Where are the calls for congressional hearings for predatory price dumping on oil?

[Axulus]

With oil plunging 10% today, putting the price at a level that is expected to result in bamkrupticies of several shale oil drillers ($70/bbl is seen as a break even floor for many small projects), where are the calls to investigate the greedy oil specilators and the oil executives for their predatory price dumping? Where are chuck shumer and bernie sanders and their ilk calling for investigations? Or is it ok when companies fail due to the challenges of the market (and speculators) when price drops and evil when the price goes much higher and it happens to pay off big for a year or two (deapite potential price plungea at any moment)?

 

[RVonse]

When oil price goes down there are winners and there are losers but the winners far out number the losers. And in theory, government's goal is to serve the greatest good of the population at large in favor of small groups or special interests. That would be my explanation as to why no one is complaining right now.

Do we even know for sure why oil prices plunged today? If a crime or fraud was committed, I for one would have no problem going after that individual at all. And I seriously doubt Bernie Sanders would either.

 

[laughing dog]

Unless there is any evidence that the current level of oil prices is due to firms trying to force competitors out of the market, there is no reason that there is predatory pricing occurring.

Plus the House of Representatives is under the control of the putative free-marketeers (Republicans) who revere prices as the result of theological pure forces.

 

[Axulus]

When oil price goes down there are winners and there are losers but the winners far out number the losers. And in theory, government's goal is to serve the greatest good of the population at large in favor of small groups or special interests. That would be my explanation as to why no one is complaining right now.

Do we even know for sure why oil prices plunged today? If a crime or fraud was committed, I for one would have no problem going after that individual at all. And I seriously doubt Bernie Sanders would either.

Economic analysis suggests that prices that are too low can be just as welfare reducing to society as when prices are too high. This could happen, for example, if it causes current wells to shut down or new investment to be bypassed due to the low prices and is also combined with the new, lower output levels failing to meet future demand (because perhaps demand is higher than anticipated or supply is cut off more severely than anticipated). Yet absolutely no one ever seems to be concerned about this possibility.

In any event, the consensus is that the current plunge is the result of OPEC's decision to "stand pat" on production levels despite the large price declines in recent months. Speculators who bet on such a move were wrong (their bets in the past would cause unnecessary excess inventories to be accumulated in anticipation of such a cut), as well as the general perception that OPEC's influence is significantly reduced, meaning more oil production than expected, which means lower prices due to more future supply.

 

[Axulus]

Unless there is any evidence that the current level of oil prices is due to firms trying to force competitors out of the market, there is no reason that there is predatory pricing occurring.

Plus the House of Representatives is under the control of the putative free-marketeers (Republicans) who revere prices as the result of theological pure forces.

Why the double standard? If greedy speculators are blamed for driving the price too high beyond the societal welfare maximing level and deserve to be investigated or stopped as a result, then they should also be blamed/stopped/investigated when their greed drives prices _below_ the societal welfare maximizing level (on the basis of the same quality of evidence: increased price volitility and price trends strongly in a single direction over a short period of time, which is considered sufficient evidence by chuck shumer and barry sanders to drag in oil ceos, regulate derivatives marketa more strongly, and initiate full scale investigations by the FTC).

Last I checked, the republicians having more seats doesn't mean members of the minority party are silenced and can't call for investigations.

Or maybe the Republicians should be calling for the investigations, seeing as their oil buddies are presumably fuming at the lower prices.

 

[laughing dog]

Unless there is any evidence that the current level of oil prices is due to firms trying to force competitors out of the market, there is no reason that there is predatory pricing occurring.

Plus the House of Representatives is under the control of the putative free-marketeers (Republicans) who revere prices as the result of theological pure forces.

Why the double standard? If greedy speculators are blamed for driving the price too high beyond the societal welfare maximing level and deserve to be investigated or stopped as a result, then they should also be blamed/stopped/investigated when their greed drives prices _below_ the societal welfare maximizing level (on the basis of the same quality of evidence: increased price volitility and price trends strongly in a single direction over a short period of time, which is considered sufficient evidence by chuck shumer and barry sanders to drag in oil ceos, regulate derivatives marketa more strongly, and initiate full scale investigations by the FTC).

Perhaps they understand that it is extremely difficult (if not impossible) for speculators' to engage in predatory pricing. Perhaps they are hypocrites. Perhaps they believe that lower prices which are still above the real marginal cost of output is welfare-enhancing.

Last I checked, the republicians having more seats doesn't mean members of the minority party are silenced and can't call for investigations.

See above.

Or maybe the Republicians should be calling for the investigations, seeing as their oil buddies are presumably fuming at the lower prices.

If Republicans revere prices as the result of theologically pure forces, they would be inviting the wrath of their god(s) upon them for doing so.