Col,you assume too much.I made no mention of Govt regulation.The major problem with world energy is that the power is in too few hands.There is not enough competition.We have to diversify our sources of energy and break the power of the oil cartels.

Bronwyn “I didn't say anything about governments managing markets.”

Quote your previous post on this thread

“when you let governments hand over power to the markets”

Which part did I miss?

I recall the Wilson/Callaghan socialists in the UK trying to manage everything they could grab, all a fraud and almost broke the Bank of England,the IMF to coming in to bale UK out of the mess created by the incompetence of the swill humpers.

“The fuel crisis is a perfect example”

The fuel crisis is a "crisis" as a result OPEC "Governments".

“governments don't pay their executives obscenely extravagant salaries.”

They waste obscene amounts of money on pointless actions designed to sustain their omnipotence with no accountability by way of productive results or meaningful outcomes, we call it “taxation funded welfare by the nanny state”.

“Governments also aim to satisfy a wider range of interests than companies do,”

Interests which suit the electoral needs of a “here-today-gone-tomorrow-politician”.

Most companies I know have a defined and vested interest in the well being of their staff, clients and suppliers, I know you might find that hard to understand but a business plan can only function if you have suppliers to supply the ingredients which your staff add value to and sell to your customers.

“majority of shareholders are in fact other large corporations.”

The shares of whom are owned, ultimately, by… People.

Arjay – I was alluding to the voluntary nature of hedging.

“There is not enough competition. We have to diversify our sources of energy and break the power of the oil cartels.”

That is obvious, in fact the problem is the majority of the worlds oil supply is regulated, by agreement, through the OPEC cartel, an organization of sovereign states which runs the monopoly to suit their own agenda.

What do you suggest, taking Saudia Arabia or Nigeria to court?

They are the folks who regulate, by supply, the price of oil, not the hedge fund managers who provide some "predictability" to supply or buy prices for those businesses who find commercial comfort in using them.

Nope, supply and demand, drive the price of oil. Hedge funds
simply reflect what the market is telling them. If they get
it wrong, they lose bigtime.

The West only have itself to blame, relying on oil that was
far too cheap and basing our whole Western economy on it.
Now that cheap supplies are drying up, people are running
around like chooks with their heads cut off.

If the West continues to base its whole economy around cheap
oil from the ME, they will learn the hard way.

Clearly people need pain to learn.

Yabby the oil is not drying up.There is plenty of oil for the next 60yrs.The hedge funds work on anticipation and the frenzy is feeding off itself.The Middle East also is slow to produce along with the oil refineries.All these factors and so called environmental considerations are creating artificial shortages.
Your energy shares might be doing well now,but if a world economic collapse happens,oil shares will do likewise.

*There is plenty of oil for the next 60yrs*

Arjay, iron ore or coal are not about to run out either, but
their prices have tripled. That had nothing to do with hedge funds.

The thing is, its a long way from knowing that there is oil somewhere,
until its in your car. People talk of the Brazil find. That could
take 10 years to develop. People talk of oil sands and shale, they
will take years to increase in volumes, etc. etc.

What drove iron ore and coal up so much, was when the crunch came,
as to who could supply a boatload tomorrow, there were simply alot
more buyers then sellers. The same applies to oil. People can't
say, well I will leave it and not buy any. They have to buy.
So its a sellers market, not a buyers market. Sellers can afford
to say no, I won't sell for a few days, unless the price is higher.

In a sellers market, the sellers dictate the terms, not the buyers.
That is what happened to coal. They had floods in Queensland, so
force majeure applied to the mines for a while. Steel producers were
desperate for coking coal. When supplies came back on stream,
the Aussies named their price, 200% price increase, the buyers
had to wear it.

With China, India and other countries sucking ever more on the oil
teat, production capacity is just not there to produce more, so
prices go up.

Never mind, it will teach us to learn to cope without oil.

This one will only cost you 1c a km :)

http://www.teslamotors.com/index.php

.

Arjay, to cheer you up, the experts are saying that oil will
probably trend down to 100-110$, before going back up again.

There is buyer resistance developing, people are actually using
a bit less, thinking twice before they hop in their cars, some
airlines are cancelling some flights etc.

But watch the trend towards electric plug in cars. GM have
the Volt coming, in 2010. Now Mercedes have announced, that
they will have a model out too, in a couple of years or so.

All large car manufacturers are working on purely electric
models. The Tesla shows the potential that is there, in terms
of technology.

Meantime, if you have a few pennies to spare, copper mines
should do well out of electric cars, so should anyone mining
lithium.

If enough people switch to electric cars, that in fact will
have an effect on oil prices. Prices will be lower then they
would have been, had we all kept pumping petrol. That is
the very idea of market economics.