Even Oil Companies Know That Oil Prices Are Rigged
In a surprise statement, Exxon Mobil CEO Rex Tillerson told the Senate Finance Committee that oil prices did not currently reflect supply and demand. "When we look at it, it's going to be somewhere in the $60 to $70 range if you said: ‘If I had access to the next marketable barrel, what would it cost?'"
Since the price of oil barrels is currently over $100, it is clear that something beyond the laws of supply and demand is driving the high price of oil, and with it, the high price of gasoline. Well, if it isn't supply or demand that is driving the price of oil up so high, there's really only one other culprit: oil speculators.
What, exactly, are oil speculators? They are social parasites, gamblers who produce absolutely nothing of value. They bet on the price of a barrel of oil, and use their low margin requirements and influence in the market to drive the price of commodities higher and higher. They then feed off each other, like lemmings off a cliff, speculating and pushing the market higher. When the market seems prime for a dip, they switch their bets. This drives the price back down some, allowing them to magically make money on both sides of the transaction.
A small amount of oil speculation is a healthy thing for the economy, when it is done by firms intent on actually receiving the oil and producing something of value with it. Speculation lets those companies time the markets to reduce their costs. Those bets have a negligible effect on the price of oil.
But, according to experts, speculators in today's market have added $30 to $40 to the price of a barrel of oil. Let's assume that Tillerson is telling the truth, and not just placing blame on these convenient, shadowy targets. What does this mean for you?
For starters, it means you are paying a ridiculous premium at the pump. By allowing speculators to gamble on the oil commodities market, you add those additional $30 to $40 to the price of a barrel of oil. Take that money out of the equation, and you're looking at $60 barrels of oil. That translates to a gas price of around $2 per gallon, if not less.
Oil speculation might also have cost you your job. The high price of oil has been a drag on the economy for two years, dragging the economy down every time it starts to grow. The unemployment rate has hovered around 9-10% for years now, and every time it threatens to make gains, the price of oil drags the economy back down.
It is clear to any impartial observer that regulators need to clamp down in speculative trading in the oil market before the economy will ever fully recover. Failure to do so will not just effect the bottom line of corporations, but the pocketbooks of America's families.
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