An Article from Greentech Media
Will Big Oil and Oil Speculators Take the Enron Fall?
Or will they continue to get away with highway robbery?
By: Herman K. Trabish
April 29, 2011
With a barrel of oil now above $112 and rising, the five major oil companies are announcing Q1 2011 numbers this week and reports put profits at 40 percent above Q1 2010, despite a slowing of the economy.
Commentators from Saudi oil barons to Goldman Sachs to the AARP agree, according to Professor of Law Michael Greenberger, a former director of the Division of Trading and Markets, Commodity Futures and Trading Commission (CFTC), that oil market speculation is sending a false demand signal to the market, driving the per-barrel price far beyond the supply-demand-driven $75-to-$85 range and wreaking havoc with gasoline’s per-gallon price, as well.
It is putting a $40 premium on every barrel the oil companies sell and, according to Daniel J. Weiss, Senior Fellow and Director of Climate Strategy at the Center for American Progress (CAP), one-half to two-thirds of that premium is likely being reinvested in oil company stock, driving the stock price up and enriching shareholders, executives and the board in a classic case of the-rich-get-richer.