources confirming widespread speculation in the oil markets.

And if the oil companies are so concerned with maintaining a free flow of products to U.S. customers, then why are they delaying and canceling exploration projects, as well as threatening to close refineries if the price does not go back up to a more profitable level.

Energy prices have become more volatile due to the fluctuations in the futures contracts. These fluctuations are magnified near month end as the front month contract rolls over. Traders who are short the market must cover their positions, which causes an increase in the demand for futures, not oil or gas. As the month continues, the price will gradually decline until the contract positions again become an issue. It is much like the triple witching that you hear about with options on the stock market. Stock prices are determined more by options contracts than by fundamentals.

You can also complain about the unions that are threatening to strike at some refineries in the south. Capacity utilization at refineries is also more important to gas prices than the supply of oil.