In Defense of Oil Speculators

Don’t Blame Wall Street for High Gas Prices

(Ib Ohlsson)

With high gasoline prices across the United States, the long knives are out for speculators in the oil market. Elected officials worry that pain at the pump might cause them pain at the ballot box this fall. Last month, dozens of House and Senate Democrats sent a letter to the Commodity Futures Trading Commission (CFTC) criticizing federal regulators for failing to police energy markets sufficiently, implying that Wall Street is culpable for the rising cost of gas. At the same time, President Barack Obama asked Attorney General Eric Holder to “pay attention to potential speculation in the oil markets” and reconstitute a task force to investigate whether Wall Street is artificially driving up oil prices. These moves mirror the popular view that reckless gambling in financial markets is catapulting retail gasoline prices far beyond what supply and demand warrant. A CNN poll found that 59 percent of Americans believe

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