Blaming speculators for the gasoline prices is not only wrong, it is just flat out ridiculous demogoguery. Speculators can hardly be responsible for increasing the cost of a commodity which they have no opportunity to trade in the first place. The great majority of petroleum is NEVER traded in the futures markets. The vast majorty of petroleum is traded by direct contracts between the upstream sovereign nation monopolies s and cartels such as OPEC and non-OPEC nationalized oil companies and the downstream refiners, some of whom are also nationalized entities. Only a small fraction of this petroleum produced and traded is ever traded on the financial markets.
The small fraction of petroleum traded on the financial markets is financed by the speculators, which relieves the oil corporations of the responsibility for spending their own monies to finance the petroleum inventories necessary to hedge adequate supplies to maintain a steady flow of feedstock to maintain the operation of the refineries. without costly additional shutdowns. If the financing of spot market petroleum supplies by speculators were to be ended and oil corporations had to finance their own reserve petroleum supplies, the resultant costs for the oil refiners would cause a major increase in their costs to refine and a major increase in the cost of the refined gasoline considerably higher than what is now being seen. These higher refining costs would be the result of oil refiners needing to compete to purchase the reserve supplies rather than sharing the same pool of supplies, the massive increase in costs for separate storage and transportation facilities, which are now a shared cost in the pooled market, and the increased costs to the refiner for borrowing the capital necessary to purchase and sote the reserve petroleum supplies.
The bottomline is that ignorantly blaming and scapegoating the speculators on the open capital markets for petroleum supplies used in spot market hedging of such supplies is tantamount to eating the goose that lays the golden eggs at no cost to the users of the golden eggs.
Commercial end-users of oil such as airlines and trucking companies who once dominated 70 percent of the market for market for future deliveries of oil now represent just 30 percent. Non-commercial financial speculators now dominate 70 percent of the market.
That is a fundamental shift in commodities trading. And when the supply margins are narrow, as they are now, controlling a relatively small amount of petroleum (or in this case, gasoline) can have a significant impact on pricing, as we saw in 2008.
I am not saying speculation is the only factor, far from it. The real blame lies with the nitwits such as Obama and his minions who try to sandbag production increases. But I am saying there should be position limits on those who are neither producers nor end users.