leogodin.net

When I first heard of the Enron loophole and how it would immediately drop oil prices by 50% I was very skeptical. However, here we are about four months after Congress voted to close the loophole and oil is down nearly 50% from it’s high.

Here on NewsVine there were many discussion on the cause of high oil prices. My limited understanding led me to believing that it was largely due to the surging middle class in India and China. Others said it was price fixing by the oil companies. Yet others said the Enron loophole was largely to blame for high oil prices. Well, as of now, it looks like they were right. It is important to note that the Enron Loophole has not actually closed yet. It is scheduled to close September 30 2009. However, just knowing it is going to close (unless Congress intervenes) is probably enough to have a significant impact. Well, at least I think so.

Here is my question to those who know more than I do. Did passing the bill that closes the Enron Loophole bring oil prices down? Is the main cause of today’s lower prices coming from those who are getting out of this market before it closes?