Gas Prices Soar But It’s Not Manipulation

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Speculators are being blamed for manipulating the fuel market, but Investors believes the answer will be the same as it was last go around. The rise is the result of new environmental rules regarding fuel blends (the EPA), the increase in the price of crude by the OPEC gangsters, the problems with refining capacity (look to the EPA for problems here as well), ethanol prices (another losing fuel blend idea that costs us unnecessary expense in subsidies), and seasonal factors.

…In its latest update on gasoline prices, released last September, the FTC came to the familiar conclusion: that the price at the pump largely follows the price of crude. The ups and downs of refining capacity also play a role, as do ethanol prices, shifts in fuel blends required by environmental rules and seasonal factors such as summertime driving.

The story was similar in 2005, when the FTC noted that “the vast majority” of its probes “have revealed market factors to be the primary drivers of both price increases and price spikes.” Studies by the Government Accountability Office have reached the same conclusion, as have many private-sector reports.

As for crude prices, economists say speculators create liquidity but are secondary to fundamentals. The Institute of International Finance said in a September 2011 report that researchers “have not documented a clear causal link between financial investment and commodity prices.” In other words, don’t blame Wall Street. On the other hand, the global banking group said, “a strong link between commodity prices and fundamental supply and demand factors is indisputable.”…Read more: Investors

To add a note of levity, the ever-tricky Nancy Pelosi, wants to crack open the emergency oil reserves or pretend to do so [oil reserves are for emergencies such as the closing of the Straits of Hormuz] to fool the speculators. Of course, now that she has said it, they might not be so easily fooled and, again, it is likely the speculators are smaller players in this, but that doesn’t stop our Minority Leader –

House Minority Leader Nancy Pelosi (D-Calif.) on Thursday endorsed tapping the Strategic Petroleum Reserve to combat rising gas prices – breaking ranks with her top deputy in the House, who is wary of the idea.

Pelosi said that using the oil reserve was her “personal favorite” short-term fix to not only lower gas prices but also send a message to speculators in the oil markets, whom Pelosi blamed for the increasing costs. The oil reserve, Pelosi said, needs to be “prominently on the table.”

“Every time oil has been diverted or taken from the [Strategic Petroleum Reserve] — one or the other or both — the price at the pump has gone down,” she told reporters. “But even if you don’t subscribe to that, that at least puts a question mark to the speculators that you might do this.”…Read here: Michelle Malkin

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