Saying that “net speculative positions are four times as high as in June 2008,” investment banker Goldman Sachs “issued a warning that the price of oil has grown out of control due to excessive speculation.” The world’s largest commodity trader, Goldman Sachs told its clients that it believed speculators like itself had artificially driven the price of oil at least $20 higher than supply and demand dictate. They even admitted that their work to drive up prices has harmed the American economic recovery, pointing to “nascent signs of oil demand destruction in the US.”
Ed Schultz, who’s been one of the few voices in the media sounding the alarm about unregulated speculators, yesterday bashed Fox News for selling the “drill baby drill” line in response to the surge in the oil markets. Former commodities trader Dan Dicker explained to Schultz that the CFTC is failing its mandate to control Wall Street:
Bottom line, it is not supply and demand.
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Dicker warned that $5 gas is probably unavoidable as things stand. “There’s nothing really to stop it.”