U.S. crude-oil inventories are at their highest levels in almost two decades, and demand has fallen to a 10-year low, but crude oil prices have climbed more than 70 percent since mid-January to a six-month high of $62.04 on Wednesday.Gosh, it's almost like somebody's bidding up oil prices again. Gosh, that never happens. I wonder who has the money lying around to bid up oil prices. Now, can I think of anyone who happens to have a few extra dozen billion dollars to speculate on oil prices...Meanwhile, although refiners are operating at less than 85 percent of capacity, which leaves them plenty of room to churn out more gasoline if demand rises during the summer driving season, the price of gasoline at the pump has climbed 28 cents a gallon from a month earlier to $2.33.
Big Wall Street banks such as Goldman Sachs & Co., Morgan Stanley and others are able to sidestep the regulations that limit investments in commodities such as oil, and they're investing on behalf of pension funds, endowments, hedge funds and other big institutional investors, in part as a hedge against rising inflation.So lemme get this straight: we give banks trillions in taxpayer loans and stuff, they turn around and use it to bid up oil to "diversify their portfolios" and screw over...taxpayers.These investors now far outnumber big fuel consumers such as airlines and trucking companies, which try to protect themselves against price swings, and they're betting that the economy eventually will rebound, that the Obama administration's spending policies and Federal Reserve actions will trigger inflation — or both — and that oil prices will rise.
Demand for oil is down at 2000 levels. Supply is at a 20 year high, 1990 levels or so. Shouldn't oil prices ergo be back down at those levels, where gas was a buck a gallon?
Mysteriously, gas is $2.40 a gallon and on the way up. It was $1.90 not more than a month ago. Nice to see the TARP money being put to good use, huh?
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