The Speculators

via- porco-voador.tumblr.com

I remember reading this spring that gas prices would likely rise due to suppliers cutting production- while demand increased and gained momentum during an economic recovery (or an economy that sucked less:).  This certainly, would not be good for consumers, considering the current state of the economy.  Well, Gas prices are on the rise again, and I for one, am concerned. 

The New York Times wrote recently about the recent volatility in oil & gas prices:

Last summer, prices surged to a record high above $145 a barrel, driving up gasoline prices to well over $4 a gallon. As the global economy faltered, oil tumbled to $33 a barrel in December. But oil has risen 55 percent since the beginning of the year, to $70 a barrel, pushing gas prices up again to $2.60 a gallon…

So prices are creeeeeeeping up on us again.  Is it natural supply and demand forces at play, or is it gouging, by the big players- The Speculators?  The Times sugests that it’s both:

Supply fears are creeping back into the market, … And there are increasing fears that the political instability in Iran could spill over onto the oil market, potentially hampering the country’s exports. The OPEC cartel has also been remarkably successful in reining in production in recent months to keep prices from falling.

 A popular opinion from a commenter of the Times article says,

Its been documented repeatedly that the run up to $4 per gallon gas was nothing but a speculators ruse. Nobody went to jail and there was no investigation by our so called elected representatives. Now its happening again a year later and the media are complicit by ignoring the obvious. This is a demonstrative case that supply and demand are a myth and that conglomerates and investors prey on the public with their willing accomplices, government and media.

Regardless of why gas prices are rising, fear by consumers of increased energy expenses is not a good way to turn the economy around.  The concern may however, help build further support for energy independence and new technologies- and big picture, this could be good… 

UPDATE 3:08 PM

The Times has reported some potentially good news today about speculative trading in energy products:

Reacting to swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering trading restrictions on hedge funds and other “speculative” traders in markets for oil, natural gas and other energy products.

Limiting volatility in energy prices, due to speculative traders, seems like a step in the right direction for our current economic situation…

7.11.09: more- npr article/audio