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News Opinion Readers Respond

Gasoline prices manipulated by speculators, not supply and demand

A recent article ("Pumping Up the Price" Feb. 26) on gasoline prices should make it clear to readers that the price of gasoline is no longer the result of inefficient fuel use or too much demand. Unfortunately the focus of the article was evidently on the impact of the recent gasoline price hikes to Marylanders and their corresponding life choices.

However, the article gave scant attention to the cause for these rapid-fire price hikes. Oh yes, we are told temporary price hikes are expected in the spring when refineries switch to "more environmentally friendly" formulas. But it wasn't spring a month ago when the hikes began.

We no longer hear governments preach that conserving our usage will cause the price of gasoline to fall or, if we don't conserve, prices will rise. Not only that, but an improving economy, as stated in the article, will increase demand and more price hikes.

Little discussed in the article is the role, and why it is so, that speculators (or "white shirts" as I call them) have made the gasoline market an investment vehicle based on crystal ball marketing hopes. The article said, "as long as speculative money pours in, prices will continue to go up," but there was no mention of the supply of oil.

It gets worse for consumers' pocketbooks. United States refineries are producing so much gasoline that they have to export it to other countries so that the price for Americans does not fall. Another reason they export is that they make far more money in the "export market" they do selling the gasoline to U.S. markets. One the biggest importers is Venezuela which can't refine enough of its oil for gasoline.

Of course, this strategy, as is oil market speculation, is good business, but it's getting personal to American consumers in a hurry.

Charles Herr, Baltimore

Copyright © 2015, The Baltimore Sun
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