Posts tagged ‘speculators’

April 20, 2012

Reigning in the Speculators

Speculators have entered the conversation once more with President Obama’s proposal to police their manipulation of oil markets. Almost immediately his Republican opponents lambasted the effort as nothing more than a political ploy. Industry leaders stepped forward to warn consumers, with stricter regulations prices will rise. Who holds the reigns of truth here? Or does this all too familiar debate reinforce the need for a new approach?

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March 5, 2012

Gas Price News: Prices Spiked By Speculators, Congressmen Claim

Excessive speculation in the oil futures market may be costing you 15 percent or more at the gas pump and playing a “significant” role in rising gasoline prices,  according to a joint letter from 68 members of Congress that ABC News has obtained.

The joint letter, which cites a recently updated report by the St. Louis Federal Reserve titled “Speculation in the Oil Market,” urges immediate action by the Commodity Futures Trading Commission to install caps on the biggest traders on Wall Street, preventing them from controlling unusually large positions in the oil futures trading market.

The Reserve’s report called “Speculation in the oil market,” which was just updated in February  2012, concluded there are two main factors for large price swings at the gas pump.

Read the full joint letter HERE

It says “global demand shocks,” such as those caused by turmoil in the Middle East, “account for the largest share of oil price fluctuations.”

The report also concludes “speculation played a significant role in the oil price increase between 2004 and 2008 and its subsequent collapse. Our results support the view that the financialization process of commodity markets explains part of the recent increase in oil prices.”
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February 27, 2012

Speculating Away Our Recovery

As gas prices rev up into high gear well before the summer months of traditional high demand predictions estimate prices at the pump will reach well over $4.00 a gallon. Along with the impacts this will have on the average consumer, these increases will, and already have, produced gushers of political rhetoric, laying blame squarely on the President’s shoulders. While high gas prices are great fodder for political gamesmanship, their accuracy is often suspect. How much influence does or can the leader of the U.S. have over the price of crude, let alone the prices at the pump?

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