Oil Speculation: The Enemy of the Pump

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Over the last five to seven years, the American people have had to pay outrageous prices at the gas pumps, wildly fluctuating from under $2.00 a gallon or less to paying $4.00 a gallon or even higher for gasoline. This issue of paying unreasonable and unpredictable prices at the pump comes from the higher prices of oil. Most will say that oil prices fluctuate so because of conflicts in the Middle East or due to shortages of oil, but the simple reason of the oil prices go up so high is because of oil speculation. Oil speculation is the single greatest problem of higher gas prices further causing more economic problems and compounding living for the middle and lower class individuals and families. The economical truth is that speculation is not a necessary thing. In fact, it inhibits the economic growth of the nation and will either stifle or completely suppress any economic growth or recovery. The solution to this problem is essential to the survival of the future of the United States’ economy and industrialization. Oil speculation is based on the future demand of oil supplies and on current world events. Basically, what it means is that if a crisis in a region where most of the current oil supply is produced or exported (the Middle East), and then the price of gasoline over in the western world will go up. Currently, the civil war in Libya as well as other uprisings in the Middle East, have contributed to prices increasing from up from a pre- revolution low of $2.50 a gallon to the average of $ 3.57 a gallon over a period of a few months. This increase has been attributed to the conflict in Libya and other countries, currently engaged in political upheaval. Libya only produces two percent of the world’s oil supply, which... ... middle of paper ... ...f the market’s contango [meaning spot oil prices were less than the contracted price on the date of delivery].” (Wallace,5) With the issue of the price of oil continuing to go up, continuing to cause the price of gas to go up which causes the consumer at the pump to use more money while the oil speculators continue to profit wildly. The entire problem causes the economy to stall and fail to accelerate. By removing speculators, the fixed price of a barrel of oil will cause the economy to accelerate and prosper. If famed television personality and decorator Martha Stewart could be prosecuted and jailed for stock speculation and seeking to make more profit by driving up shares in her own company based upon her needs, why can’t big oil and its speculators have the same punishment? It all depends upon who wants to rock the boat or turn their head the other way.

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