Nuclear Power & Offshore Drilling May Keep Oil Prices Artificially High
With gasoline prices at record highs in 2008, 2009 and 2010, 2011 has looked like a microcosm of the longer oil-market trend: consistent increases in pricing, fuel costs hurting small business and the middle class, slowing the pace of economic growth in the US, and—maybe most strangely of all—no national policy to motivate a rapid, comprehensive transition away from fossil fuels and the volatility and cost inefficiency of their products to the wider marketplace. Instead, we have seen a recommitment to ramping up production, expanding drilling and exploration, and prioritizing local importation (from Canada and Mexico), instead of real coordinated policy planning to end dependency on foreign-sourced fuels.
Oil Price Surge Result of Record High Oil Market Speculation
CNBC is now reporting that the recent surge in oil and fuel prices has come amid record high speculation in oil markets. Speculators are investors with no commercial interest or physical connection to the resource itself, whose money represents a straightforward gamble on the value of the commodity in question.
Oil market critics have observed the rampant speculation is imposing an indirect “penalty” on consumers for the spread of democratic values and the fall of dictators friendly to the industry. According to CNBC’s reporting: “Traders without a commercial interest in oil held 430,118 contracts as of March 1, a surge of more than 25 percent since the revolt in Libya began capturing global headlines in mid-February.”
