American Citizens News Network

April 22, 2008

The Facts

The price of a barrel of oil is now increasing an average of $1 per day. Oil prices are up 23% this year, 16% in just the first three weeks of April. A gallon of gasoline is going up an average of 12 cents per week. Later reports say gasoline is averaging an increase of 5 cents or more per day. A Lou Dobbs report quotes Public Citizen as saying that the current price of gasoline is 20% higher due to speculation by hedge fund managers, which is helping make these managers rich beyond imagination. The same Lou Dobbs report says these high prices helped earn annual paychecks of $2 billion for some hedge fund managers.

My View

The above 20% quote by Lou Dobbs means that gasoline is over 70 cents per gallon higher because of these hedge fund managers. Even without that 20%, gasoline and oil prices are way out of line. The average cost of producing a barrel of oil off shore in the US averages less than $30 per barrel. I know some reports show that as being much higher, but having a lot of experience in the oil industry, I can tell you that those reports are inflated.

I have written several posts on the subject of oil, including one report on these hedge fund speculators. In the latter, I said that the entire world economy and millions of people’s lives are being destroyed in order for a few speculators to get much richer than they already are. I suppose a $1 billion annual income is just not enough for some hedge fund managers. They want to double-down on a sure thing; for certain a sure thing if you are in complete control of the bet. Even pro-oil man Ali Velshi of CNN says that most experts are reporting that oil should be between $60 and $80 per barrel based on supply & demand. Those figures agree with John Hofmeister, president of Shell Oil’s US operations, who said on March 20 of this year that triple digit oil was way out of place. This being the case, a gallon of gasoline should be around $1 less than it is today. So even though the Hedge Fund Association is denying responsibility for the inflated oil prices, they are lying; which makes them this month’s poster child of my personal slogan – Truth is Truth, Lies are Lies.