Wall Street and Gas Prices

Les Leopold of AlterNet has written an excellent article titled How Wall Street Drives Up Gas Prices -- Ripping Us Off and Killing Jobs.


Excerpt:


Next time you fill up your tank, remember that $10 to $25 is going right from your pocket to the financial sector.

Gasoline prices have been falling in recent weeks, but they're still close to their five-year high after climbing steeply for three years. For every penny increase at the pump, $1.4 billion per year leaves our collective pockets, creating a drag on the sluggish “recovery.” Where does it go and what caused the price explosion at the pump?

It's a common belief that oil prices are set on the world market by supply and demand. Less supply and/or more demand causes prices to rise. Oil is getting harder to find; OPEC is holding back supply; China and India are guzzling it up; Iran is threatening to blow it up. And regulations are getting in the way of drill, baby, drill -- end of story.

But this fixation on blind market forces ignores the fact that Wall Street is financializing the commodities markets – especially oil – as it seeks new ways to pick our pockets. The same greedy swindlers who puffed up the housing bubble and then milked it dry are now hard at work doing the same with gasoline.

What is financialization and why is it coming to the oil industry?

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