Is Oil Speculation Responsible for High Gas Prices?

Is Oil Speculation Responsible for High Gas Prices?

As Americans watch their wallets empty as quickly as gas prices climb, we all search for answers. Some experts say the seemingly endless rise in gas prices is being driven largely by oil speculation, the practice of buying and trading oil futures -- in an attempt to predict the cost of oil at a later date. Should you blame speculation for your pain at the pump?

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NYMEX

Demand Continues to Grow, Supply Remains Relatively Constant

New York Mercantile Exchange

Commodity Futures Exchange

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Currently, there is a relentless increase in petroleum demand pushed each year by the millions of people making the transition from less developed circumstances to the beginnings of middle-class circumstances.  Currently, China is putting more than eight million new cars on the road each year.  India, the Middle East and Russia are experiencing similar transitions.  We believe the sheer uncertainty around consumption in these economies, in combination with the extremely tight world market conditions, is a strong influence on price volatility in the world oil market.  In concert with the tight market conditions and inelastic demand for petroleum products we highlighted above, that volatility is oscillating around even increasing prices.

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Speculation = High Gas Prices?

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    The New York Mercantile Exchange, Inc., is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious... More

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