Honest, paywall-free news is rare. Please support our boldly independent journalism with a donation of any size.
While the issues that resonate the loudest through the various #OccupyWallStreet protests surround bank bailouts, dirty housing foreclosure tactics and crony relationships with politicians, a new report from the Consumer Federation of America indicates that the price of oil has been artificially driven up (…way up) by Wall Street speculation as well, resulting in a direct pocketbook pinch for everyday Americans. From the report brief which appears in its entirety below:
At the end of 2003 the price of West Texas Intermediate (WTI) crude oil (the “benchmark” for U.S. oil) was about $30/bbl and the value of outstanding futures contracts (called “open interests”) for WTI was less than $20 billion. Wall Street firms like Goldman Sachs and Morgan Stanley and hundreds of hedge funds led the charge into the oil markets, creating products that “financialized” commodities. Index funds and pension funds soon followed. In July of 2008, when WTI hit its peak price above $140/bbl, the average value of open positions was over $150 billion. U.S. oil consumption declined eight percent over that period (global oil consumption was essentially flat). Eight times as much money chasing the same amount of oil is a prescription for price escalation.
The brief explains the horrible impact this has on American households in plain terms:
The oil price spike of the past year, which saw gasoline prices increase by over a dollar from the summer of 2010 to the summer of 2011, will drive household expenditures on gasoline to a record average of $2900 this year. Crude oil is about $30 higher than costs or historic trends justify, generating needlessly high prices for petroleum products that will drain about $200 billion out of the economy.
$200 billion is one percent of GDP and two percent of consumer spending…NATIONWIDE. This is a huge deal.
Wall Street’s Oil Speculation Clobbers Main Street’s Consumers (CFA)
A terrifying moment. We appeal for your support.
In the last weeks, we have witnessed an authoritarian assault on communities in Minnesota and across the nation.
The need for truthful, grassroots reporting is urgent at this cataclysmic historical moment. Yet, Trump-aligned billionaires and other allies have taken over many legacy media outlets — the culmination of a decades-long campaign to place control of the narrative into the hands of the political right.
We refuse to let Trump’s blatant propaganda machine go unchecked. Untethered to corporate ownership or advertisers, Truthout remains fearless in our reporting and our determination to use journalism as a tool for justice.
But we need your help just to fund our basic expenses. Over 80 percent of Truthout’s funding comes from small individual donations from our community of readers, and over a third of our total budget is supported by recurring monthly donors.
Truthout’s fundraiser ended last night, and we fell just short of our goal. But your support still matters immensely. Whether you can make a small monthly donation or a larger one-time gift, Truthout only works with your help.