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Oil Speculators and Evil Empires

As I was sipping my morning coffee today I came across this little announcement which blew my mind. As per the Pennsylvania Petroleum Marketers & Convenience Store Association: "Everyone agrees one of the biggest factors in high oil prices is oil speculation by hedge funds and investment bankers," said John V. Kulik, Executive Vice-President, Pennsylvania Petroleum Marketers & Convenience Store Association. "Some experts say as much as 60 percent of the cost of a gallon of gasoline or heating oil can be attributed to pure speculation and abusive trading practices."

I understand the price of oil has skyrocketed, but why do we blame “speculators?”  Do you really think these people sit around and ‘speculate’ on commodities for the hell of it?  Do you think they do it because it’s fun? 

These investors are acting logically, the real culprit is OPEC.  OPEC is the world's largest oil cartel.  They regulate the price of oil as a service to the highest bidder.  They control over 80% of the world's oil in one fashion of another.  You may notice though, most of the oil supplying countries in OPEC are dirt poor and rioting. 

But, somehow we blame the speculators. We don’t ask ourselves: “WHY are ‘speculators’ driving the price of oil up?”

So, here's why those pesky speculators keep buying oil:  Because more war is on the horizion.  

I really despise the idea that “Everyone agrees one of the biggest factors in high oil prices is oil speculation by hedge funds and investment bankers.”  It’s so vague, ‘everyone’ could be everyone who agrees and no one who disagrees.  

 This speculator stuff is simply the vilification of invisible people so inept politicians have someone to blame.

About the Author

Phillip Mabry is a student of economics and daily writer at http://www.actualpolitics.com . He has worked in the technology industry for over 10 years working with everything from audio/video to digital switching networks. Phillip is currently a contractor for the United States Navy as a communications engineer.

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