Gas Prices Up Because of LEGAL Speculation; Not Manipulation, Consumer Advocate Says

An article from Yahoo! Finance

By Stacy Curtin | Daily Ticker – Mon, Apr 25, 2011 1:48 PM EDT

The average price for a gallon of regular unleaded gasoline stands at $3.86 — more than 30 cents higher than just one month ago, according to AAA’s fuel gauge report.

In an effort to combat rising prices, and presumably sway public opinion, President Obama last Thursday tasked the Justice Department with investigating the oil markets for evidence of fraud and manipulation that could artificially push up the price of gas, including the role of speculators.

Just a week before Obama’s announcement of the new task force, Goldman Sachs released a note to clients that put a number on the impact speculators were having on the price of crude oil. The report indicated that, at the time, the speculation premium was $27 per barrel of crude oil, which hit $113.46 during early trading that same day.

That translates into 70 cents per gallon at the pump, according to Tyson Slocum, director of Public Citizen’s Energy Program and a longtime consumer advocate for better regulation of the oil markets.

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