What Wall Street doesn’t want us to know about oil prices

From The Washington Post: http://www.washingtonpost.com/opinions/what-wall-street-doesnt-want-us-to-know-about-oil-prices/2011/09/14/gIQAiOodVK_story.html

By Bernie Sanders,
Published: September 15, 2011

The top six financial institutions in this country own assets equal to more than 60 percent of our gross domestic productand possess enormous economic and political power. One of the great questions of our time is whether the American people, through Congress, will control the greed, recklessness and illegal behavior on Wall Street, or whether Wall Street will continue to wreak havoc on our economy and the lives of working families.I represent Vermont, a rural state where many workers drive long distances to jobs that pay $12 an hour or less. Many seniors living on fixed incomes heat their homes with oil during our cold winters. These people have asked

Why have oil prices spiked wildly? Some argue that the volatility is a result of supply-and-demand fundamentals. More and more observers, however, believe that excessive speculation in the oil futures market by investors is driving oil prices sky high.

A June 2 article in the Wall Street Journal said it all: “Wall Street is tapping a real gusher in 2011, as heightened volatility and higher prices of oil and other raw materials boost banks’ profits.” ExxonMobil Chairman Rex Tillerson, testifying before a Senate panel this year, said that excessive speculation may have increased oil prices by as much as 40 percent. Delta Air Lines general counsel Richard Hirst wrote to federal regulators in December that “the speculative bubble in oil prices has concrete detrimental consequences for the real economy.” An American Trucking Association vice president, Richard Moskowitz, said, “Excessive speculation has caused dramatic increases in the price of crude oil, which harms end-users like America’s trucking industry.”

After I released records last month that documented the role of speculators, I was criticized on this page last week by two former members of the Commodity Futures Trading Commission. I put the information on my Web site for three reasons.

First, the American people have a right to know why oil prices are artificially high. The CFTC report proved that when oil prices climbed in 2008 to more than $140 a barrel, Wall Street speculators dominated the oil futures market. Goldman Sachs alone bought and sold more than 860 million barrels of oil in the summer of 2008 with no intention of using a drop for any purpose other than to make a quick buck.

Continue reading at:  http://www.washingtonpost.com/opinions/what-wall-street-doesnt-want-us-to-know-about-oil-prices/2011/09/14/gIQAiOodVK_story.html

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