The price of fuel is driven by the hedge funds.Qantas for example bought todays fuel a few years ago at much lower prices.This buying of fuel based on futuristic price inflates it's real value.Now what the various hedge funds must do is, predict future oil prices.If Qantas for example buys at today rates,they could put themselves on the road to economic ruin if prices begin to fall.

If Saudi Arabia and others produce more oil and the refinery capacity is there,the price could suddenly collapse.

There is plenty of energy on the planet.It is just the opportunists screwing us as they have done so in the past,only this time,under the subtefuge of peak oil and the green movements CO2 guilt trip,they are doing it with impunity.

"There is plenty of energy on the planet.It is just the opportunists screwing us as they have done so in the past,only this time,under the subtefuge of peak oil and the green movements CO2 guilt trip,they are doing it with impunity."

I agree. The opportunists are screwing us. That's what you get when you let governments hand over power to the markets as we have over the last few decades. 'Opportunists' is far too benign a term though; I'd call them leeches or fraudsters.

I question your statement that there's plenty of energy on the planet. The amount of energy that is accessible, affordable and safe is far from plentiful, especially in relation to our ever-growing and seemingly insatiable demand.

I also question your cynicism on peak oil and global warming.

I agree, particularly about CO2 alarmism being involved. Because of this new refineries aren't being approved. Neither are new power stations, so we can expect powerr shortages in a few years.
CO2 is a grennhouse gas alright, albeit a rather minor and ineffective one. It accounts for about one degree of the 33 degrees warming caused by all of the greenhouse gases (this total warming is mostly due to water vapour in the atmosphere, and without it the world would be a very bleak place indeed.
The CO2 alarmists get their projections from their computer models by assuming positive feedback from water vapour after there is a slight increase due to CO2.This is by no means certain and the feedback is just as likely to be negative, which is what one would intuitively expect in a dynamic equilibrium system such as the world climate.
One thing the alarmists try to deny is the historical record about things that can only have been true if the temperature (in the northern hemisphere at least) was higher in the past than it is now. Specifically they try to marginalise the Medieval Warm Period 900-1400 AD about which there are inumerable records showing it was hatter then (and there was no emission of carbon dioxide by burning fossil fuels. Such things as Greenland actually being green and able to be colonised, supporting the growing of crops on land that is now permafrost. Vinyards flourished in Northern England and Scotland. The records of French winegrowers show that the growing season was about 3 weeks longer than today. Chinese sailors voyaged through the NortWest Passage, and so on.
We will all pay a heavy price in higher costs and lower living standards if we allow our politicians to continue down the path popularised by Al Gore and a few self-interested environmental scientists.

Arjay - Entering a hedge agreement is a voluntary action. There is no government compulsion or regulation requiring companies to do so

Fact most airlines buy oil on a hedged price
Fact most gold production companies sell gold on a hedged price

Why – because they recognise their core business and associated skills sets are in the areas of running airlines and running gold mines, not in the area of commodity broking.

They also recognise that having a secure cost price or selling price allows them greater discretion in managing their operational plans, instead of doing knee jerks operational adjustments to accommodate wild changes in costs or revenues.

Another fact hedge businesses work on a margin. Different hedge managers buy and sell futures in competition with other hedge funds, thus no one operator has exclusive control of the market, unlike Michael Milken’s Junk Bond securities, which were unquoted securities susceptible to manipulation by a single authority.

Bronwyn “That's what you get when you let governments hand over power to the markets as we have over the last few decades”

Governments are the worst. They used to manipulate the exchange rate and cause all sorts of messes by trying to keep to a particular exchange value for reasons of national pride or export competitiveness (China for instance).

The OPEC cartel is not a cartel of oil production companies, it is a cartel of oil producing governments.

I guess when equipped with ignorance, it is easy to see bogey men and pretend that a government trampling around spending tax payer dollars is a viable alternative to companies with particular skill risking their own stock holders funds but I do recall Tri-Continental, when the Victorian government entered the funding business as a lender of last resort. They made lots of high interest rate deal but forgot, return is a function of risk and they lost 3 billion dollars of Victorian tax payers funds ($1,000 for every man woman and child, at the time).

If you think governments managing markets solves anything, you are sadly mistaken.

Col

"I guess when equipped with ignorance, it is easy to see bogey men.."

My ignorance Col is debatable. One thing is certain though; it is definitely exceeded by your arrogance.

"If you think governments managing markets solves anything, you are sadly mistaken."

I didn't say anything about governments managing markets. I made the point that governmnents have handed over too much power to the markets. And in a market like today's, which is increasingly dominated by fewer and more powerful players, national governments and us their voters are being left in an increasingly powerless situation as a result. The fuel crisis is a perfect example.

"..it is easy to see bogey men and pretend that a government trampling around spending tax payer dollars is a viable alternative to companies with particular skill risking their own stock holders funds.."

To begin with, governments don't pay their executives obscenely extravagant salaries. Governments also aim to satisfy a wider range of interests than companies do, including that of the disadvantaged and of future generations. This is much more likely to lead to better overall outcomes than the narrow focus of aiming solely to increase shareholder profit. Especially when we realize that the majority of shareholders are in fact other large corporations.

The situation would be a lot more mild and reasonable if there was no war in the Middle East. Those who went to war in the middle east savagely attacked our domestic economies at the same time.