Thursday, February 23, 2012

WOOD-TV on rising gas prices

When I linked to Gas prices going up again on Facebook yesterday, I alluded to Iran's role in the increase in the prices of oil and gasoline. One of the commenters on Facebook pointed out that I had neglected the actions of speculators. He was right. I was being lazy and just reflecting WXYZ's reporting, which emphasized Iran and the expanding economy, but left out speculation. WOOD-TV's report on the subject, on the other hand, does.

Gasoline prices have never been higher so early in the year.

McClatchy Newspapers via Truth Out have more in Once Again, Speculators Behind Sharply Rising Oil and Gasoline Prices.
While tension over Iran has ratcheted up over the last few months, the price of oil and gasoline has leaped far beyond conventional supply and demand variables. Financial speculators are piling into the market, torquing the Iranian fear factor into ever-higher prices.

"Speculation is now part of the DNA of oil prices. You cannot separate the two anymore. There is no demarcation," said Fadel Gheit, a 30-year veteran of energy markets and an analyst at Oppenheimer & Co. "I still remain convinced oil prices are inflated."
I highly recommend you read the rest of the article.

So, how much is the cost of oil being inflated by speculation right now? The experts interviewed in the article estimate that it could be anywhere from $10-$25 per barrel.

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