It's The Speculators, Stupid

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The chant from Oil Company Republican politicians has been "drill here, drill now" . They've put on a PR push to lift environmental protections and hand out oil & gas leases, claiming skyrocketing oil prices were a result of an oil shortage.

As anyone who's bought a tank of gas lately knows, the price of gas has been going down. And interesting enough, the price began going down when Democrats put forward legislation to regulate speculation.

Now a study has been released that proves speculation not shortage was the reason for the huge increase in oil prices.

Study links oil prices to investor speculation

By H. JOSEF HEBERT – 1 day ago

WASHINGTON (AP) — Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday.

The report by Masters Capital Management said investors poured $60 billion into oil futures markets during the first five months of the year as oil prices soared from $95 a barrel in January to $145 a barrel by July.

Since then, these investors have withdrawn $39 billion from those markets as prices have retreated dramatically, the report said. Oil traded at just under $102 a barrel Wednesday on the New York Mercantile Exchange. ...

Republican's including the "Commodities Futures Trading Commission (CFTC)" have continued to push the fantasy that more oil & gas leases would magically solve the runaway price problem. Democrats have recognized that market manipulation has been the problem and the proof that they are right is the drop in gas prices as speculator fled from crude oil futures.

... Sen. Maria Cantwell, D-Wash., a sponsor of an anti-speculation bill, said the Masters report challenges CFTC claims to date that supply and demand forces — and not excessive speculation — has driven up oil prices.

"This analysis illustrates that when oil speculators poured large amounts of speculative money into oil markets, prices skyrocketed just as they were hoping ... And when the speculative money got pulled out, prices tumbled," she said. ...(AP article)