Sanders: Wall Street Speculation Driving Oil Prices Higher

BURLINGTON, June 2 – Senator Bernie Sanders (I-Vt.) said today that excessive speculation on oil futures by Wall Street hedge funds and such major financial investment houses as Goldman Sachs and J.P. Morgan Chase are driving oil and gas prices much higher than they should be based on supply and demand fundamentals.

Gas prices in Elmont, New York, June 2, 2008: Photo by scarlatti2004 (CC)

Article continues below...

There are estimates that 25 percent to 50 percent of the $126-a-barrel cost of oil is attributable to unregulated speculation on oil futures. In essence, Wall Street firms are making billions as they artificially drive up oil prices by buying, holding and selling huge amounts of oil.

“In the coming weeks I will be working hard to pass legislation that reregulates trading in oil futures so that we end excessive speculation,” Sanders said. “Hedge funds and major Wall Street financial institutions are making tens of billions of dollars by buying and selling oil futures, while working people are paying $4 for a gallon of gas and seniors wonder how they’ll heat their homes next winter.

“Further, I want to see a firewall established within companies like Goldman Sachs, which make billions buying and selling oil at the same time as their analysts forecast higher oil prices in the future. Every time Goldman Sachs analysts tell us that oil prices are going up, they create a momentum to drive prices higher – making huge profits in the process.”

Source: Senator Bernie Sanders