|
The reasons for high priced oil/gas
...according to Mark Cooper who will be testifying before congress today.
Supply and demand plays a role...OPEC plays a role...the weakened dollar plays a role...but the primary cause of the high price of oil is future speculators.
Commodity trading was deregulated in 2000 and this opened the doors for future speculators to basically just go wild. They can invest at 5% with a 95% margin call and no required reserve because of deregulation. This is basically a house of cards...a scam if you will...but as long as the house does not fall they are making money head over heels.
According to Mark Cooper fundamentalists believe that oil should be between $40-$60 per barrel as a natural growth because of supply and demand...OPEC believes that it should be around $80 per barrel...where as it is around $140 per barrel and the difference is because of futures speculators.
He and others...today...will be urging congress to re-regulate the commodity trading in the futures market.
BTW...some have suggested "why not just ban futures speculation" but according to Mark Cooper futures speculation does have a healthy role to play as long as it is regulated.
My paraphrasing may not be 100% correct but none the less discuss please.
|