I have written on the subject of oil speculation before, here, and here. Kendaleth C. VanLue, a guest blogger over at Think Progress published a piece today in which he lays out each of the recent indicators that oil speculation on Wall Street in indeed driving up the price of oil, affecting gasoline prices and heating oil dramatically. Shippers, parcel delivery companies, and airlines among other trade groups have repeatedly called on the administration to crack down on the practice, or at the very least open investigations. Experts have offered testimony to Senate and House leadership. However, other than veiled threats in recent stump speeches from President Obama, there has been no action from the Department of Justice or the CFTC.
The article lays out a sample of recent indicators of rampant oil speculation:
- “The benchmark U.S. oil price fell Wednesday to $101.47 in New York, its lowest level since mid-February, but still well above where analysts believe it should be with supplies up and demand down.”
- The CEO of Exxon Mobil said in May 2011 that the price of a barrel of oil “should be in the $60 to $70 a barrel range.”
- “Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.”
- The Federal Reserve Bank of St. Louis reports financial speculators have accounted for about 15-20 percent of the increase in price for crude oil in the last decade.
- Commodity Futures Trading Commissioner Bart Chilton recently cited numerous independent studies indicating excessive Wall Street speculation is driving up the price of gas.
Think Progress has links to the data to back up each of the indicators.