Oil Speculation
Commentary By: Ronald L. Cain
July 12, 2008
A message is floating around on the web that reads something like: “If OPEC sells the U.S. oil for $147 a barrel the U.S. should sell OPEC wheat for a $147 a bushel.”
With skyrocketing gasoline prices, it is a nice catchy message. But it is not factual. OPEC is not selling the U.S. oil for $147 a barrel (or whatever the price is today). The number one reason for skyrocketing gasoline prices is speculation.
Oil's Spike -- Fueled By Speculation
http://www.cbsnews.com/stories/2008/06/10/earlyshow/main4168217.shtml
The loophole that allows hedge funds, pension and investment firms to speculate on oil prices without regulation is a major factor in rising gasoline prices.
The recent housing crisis has shown that excessive speculation can distort markets and oil is currently experiencing the same phenomena. Actions by the current administration, and the exemptive measures included in the CFMA of 2000, have produced a dichotomy in regulation and raised serious questions about gaps in regulation for oil and distillate futures markets. This should be reversed by legislation to impose federal speculative limits on oil and distillate futures markets trading both on organized exchanges and over-the-counter.
The attempts to close the loophole have thus far failed. Sen. Barack Obama has called for closure and Sen. John McCain has not.
Republicans have introduced a number of bills promoting oil well drilling as a means to reducing current skyrocketing gasoline prices. Drilling more oil wells will not reduce the current gasoline prices. And Republicans know it. This is only political rhetoric while the Republicans continue to support the interest of Big Oil over the needs of our country.
http://www.congress.org/congressorg/home/
I checked the “Congress.Org” site but could not find any recent legislation being introduced to regulate oil speculation. Stopping oil speculation is the only current way to stop the escalating gasoline prices.
You can use the “Congress.Org” site above to send a message to members of Congress. When the site opens, type in your zip code. Then click on “federal.” A message form will come up. Using the message form, ask your representatives to stop oil speculation.
(Ronald L. Cain is a free lance writer and a resident of Houston County Georgia. Cain was formerly a featured columnist with The Macon Telegraph newspaper in Macon, Georgia and other local newspapers in the area. Ronald56_98@Prodigy.net )
