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Can the Government Control Oil Speculation?

Last month, President Obama unveiled a plan to regulate the oil industry more closely to crack down on speculators whom he blames for the spike in gasoline prices. But are speculators to blame?

Last month, President Obama unveiled a plan to regulate the oil industry more closely to crack down on speculators whom he blames for the spike in gasoline prices.

We all feel the pain as gas prices flirt with $4 per gallon, and nobody seems to know exactly why prices fluctuate so much. Are the big oil companies manipulating the markets? Does China’s growing thirst for fossil fuels drive up prices for us? Will more drilling help? More refineries?

Blaming speculators is a popular explanation that many, including the president, have adopted. But is it accurate?

David Nicklaus of the St. Louis Post-Dispatch wrote a great column last month that puts this in perspective. Click here to read it.  

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Steve Krulin May 26, 2012 at 12:11 PM
It's too bad mr Obama never took any business courses or held a job in the actual world of business - you know, the world as it is not some vague utopia controlled by the self-proclaimed "smart". Ponder this: If 'speculators' drive up the price of oil, then it must be 'speculators' who have been driving it down the past few weeks - no?
Steve Krulin May 26, 2012 at 12:33 PM
. . . . Yesterday morning, 5/25, there was a report that enriched uranium was found by in inspectors in Iran. Possibly meaning that Iran has been lying regarding what they have been lying about and increasing reaction and armed conflict in the middle east (uncontrolled armed conflict) - cutting off or greatly reducing the commercial flow of oil from that area. And within hours the price of oil, which had been going below $90 with projection of further drop due to 'oversupply', suddenly "stabilized' above $90 when the strong potential for under-supply rered it's head. By afternoon many non-malignant 'reasons' for the high uranium readings were flooding the business news, cutting off a spike in oil price 'speculation'. Tuesday will show which way the bets are going. In the mean time walk over to the Kirkwood train station and give a friendly wave to the trainmen delivering our coal to the electric plants.
George Stair May 27, 2012 at 01:43 AM
I think "Cap and Dividend", http://www.capanddividend.org/?q=latestnews, would help. It caps the supply and auctions permits to use carbon-based fuels. The proceeds from the auction are rebated to the people to compensate for the increased price of fuel. Thus it provides an incentive to conserve without hurting the economy. See the website for details.

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