Does it cost more to get it out of the ground? Is it simply demand vs supply? No, it's effected by pro-war blowhards like Bush and McCain who threaten action with Iran, the weakening dollar, and most importantly by financial institutions trying to make money off of commodities.
"What role financial institutions — pension funds, mutual funds, and hedge funds, among others — are playing in driving up the price of oil to nearly $140 a barrel remains a key question. Regulators in Washington have acknowledged that they do not have enough information on speculative trading in commodity markets. Even though the evidence is incomplete, speculators have nonetheless become prime targets for legislative action."
Unlike mutual funds which can only go long and are regulated, these oil investments are in some lightly regulated markets
"Some analysts who testified before a House panel on Monday estimated that oil prices could fall to around $60 a barrel if speculators were driven out of the commodity market."
And who reaps from the $140 per gallon inflated oil? I would imagine suppliers like Russia, Venezuela, Nigeria and Saudi Arabia are smiling with all our greenbacks in their pockets.
NYT Article
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