Las Vegas Sun

March 28, 2024

LETTER TO THE EDITOR:

Oil prices show true cost of ‘free market’

Oil prices have risen 30 percent in the past three months and gasoline prices make headlines every day. We are told the cause is uncertainty in the Middle East and North Africa. Yet, oil continues to flow into world markets at the same rate as it did three months ago. So why isn’t oil following the law of supply and demand? One might ask: Why the price increase?

Speculators, investment banks, hedge funds and exchange-traded funds have rushed into the market and bid up the price of oil futures contracts and derivative instruments tied to oil. In so doing they have bid up the price of oil, not based on today’s conditions, but based on what might happen. These are the same folks who bid up mortgage-related paper a few years ago, making it so profitable to create a mortgage that any carbon-based life-form could get one. And, then, stuff happened.

Many blame Washington for oil prices but I blame New York. We could drill our hearts out, and Wall Street would still find a way to squeeze us for more money. I am getting tired of contributing money to wealthy investors. The so-called free market isn’t free for all of us. It has a price and we’re paying it.

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