The math is very simple. The average price of gas is $3.59 based on crude at an average of $106/barrel. Now I will concede that is overly simplified but good enough for a rough calculation?
$16/barrel - McCain/Graham/Gingrich
$15/barrel - Wall Street speculators
Voila....follow me below on how to get to $2.50/gallon TODAY!!!!
According to McClatchy(Kevin Hall),
Once again, speculators behind sharply rising oil and gasoline prices. You can read the entire piece here http://www.mcclatchydc.com/... but here is the summary:
* US Demand is down sharply - we are a net exporter!
* Should be price is about $75/barrel
The ostensible reason for the climb of crude prices on the New York Mercantile Exchange, where contracts for future delivery of oil are traded, is growing fear of a military confrontation with Iran in the Persian Gulf's Strait of Hormuz, through which 20 percent of the world's oil passes.This is what I call the McCain/Graham/Gingrich fear factor. The first two were speaking out against General Jack Dempsey and US Policy in Israel and beating the drums of war to bomb Iran right away(remember bomb, bomb, bomb from the last election). And Gingrich(others too) keeps stoking this fire during the debates.
Still, oil's price shot up because it trades in financial markets, where Wall Street firms and other big financial players dominate the trading of oil, even though they have no intention of ever taking possession of the oil whose contracts they are trading.. Then the speculators take over.
So if you take out the impact of the last two, you are down to about $75/barrel and that converts to about $2.50/gallon. You can do the math yourself but here is what I cam up with (75/106*3.57 = $2.53) Newt Gingrich has it exactly right. He is not a dummy.
And by the way, during an election year, this is obviously a major issue and these guys can make the market move any way they want. They are market makers.
Not surprisingly, big Wall Street traders on Tuesday projected oil will rise above $112 a barrel; some such as Swiss giant Vitol even suggested $150-a-barrel oil is coming soon. When they dominate the market, as they do, speculators' bids can make their prophecies self-fulfilling.You can call me a conspiracy theory nut if you want but this is clearly not helping Obama or the economy.
What's indisputable is that oil and gasoline are not in short supply, and that demand remains weak.
Inventories of stored oil are also unusually high, the EIA said
Hence, no shortage to explain soaring prices.