Oil and gas speculators
To the Editor:
Having risen to such high levels, the price of gas also raises many questions about the reasons for it. Much of the discussion over this issue results in superficial responses leading to unsupported conclusions and charges.
A rare exception to this is Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at U.C. Berkeley, who presents an essential insight into the problem. According to Reich “The current surge in gas prices has little or nothing to do with energy policy or global supply and demand. It has most to do with America’s continuing failure to regulate Wall Street.” In support of his claim he reports that “More than 80% of American’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter.” Reich focuses on Wall Street because so much money can be made if the bets of financial speculators pay off in higher prices.
He goes on to illustrate that this is indeed happening, pointing out that “speculators historically were the source for about 30 percent of oil contracts. Today they account for 64 percent. In other words, a relatively few players with deep pockets are placing huge bets on oil.”
Obviously, it follows that we, the consumers, are paying for it. If Reich is as credible in this matter as he so regularly is in others, the next time you fill your tank you can blame Wall Street.