Gas Price Claims Deceptive, Misguided


gas price graphsource: Federal Reserve Bank of St LouisThroughout the early 2000s oil and gas prices had been following an upward trend, peaking in mid-2008 then plummeting briefly just before Obama took office as the result of the global economic downturn.

***

In reality, the price of gas at the pump is determined by a host of other factors, particularly rampant speculation in the oil market which artificially drives up the price of oil, creating a new value based not on supply or demand, but on the intricacies of trading at any given time. An internal report published this year by Goldman Sachs estimates oil speculation may contribute as much as $20 to every barrel of crude oil.

Kochs Contribute to (and Profit From) High Gas Prices

While Koch Industries is a privately held company, evidence suggests that Charles and David Koch have profited enormously from the private, unregulated oil exchange market. The brothers are industry leaders in oil speculation and pioneered the first oil trading schemes in the 1980's. They have also artificially restricted the supply of oil by buying up large quantities of crude oil and holding it offshore in tankers -- hardly the behavior of a corporation concerned about "higher costs for American families."

Since the economic recession began in 2008, the Kochs have exponentially increased their wealth by 58 percent while median family net worth dropped 40 percent. When fully implemented, the new Wall Street reform rules that bring transparency to the derivatives market might show us how much of this profit is due to oil speculation.