Afraid of Getting Gouged by Gas Prices? Blame Wall Street, Critics Say
Some lawmakers are pointing the finger at oil speculators on Wall Street.
WASHINGTON, July 29, 2009— -- Afraid of getting gouged by higher gas prices this summer? Blame Wall Street, some critics say.
Many Americans are still scarred by last year's summer gas-price spike to $4 a gallon. This summer gas prices are down around $2.50 a gallon, but for the first time since mid-June, prices have gone up week-over-week.
The laws of supply and demand, though, indicate that prices should be heading down, not up: supply has increased, demand has decreased.
With American consumers struggling to survive the worst economic crisis since the Great Depression, concern about a possible increase in gas prices now has some lawmakers pointing the finger of blame squarely at oil speculators on Wall Street.
"When there's a lot of supply and limited demand, we expect prices to go down," Sen. Bernie Sanders, I-Vt., told ABC News. "That's where we are today: A lot of supply and limited demand. But what's happening is our friends on Wall Street are once again into their speculation. They own a substantial part of the oil futures market and they are artificially driving prices up."
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Sanders is leading the charge for the government to take action to stamp out oil speculators.
This week the chief government regulator signaled that action could be coming down the pipeline. On Tuesday, Gary Gensler, the chairman of the Commodity Futures Trading Commission, kicked off a series of public hearings on the issue by warning of "strict" new limits on traders betting on energy contracts.
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