The price of gas is perplexing. Today I rode by the Ingles on Highway 341 and watched in fear as the pump attendant changed the sign from $1.47 to $1.54. I thought to myself that because of the upcoming holiday season prices would again sore to an astonishing rate.
Did anyone see the special on MSNBC the other night about the cost of oil?
It said that oil prices were being driven up by investors in the oil futures market. Supply and demand had nothing to do with it. It also said that because the investors were so heavy in oil futures when the economy finally gave out that is one of the chief reasons wall street needed a bail out.
In other words the investors were fueled by greed without any feel for what it was costing the average joe at the pump and elsewhere. When oil fell to below 100.00 and they were holding so much 150.00 oil - the average joe had to go to their rescue.
I didn't see the MSNBC report but I do know that speculation is the largest motivation for oil prices. The entire stock market is based on speculation so it make sense that OPEC would be as well. It is not supply and demand as that would require waiting to see what the supply is before setting prices. The suppliers would never get ahead and, therefore, generate revenue. They need to speculate so they can make money off their initial investment in the oil. The average Joe generally does not figure into the equation.
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