[Marxism] How Wall Street Speculation is Driving Up Gasoline Prices Today (PERI)

brad babscritique at gmail.com
Thu Jul 7 08:42:11 MDT 2011


http://www.peri.umass.edu/236/hash/5d79ac3c2ca6ef5c56c526b02d600b3f/publication/470/

Abstract:

Pollin and Heintz examine the factors contributing to the recent run
up in gas prices for consumers. They find that to a significant
extent, this is the result of the economy moving out of a deep
recession, into a recovery, which has increased the demand for
gasoline. But a major additional factor is the rapid growth in
large-scale speculative trading around oil prices through the oil
commodities futures market. They estimate that, without the influence
of large-scale speculative trading on oil in the commodities futures
market, the average price of gasoline at the pump in May 2011 would
have been $3.13 rather than $3.96. This means that the average U.S.
consumer paid a 83-cent-per-gallon premium in May for their gasoline
purchases due to the huge rise in the speculative futures market for
oil.

Fortunately, provisions of the Dodd-Frank Financial Reform Law grant
the federal government the authority to impose meaningful control of
this speculation on the commodities futures market. But the Commodity
Futures Trading Commission needs to exercise this authority provided
by Dodd-Frank in ways that protect ordinary people and small
businesses from speculation.




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