Charles Wallace of AOL Finance is reporting that many of the reasons people offer for soaring gas prices are not true, based on the information given by oil-industry insider Dan Dicker. Dicker, a professional trader, has spent nearly three decades in the oil market and has written a book called Oil's Endless Bid: Taming The Price of Oil to Secure Our Economy.
Contrary to public belief that oil prices are tied to greedy oil companies, wars or international crises, according to Dicker, the price of oil has nothing to do with the supply and demand of oil. It is the financial market for oil, filled with both professional speculators and amateur investors betting on poorly understood oil exchange-traded funds, which have ratcheted up the price of gas to such sky-high levels.
Wallace reports, "There is no supply issue going on here — what you have is the perception of the possibility of a supply issue," Dicker says. "A whole bunch of people are pouring money into an oil market trying to take advantage of what they perceive to be a real risk in supply. It's a marketplace that I argue should not be allowed to be wagered on like a stock or bond."
Dicker argues that greater regulation of the oil industry is needed because "no one really knows how large it is or what is going on on a day-to-day basis." The market for oil is between $8 trillion and $30 trillion, but no one really knows because traders don't have to tell anyone if they're betting for or against the oil price.
Did we mention that Dicker argues that if we lost Libya as a distributor, Saui Arabia has plenty of oil to spare? So this may be the real reason the price of oil is over $100 a barrel. This also explains why oil companies continue to make record profits despite constantly citing "shortages" as the reason for the soaring prices. One thing is for sure: the sky-high prices at the gas pump are unacceptable. Why isn't Congress doing anything about it?
Read more at AOL Finance.
In other news: The Root Recommends: 'The Immortal Life of Henrietta Lacks.'