Oil Prices Based on Futures

Something that came to light the other day was someone telling me that the current oil prices aren’t necessarily because of a shortage or high demand for oil right now, but on the assumption that something could happen in the world to disrupt our oil supply.

A former stock broker told me that the reason oil is hovering around $100 dollars a barrel is because speculators have driven up the futures on oil hedging their bets that something could happen in the middle east that could spike oil prices.

Hurray for a free economy! Hurray that we have the right to drive up oil prices just to make a quick buck. The same speculators would never set foot in a casino in Las Vegas because they feel gambling just isn’t right. Isn’t that what they are doing with our economy? Betting that the world takes a tumble and they can cash in their futures!

Isn’t there something our government can do to stop speculation on oil futures. I am not sure what could be done, but when I see fuel approaching $4 dollars a gallon, I can’t help to wonder what negative effect that would have on our economy as a whole. I have already talked to several owner-operators who are going to go out of business if fuel climbs much higher.

The company who my company hauls for refuses to pay a fuel surcharge and decided this week to ship everything under 300 miles LTL! Without warning, our hours have dropped in half within a week! Our company cannot afford to haul at the prices they are offered at this shipper. Eventually the shipper is going to have to pay some sort of fuel surcharge to keep the trucking companies hauling their products in business. When the price of shipping goes up, you can bet that the retail price of goods and services at the box store will eventually go up. When the retail price of the goods goes up, the people performing the work such as painters, contractors, etc. must raise their prices. It’s a never ending food chain that affects everyone, including the shipper. When a shipper refuses to raise their rates or pay a fuel surcharge, it eventually hurts us all!

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