Lakhota
Diamond Member
By Alex Seitz-Wald
But theres little truth to claims that Obama has curbed U.S. oil production and driven up gas prices in the process. As NPR noted this morning, the number of drilling rigs in U.S. oil fields has quadrupled under Obama and domestic oil production hit an 8-year high in 2011. For the first time in 60 years, the U.S. is now a net fuel exporter.
Oil demand was actually down 4.6 percent last week over last year, while the supply of gasoline has actually increased slightly since a year ago. So why are gas prices so high? As McClatchys Kevin Hall explains today, there is a systemic problem: speculation.
Energy futures markets serve a legitimate role in helping producers (like oil companies) and big end users (like airlines) hedge against price volatility, but lately, theyve been taken over by Wall Street speculators who never intend to actually use the fuel theyre betting on. As Hall reports:
Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today its almost the reverse.
A McClatchy review of the latest Commitment of Traders report from the Commodity Futures Trading Commission, which regulates oil trading, shows that producers and merchants made up just 36 percent of all contracts traded in the week ending Feb. 14 while speculators who will never take delivery of the oil made up 64 percent.
More: Blame Oil Speculators, Not Obama, For Rising Oil Prices | ThinkProgress
Once again, speculators behind sharply rising oil and gasoline prices | McClatchy