Securities Analyst Says Buy Oil Stocks, Futures Before the Post-Election Price Rise
Santa Monica, CA — Who believes that oil and particularly gasoline prices dropped for political reasons in the runup to the Nov. 7 mid-term elections? Oil and gas investment advisers, that’s who, said the Foundation for Taxpayer and Consumer Rights. Similarly, they predict that prices will shoot up after Nov. 7.
In mid-October, New York Global/Securities published strong advice to buy “oil stocks and futures” to take advantage of a nearly certain post-election price increase. The column by Phillip L. Miller (see http://www.consumerwatchdog.org/energy/rp/?postId=7023 ) mentions previous price dips that followed Senate hearings and investigations, particularly post-Katrina and this summer amid a similar price spike. The column contains a persuasive chart matching Congressional interest in oil and gasoline prices to subsequent dips in the price of crude oil. Then, when the heat came off, up went prices again. Similarly, “[A]fter the elections we believe oil will appreciate until there is fear in the market that Congress will take action,” says New York Global, an international investment banking and securities company.
“What this means is that big traders are now being advised to place their bets on political manipulation of the oil markets,” said Judy Dugan, research director of the nonprofit, nonpartisan FTCR. “There could be no stronger reason for government to demand public transparency in oil trading markets.”
Oil companies have an even more direct hand in the price of gasoline, which shows similar “election effects,” said FTCR, citing evidence of election-time manipulation in the last three national election campaigns. See FTCR’s news release and charts at www.consumerwatchdog.org/energy/pr/?postId=7005. The absolute price of gasoline did not drop sharply in election years compared to the previous years, but in October of 2002, 2004 and 2006, oil companies took less profit than in the previous non-election year. This kept pump prices below what they otherwise would have been.
“Motorists can’t stockpile gasoline or buy oil futures to defend against the price increase that this investment advisor says is certainly on the way,” said Dugan. “At least in California, they can vote yes on Proposition 87, the Clean Energy Initiative, on Nov. 7.”
The ballot initiative would charge California oil producers a small “fair share” tax to fund alternative energy development that would loosen the companies’ hold on transportation fuels.
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