This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

BP, Chevron, Exxon Deserve to Suffer by Ending Oil Speculation

NEW YORK (TheStreet) -- There is a way to ease income inequality, save the environment, protect the U.S. dollar and spur economic growth -- the Obama Administration must curtail excessive speculation in oil.

According to Rex Tillerson, CEO of Exxon Mobil (XOM - Get Report), speculating has the price of oil higher by about 50%. To end that, Congress should pass the legislation sponsored by Sen. Bernie Sanders (I-VT) and Sen. Bill Nelson (D-FL) and President Obama should sign it immediately.

Read More: Jeff Bewkes Walked Away From at Least $95M Cash in Murdoch's Fox Deal

According to Sanders, all that is required is for "the Commodity Futures Trading Commission to impose strict limits on the amount of oil that Wall Street speculators could trade in the energy futures market..." If that were to happen, and the price of oil to fall, there would be many immediate gains in the U.S. and worldwide.

For low-income households, the cost of fuel for transportation and heat hits very hard. Reducing the cost of oil heat or gas at the pump would allow for a higher standard of living for the low income. More could be saved and there would be a greater amount of discretionary income to spend elsewhere.  It is difficult to argue against that looking at the millions made by leaders at Exxon Mobil, BP (BP - Get Report), Chevron (CVX - Get Report), and other oil giants.

Meanwhile, the more the price of oil falls, the less attractive coal is a fuel. There is no better way to ease the strain on the environment than to reduce the use of coal for power. But due to the high cost of oil, coal has increased in usage more than any other form of power over the last decade. Coal now supplies about 40% of the world's electricity. Cheaper oil would change that immediately!

The weaker oil is, the stronger the American dollar.

Read More: 4 Stocks Warren Buffett Is Selling in 2014

I've written about how oil is becoming a new safe haven asset. That is not good for the greenback. The United States needs to have a robust currency as heavy deficit spending with a weak dollar is a prescription for disaster. This confluence results in having to borrow more and more with a weak currency.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BP $39.84 0.58%
CVX $106.90 2.51%
XOM $85.63 2.45%
AAPL $126.37 2.53%
FB $83.20 -0.13%

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs