Report: Oil Speculation Is Jacking Up Gas Prices Dramatically
AMHERST, Ma. (CBS) -- Some University of Massachusetts Amherst professors have authored a study for the Public Interest Research Group, which concludes that speculation in the oil futures market is having a big impact on prices at the pump.
As WBBM Newsradio 780's Mike Krauser reports, the report says a decade ago, speculators controlled less than 30 percent of the oil futures market.
Today, they control more than 70 percent.
The result, the report says, is that consumers are paying about 80 cents more than they should be paying for a gallon of gas.
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"It's not often that we agree with the CEO of Exxon-Mobil," said Celeste Meiffren of the Public Interest Research Group.
Meiffren notes that Exxon-Mobil chief executive officer Rex Tillerson said Wall Street speculators are driving up the price of oil by 40 percent.
"And he actually estimates that the true production price of oil today is $60 to $70 a barrel," Meiffren said.
But the actual price of oil is just over $90 right now.
"So considering the U.S. economy as a whole, this translates to a speculation premium of over $1 billion, just for May alone," Meiffren said.
Meiffren says the Wall Street Reform Act required that limits be placed on speculation by January of this year, but, she says it's not being enforced because of the lobbying by Wall Street firms.
Chicago's gasoline prices remain the highest in the nation, ranging from $3.64 to $4.59, according to ChicagoGasPrices.com.
