When Fox's Eric Bolling finds a talking point he likes, he just won't let it go, especially when it comes to providing viewers with misleading and outright false information as part of his push for increasing domestic oil production.
On Fox News' America Live yesterday, Bolling sat down with host Martha MacCallum and Reuters' David Sheppard to discuss GOP proposals to speed up offshore drilling. When Sheppard rebuffed the notion that increased production of oil in the United States would lower gasoline prices, Bolling doubled down on his tired talking points, repeating the claim - which energy experts have deemed “nonsense” - that oil prices dropped “from $147 to $33 a barrel in six months” in 2008 because President Bush announced the removal of the presidential moratorium on offshore drilling.
Bolling went on to dismiss the effect of speculation on oil prices, claiming that “There are economic reasons for oil to go up or down. If you take away that economic reason, if you add supply to the market it can't rally. You can't blame speculators and you certainly can't blame any futures traders. It really -- you just need more oil.” However, as Sheppard reported for Reuters, an analysis by Goldman Sachs suggests “speculators are boosting crude prices as much as $27 a barrel”:
Long-term commodity bull Goldman Sachs (GS.N) warned clients on Monday to lock-in trading profits before oil and other markets reverse, with the bank's estimates suggesting speculators are boosting crude prices as much as $27 a barrel.
Goldman estimated in a research note on March 21 that every million barrels of oil held by speculators contributed to an 8-10 cent rise in the oil price. As unrest spread in North Africa and the Middle East, investors accumulated the equivalent of almost 100 million barrels of oil between mid-February and late March on top of their existing positions, adding approximately $10 to the 'risk premium', Goldman said.
The U.S. Commodity Futures Trading Commission said that as of last Tuesday, hedge funds and other financial traders held a total net-long positions in U.S. crude contracts equivalent to a near record 267.5 million barrels.
Using Goldman's estimates, that indicates the total speculative premium in U.S. crude oil is currently between $21.40 and $26.75 a barrel, or about a fifth of the price.
Traders and analysts have cautioned that speculative bets can quickly unwind, dragging prices lower.
By contrast, the Energy Information Administration has estimated that even if the U.S. opened the Atlantic, Pacific and Eastern Gulf of Mexico to drilling, the impact on the price of oil would be $1.34 a barrel (in 2007 dollars) -- and not until 2030.
Goldman Sachs' report to investors is only the latest evidence of the impact of speculation on oil prices. In March, the Associated Press reported that Germany's Commerzbank said speculators had “become the main driving force behind prices.”
From Bolling's appearance on America Live: