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GasBuddy News Article

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Speculators blamed for rising oil, gas prices

The Seattle Times -- U.S. demand for oil and refined products — including gasoline — is down sharply from last year, so much that the United States has become a net exporter of gasoline, unable to consume all it makes.

Yet oil and gasoline prices are spiraling upward.

The price of oil topped $106 a barrel and a gallon of regular unleaded gasoline averaged $3.57 a gallon Tuesday — thanks again in no small part to rampant financial speculation on top of fears of supply disruptions.


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Submitted Feb 22, 2012 By: EVH_1984
Category: Daily News Article Discussions > Topics Add to favorite topics  
Author Topic: Speculators blamed for rising oil, gas prices Back to Topics
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E-Squirrel
Champion Author Orange County

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Message Posted: Feb 24, 2012 7:23:32 PM

mmproteus explains:

'the tension in the Persian Gulf cannot itself cause higher gas prices. Without speculators there is no transmission mechanism for the tensions to affect the price of gas or oil. To say the cause of higher prices is the tension in the gulf and NOT speculators, is ignorant.'

Not really. Speculators affect neither supply nor demand, being neither producers nor consumers. What they do is translate assessments of THE RISK OF REDUCED SUPPLY into price signals. If reduced supply fails to occur, the speculator will lose money on his contract. By this translation, futures speculation tends to reduce consumption early on, conserving supplies, and tending to increase production before a shortage actually occurs.

Since so few people understand the operation of forward markets, there is often a mistaken belief that such markets serve only to raise prices, something that cannot be done without actually increasing demand.
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Anddy_viper888
Sophomore Author New York

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Message Posted: Feb 24, 2012 2:50:21 PM

OK
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confetti
Veteran Author Tampa

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Message Posted: Feb 23, 2012 9:05:28 AM

Good posts by Thoroughbred, BooHooMI, LostToo and gawxnative. I agree that the media/liberal establishment has created a buzzword and made speculators the "boogeymen" supposedly to blame for high prices. The truth is that government taxes, fees and regulations are largely responsible for the high price of gas, and accusing speculators is misdirection. I agree that these "speculators" are, in reality, our senior citizens and others with investments. And I agree that, as a consumer, I also hope the bubble bursts, and gas prices come down -- investment is gambling, and it doesn't always pay off.

For those that criticize the speculators, I sincerely don't understand the argument that investors are capable of affecting prices any more than someone betting on a sports team affects the outcome of the game. The articles I have read so far about speculation just make conclusory statements that speculators are the problem, without giving any supporting facts or explanation. If someone could point me to a logical explanation for blaming speculators, I would like to read it and educate myself about the opposing viewpoint. I understand that fraud and crony capitalism exist, and if there's evidence of wrongdoing by speculators in some way, or that the market is rigged, I'll change my opinion.
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gawxnative
All-Star Author Atlanta

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Message Posted: Feb 23, 2012 7:49:39 AM

YEP, here's hoping this bubble bursts again (like in fall of 2008) but hopefully without the major recession
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numbers
Champion Author North Dakota

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Message Posted: Feb 23, 2012 7:47:59 AM

Naturally
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Amendes
Champion Author Fresno

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Message Posted: Feb 23, 2012 3:09:11 AM

OK
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tomok
Champion Author Portland

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Message Posted: Feb 23, 2012 3:08:08 AM

*Speculators blamed for rising oil, gas prices.
Speculators, manipulators and the banks continue to unfairly and unjustly make the driving public pay higher prices at the pump for their benefit.

*The United States has become a net exporter of gasoline, unable to consume all it makes.
Big oil exports fuel and natural gas to the world for higher profits. Barry supports natural gas and oil production for sale to the world to help pay for his *spending gone wild* addiction.
Whatever the size or shape of the vehicle, Produce and ‘Drive’ vehicles with high MPG, are very reliable, have a ‘reasonable’ cost and a good ‘value’ for the money. Consider using ‘other’ forms of transportation to help lower your cost.
The price of fuel at the pump is too high!
12/22/2012!
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LostToo
Champion Author Illinois

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Message Posted: Feb 23, 2012 12:40:25 AM

Here we go again....... Lets all jump on the band wagon and blame the spector known as "Speculators."
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BooHooMI
Champion Author Michigan

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Message Posted: Feb 23, 2012 12:18:06 AM

Everyone with a 401K is a speculator. In Michigan the teachers have 40% of their 401ks in oil, yet vote for the first Marxist President who has set destroying oil companies as a goal of his, AG Holder, Soros', Van Jones and others of their ilk in the First Communist Revolution in the United States.
Ignorance has become their most valuable commodity.

Their zeal to accomplish this goal is genuine, but, as the law of history has proven, they are doomed from the start. The end game will be the death knell of America.
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MidNJ
Champion Author New Jersey

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Message Posted: Feb 23, 2012 12:04:48 AM

Throughbred,

Unfortunataly - allowing unrestricted "Drill Baby Drill" is not the answer.

We must look to other solutions!!
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Blue_Cruzer
Champion Author Lexington

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Message Posted: Feb 23, 2012 12:02:17 AM

I knew that.
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Throroughbred
Champion Author Cleveland

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Message Posted: Feb 23, 2012 12:00:38 AM

The speculators would have a much different future to speculate about if we were allowed to drill, if permits would again be gettiNG issued. if all the gulf rigs were allowed to get back into production, and the XL pipeline were allowed to start construction.....there would a lot different future and a much lower price at the pumps. Oh yes and much lower EPA regs. Free our own production and our own resource just like the natural gas industry has done.....an abundant supply, tremendous resources and very little EPA regs has led to much much lower NG prices period.
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kgbellman
Champion Author Ann Arbor

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Message Posted: Feb 23, 2012 12:00:28 AM

of course
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kgbellman
Champion Author Ann Arbor

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Message Posted: Feb 22, 2012 11:59:45 PM

of course
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Cashless
Champion Author Akron

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Message Posted: Feb 22, 2012 11:57:42 PM

Yup!
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nztyraider
Champion Author Nevada

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Message Posted: Feb 22, 2012 11:57:04 PM

As I said before.
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OKRifle
Champion Author Oklahoma City

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Message Posted: Feb 22, 2012 11:57:02 PM

Do tell!
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gumbyrex
Champion Author Fresno

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Message Posted: Feb 22, 2012 11:56:47 PM

It certainly would be a better world if the speculators would just go away.
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CPGas1815
Champion Author Michigan

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Message Posted: Feb 22, 2012 11:54:10 PM

Wall Street speculators whether they are speculating on energy products or on the price of a widget manufactured in Asia are those solely responsible for getting us into the economic mess we are now painfully enduring. To be sure the pain at the pump is about to intensify to all time record highs! Yesterday it began here in home town in the U.P. of Michigan where prices at the pump increased 7 cents per gallon.

It is going to be bad folks. It is REALLY GOING TO BE BAD!! Prepare yourselves. I hope we all survive.
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bif65
Champion Author Virginia

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Message Posted: Feb 22, 2012 11:52:03 PM

ok
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bcok
Champion Author Los Angeles

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Message Posted: Feb 22, 2012 11:51:34 PM

Ultimately, this is the big money mongrels helping the rest of them mongrels getting richer.
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carman11
Champion Author North Carolina

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Message Posted: Feb 22, 2012 11:46:32 PM

Higher gas price were design to make you drive the type of cars they want you to drive. Then they will have to raise gas taxes because we are not buying gas and the road taxes are not enough to build and repair the roads.
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jayrad1957
Champion Author Los Angeles

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Message Posted: Feb 22, 2012 11:46:09 PM

"We need a President, like Mitt Romney"

That was a good one.
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Tanner_1
Champion Author Virginia Beach

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Message Posted: Feb 22, 2012 11:45:43 PM

Well you have to blame somebody!
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Saturn93
Champion Author Salt Lake City

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Message Posted: Feb 22, 2012 11:42:36 PM

Easy to point fingers at the speculators. We need a President, like Mitt Romney" who really understands the economics of the oil industry and how to effectively deal with it. I saw him effectively change a losing Olympics organization, mired in controversy and bad press, into the most successful Winter Olympics ever held. Instead of the projected loss of millions of dollars, the games have left a legacy which is still benefiting Utah and the US, ten years later.
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02SilverStroke
Champion Author Dallas

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Message Posted: Feb 22, 2012 11:41:45 PM

Not just big government but I'm sure that Obama himself is telling people to do what they can to get gas to $5.00 a gallon. Of course if that happens, he's sure to lose in November.
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DEG
Champion Author Las Vegas

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Message Posted: Feb 22, 2012 11:40:11 PM

Big Government has a large hand in this run up.
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johnnyg1200
Champion Author St. Louis

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Message Posted: Feb 22, 2012 11:38:35 PM

Who does this surprise?
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judgemobile
Champion Author Ohio

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Message Posted: Feb 22, 2012 11:38:25 PM

let's speulate on the price of oil if Iran gets a nuclear bomb and delivery capacity.
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skybiker
Champion Author South Carolina

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Message Posted: Feb 22, 2012 11:37:11 PM

God save us from these Bean Counters!!!!...
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abcdMA
Champion Author Worcester

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Message Posted: Feb 22, 2012 11:36:27 PM

bad for economy, even worse for a president without substance
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shopnshop
Champion Author Dallas

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Message Posted: Feb 22, 2012 11:34:54 PM

bad for the economy
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Jedidiah
Champion Author Maine

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Message Posted: Feb 22, 2012 11:34:05 PM

RE: Pointerpuppy

"If they keep speculating that gas will go up, it might as well go up, so they are right."

Sounds like Conservatism jargon for let the money flow to money because we deem it proper.

Let me rethink your sentence. It seems then that speculators have the power to control gas prices by willing it to be thusly. That reasoning is behind the crux of the problem of not regulating that gas prices be fixed to reflect current costs of purchasing and delivery vs the real problem of speculative future costs based on buying low now and selling at a higher cost later. You cannot expect our economy to thrive by underwriting such voodoo economics.

Thus, I rethought your idea and reply: "If they keep speculating that gas will go up, it needn't go up until it cost the holders of the gasoline glut (which is already to sell at a lower price) more money to replace, so they are wrong in harming our nations working class while they fatten their own future bankrolls."
 
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jayrad1957
Champion Author Los Angeles

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Message Posted: Feb 22, 2012 11:33:30 PM

danol, how does the government make 15% tax on each gallon? The Federal tax is about 18.9 cents/gallon regardless of price. Can't wait to hear the explanation on that statement.
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clermont40miles
Champion Author Cincinnati

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Message Posted: Feb 22, 2012 11:32:39 PM

Sunshine. Let the light shine on these rats.

Speculator scum.
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gasgo123
Champion Author South Carolina

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Message Posted: Feb 22, 2012 11:30:51 PM

Price should be based on cost at time of delivery, not speculation.
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jayrad1957
Champion Author Los Angeles

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Message Posted: Feb 22, 2012 11:30:47 PM

The way pump prices are going up leads me to believe the station owners are now taking advantage of the situation. Up 20/30 cents a day? Sometimes twice a day? You can now add station owners with the speculators as part of the cause of the run up in prices.
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skyking19
Champion Author Little Rock

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Message Posted: Feb 22, 2012 11:30:29 PM

That's what commodity trading is all about.
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danol43
Champion Author Modesto

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Message Posted: Feb 22, 2012 11:28:33 PM

Oil companies make a 4% profit/gallon and the government makes a 15% profit (tax) gallon. Who is the culprit?
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luwachris
Champion Author Los Angeles

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Message Posted: Feb 22, 2012 11:22:15 PM

NOT BUYING IT!!!!!!
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ramman2012
Champion Author Edmonton

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Message Posted: Feb 22, 2012 11:17:02 PM

By the way Blue48,conserving is not the problem,it's your government!
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ramman2012
Champion Author Edmonton

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Message Posted: Feb 22, 2012 11:14:47 PM

If Obama and congress don't fix this speculator problem America will pull itself and the rest of the world deeper into recession.
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Blue48
Champion Author Illinois

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Message Posted: Feb 22, 2012 11:12:00 PM

CONSERVE AMERICA CONSERVE!
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pointerpuppy
All-Star Author Idaho

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Message Posted: Feb 22, 2012 11:11:14 PM

So if they keep speculating that gas will go up, it might as well go up so they are right.
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serrog
Champion Author Nova Scotia

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Message Posted: Feb 22, 2012 11:11:12 PM

greed
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bnosyt
Rookie Author Missouri

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Message Posted: Feb 22, 2012 11:11:01 PM

ty58 and oaktowner...for every $ of oil/gas that is exported, that dollar enters our economy from a foreign economy and creates jobs/products/services.
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DerHahn
Champion Author Illinois

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Message Posted: Feb 22, 2012 11:02:25 PM

"``(11) ELIGIBLE COMMERCIAL ENTITY. The term `eligible commercial entity' means, with respect to an agreement, contract or transaction in a commodity
``(A) an eligible contract participant described in clause (i), (ii), (v), (vii), (viii), or (ix)
of paragraph (12)(A) that, in connection with its business
``(i) has a demonstrable ability, directly or through separate contractual arrangements, to make or take delivery of the underlying commodity;"

the above regulations need to be changed so that they MUST take delivery. maybe then we could get rid of the speculators and how they are going to ruin everything.
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ScottE
Champion Author Orange County

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Message Posted: Feb 22, 2012 11:01:44 PM

This article will really make you Hate Big oil and Speculators. Especially the last 4 or so paragraphs. DETESTABLE. wE DO ARE PART AND GET SCREWED BY BIG OIL WITH SPECULATORS TOTALLY IN BED WITH THEM.
big YEECH!!!WE ARE GETTING SCREWED BLUE AND TATTOO.
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ty58
Veteran Author Akron

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Message Posted: Feb 22, 2012 11:01:25 PM

if we are doing so much exporting why is congress making such a big deal about us not letting the canada pipe line in do we really need it
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oaktowner
Champion Author San Francisco

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Message Posted: Feb 22, 2012 10:59:17 PM

since the u.s. exports gas now, there is no need for the keystone pipeline. u.s doesn't need the gas. the pipeline is only to export canadian oil...
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