It's Just Speculation....

Do farmers who produce lots of corn set the price? I think not.

Do cattle ranchers who produce lots of beef set the price? I think not.

Do companies who explore for and produce lots of oil set the price of oil or gasoline? The answer is obvious-NO. They produce it and sell it for the market price of the commodity just like farmers and ranchers.

So why do consumers assume oil companies set the price of oil? I think it is because American consumers don’t understand how the price of commodities are set. It may be a good idea to learn this.

Corn producers, beef producers and oil producers function exactly the same—they are “Price Takers”, not “Price Makers.” They produce the goods and sell them for what the market gives them each day. Some days corn is $2 a bushel; other days it’s $5, just like beef and oil. If supply and demand were the only factors in what we pay for commodities today, I wouldn’t be writing this.

Gas is high today due to high crude oil prices, which I believe are inflated because there is no governance over how financial institutions can play in the market where the commodities prices are created. President Obama says he’s going to address this; we’ll see. It won’t be popular with those who have tons of money. You see, they use that money to speculate on the price of commodities even though they never produce, buy or sell any.

To read more, click here:

http://boston.cbslocal.com/2011/04/11/curious-why-oil-gas-prices-are-rising-so-quickly/.

Call your elected officials in Washington and tell them you want this to change!