...is a little justice.
I decided this after reading a Time article about the recent jump in gas prices. It's not because of a shortage or higher demand. In fact, demand is decreasing such that 19 refineries have been shut down. They gave some reasons for the increase, but it made me remember that during another earlier run-up, analysts figured out that a significant portion of the increase was due to speculators. The speculators, commodity traders, believed prices were going to go up, so they bought oil commodity contracts and then sold them at a profit later on, because prices were going up. The more they bought a higher prices reinforced that prices were going up: self-perpetuating prophecy.
The trick in commodity trading is to sell the contracts before you have to take delivery on the product, or actually pay for the whole thing. (The opposite condition if you think prices are going down is to sell the contract first and then buy one at a lower price before you have to actually deliver tanks of oil.) They count on the oil companies wanting to buy the contracts because they need the product.
The speculators running up prices are making money, and causing the rest of us to spend more money on our gasoline. It's just not fair or just.
For once, I'd like the speculators to buy their contracts in hope that prices are going to continue to go up, and then not have them go up because demand is going down. What if the oil companies said, "Don't need any more contracts for oil. We got plenty." The speculators would have to sell at a loss. Or have someone knock on their office door saying, "I got the tank trucks parked outside. Where's your reservoir? And where's my money? Nice of you to buy at the high prices from 3 months ago, by the way."
Poetic justice, anyone?
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