Wednesday, February 13, 2013

As U.S. gasoline prices soar, hedge fund oil bets near record

From Reuters: U.S. motorists searching for someone to blame for the highest gasoline prices ever at this time of year have an easy target: hedge funds who have been quietly amassing winning bets on hundreds of millions of barrels of oil.

At a filling station in Midtown New York last week, several people were prepared to blame traders on Wall Street as they paid more than $4 per gallon to fill up their cars.  "It really is not supply and demand. It's definitely speculation," said John Keegan, an exterminator with pest control company Terminate Control, who was filling up his van. A cab driver said he was convinced the price would be just $1 a gallon if the government "stopped Wall Street trading oil."

....Stories about booming U.S. oil production help create expectations among consumers for lower prices. But it remains a global market and the United States is still reliant on around 8 million barrels of crude imports every day….

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