Traders set the specific price at any moment, but there are numerous traders, they don't operate as a bloc, and each one is out for his own profit, with greater profit for one meaning lower profit for another in many cases.
Oil trading is too big of market for anyone to corner the market. If some trader wants the price to go up, so he won't sell, well someone else can undercut him. A larger trader might possibly be able to manipulate the market so he makes a short term profit, but short term manipulation for profit is a lot different, and a lot easier, than driving the oil price greatly up for months and years.
Now if traders in general get the idea that oil will be scarcer relative to demand in the short to mid term future, they will buy (likely buy futures for future delivery, but they could actually buy oil and sit on it if they wanted to). If they are right they smooth out the price increase, causing some of it to happen earlier, and reducing the amount that happens later. If they are wrong they risk losing their shirt. Either way the market will tend to drift back to the price dictated by the fundamentals of the market. If you have a widespread incorrect view of future supply and demand it will drive up prices for a time, but that's not the same as traders simply being able to directly in a controlled intentional way control prices, simply setting what oil will sell out by conscious decision.
He doesn't want to mandate fuel efficiencies but does favor "mandating" higher gas taxes.
That amounts to less government control. Everyone gets to decide how they will deal with the higher prices, rather than having the government decide for them. |
