Oil prices are skyrocketing over fears of war with Iran.
February 22, 2012. Los Angeles. Get ready America, gas prices are soaring to record levels again and today, signs of shortages or profiteering were ominously evident. During a broadcast of ABC News today, a network correspondent gave her report from the parking lot of a California gas station. Her pre-taped segment, bookended with live discussions with Diane Sawyer, reported that gas prices in California shot up .16 cents in just the previous 12 hours. By the time her 2 minute segment was live again, the gas station had literally raised its price an addition .10 cents, just during the momentary break. Diane Sawyer, the reporter and this author, were shocked.
According to the laws of supply and demand, which they tell us is what America’s economy functions under, the price of gasoline should be at record lows. For one, it’s the heart of winter when America’s driving habits are at their lowest of the year. Two, this year has been without its typical sub-zero winter storms. Third, the world’s third largest oil exporter, Iran, has cut the price of oil drastically. And fourth, emerging markets like China just announced that do to a continued global recession, demand for oil would be lower than expected. So, why then has the price of gasoline in America skyrocketed to the highest level ever at this time of year?
According to Wall Street, it’s those darn “speculators” again. There isn’t any more demand for oil today than there was yesterday. What has increased is the expectation that a global or regional war in the Middle East is imminent. The past decade has shown that corporate executives and America’s elected officials work together to use our government’s secret intelligence to make millions in personal profits on the markets. Read the November Whiteout Press article, ‘Insider Trading is Legal for Congressmen’ for details. So when oil prices rocket up right before our eyes, literally .10 cents over the course of a two-minute ABC News report, this author wonders what Wall Street knows that the rest of us don’t.
Associated Press quotes Phil Flynn, a commodities trader with PFGBest, calling today’s action, “panic buying.” Speaking of fears over a military confrontation with Iran, he explained, “It’s hard to see how we’re going to get a resolution over this without some sort of confrontation.”
Seemingly behind the curve, the West Texas Intermediate crude price only rose .03 cents to close at $106.28 per barrel. Many US markets use that small, local oil supply as a barometer. Most others use Brent crude as a forecaster and its price shot up $1.24 today, to close at $122.90.
There were two breaking news items today that markets could be, and according to the corporate media accounts, are reacting to. And neither one has caused the price of oil or gasoline to rise for any legitimate reason other than profits for investors attempting to corner the market on crude oil just prior to a yet-to-happen international incident.
The first important news item today was that Iran had cut oil supplies to Britain and France. But analysts quickly shrugged off the announcement because those two countries buy very little oil from Iran anyway. Some wondered if other European countries, those who depend more heavily on Iran, may be next. If that were to happen, the market would see an influx of new buyers and prices would obviously rise. But for now, it’s only speculation.
The other news item that caused markets to stir was when the West awoke to find out that Iran had barred UN IAEA nuclear inspectors from one of its nuclear facilities. The confrontational Islamic regime also reiterated warnings to unnamed nations that it would act against any aggressors.
The result of earlier tensions with Iran, as well as this morning’s rejection of UN nuclear inspectors, has been gradual and now-rapidly rising oil and gas prices. AAA reports that the average US gas price is at a record season high of $3.58 per gallon. As shown on ABC News today, Californians are already paying well over $5.00 per gallon. The typically conservative AAA also projects the national average per gallon of gas may hit as high as $4.25 by this spring. That means pump prices well over $6.00 per gallon in cities like LA, Chicago, New York and other price-gouged areas this summer. One California gas station was already cited for price gauging today for raising its price over $6.00. Wall Street is raising its prices for oil too, and then some.
Keep in mind, nothing has actually happened yet to cause the price of gas and oil to go up. According to the AP article mentioned above, the Chinese economy stopped growing. And other sources show Iran, the world’s third largest oil producer, to be practically giving away its oil just to have some income, sometimes in exchange for food. Gas prices should be crashing right now. But instead, they’re skyrocketing. Again we ask, what does Wall Street know that the rest of us don’t?
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