60 minutes had an EXCELLENT investigation on the fluctuation in oil prices, I’ll try to summarize:
1. As stocks began to fall in early 2008, investors moved money into commodities, much of that oil.
2. There was way more money in the oil markets than there was actual oil!
3. Early in 2008, according to the US Gov’t oil supplies were increasing while demand was going down.
Bottom line: We were paying $4.50 per gallon due to nothing more than speculators and investors.
One of the largest oil investors was CalPERS – so now California gov’t workers will not only take down California, they want to take down the entire country!
They also connected much of that speculation all the way back to Enron (who lobbied hard for commodity market deregulation).
Why is oil cheaper now? According to 60 minutes, one big reason is that congress was threatening increased oil market regulation.
