Monday, April 11, 2011


We keep taking it on the chin and Big Business/WALL STREET is throwing the punches. In addition to Republicans asking for more tax breaks for the wealthy, we are all drowning under the weight of oil prices. But why? Is there a supply issue? No, not really. Has there been a huge increase in demand? No, not really. So why?

What Is the Biggest Factor in High Oil Prices?:

Like most of the things you buy, oil prices are affected by supply and demand. However, oil prices are also affected by oil price futures, which are traded on the commodities futures exchange. These prices fluctuate daily, depending on what investors think the price of oil will be in the future. When traders think oil will be high, they bid it up even higher. This soon causes high gas prices..Another reason for high oil prices is the declining dollar. Since oil is denominated in dollars, the 40% decline in the dollar in the last six years puts upward pressure on oil prices. (Source: BBC, Oil Price May Hit $200 a Barrel, May 7, 2008)
Sometimes commodities traders drive up the price of oil, even when supply increases and demand falls. The EIA cites an increased flow of investment money into commodities markets. In other words, money that used to be invested in real estate or the global stock markets is now being invested in oil futures. (Source: EIA Short-Term Energy Outlook)

So you see, what is messing with everyone's  paycheck are a bunch of people making billions by BETTING on the price of oil.

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