Crude oil futures are written by the same financial people and the premium is paid to the oil companies. The oil company receives additional profit from these option premiums as well as the fixed price they have contracted. Despite the unrest in the Middle East, there is no shortage of supply for gas and oil. In addition, unlike agricultural futures, institutional investors such as pension funds are now investing with hedge funds that trade oil futures. These investments like the sub-prime mortgage securities are highly speculative and subject to a fall in prices if there are not enough new investors to keep this Ponzi scheme going. The investors are solicited by bankers who in conjunction with the oil companies create artificially increased futures prices.
As a result, these oil companies are fixing the price of oil by manipulating the futures market which is a disaster for our economy. Oil companies are ruining the environment as well as the economy and it is incumbent upon governments to intervene with the existing anti-trust laws that have never been used against them. The problem is that the Justice Department and Congress do not understand the economics of oil and the "shell game" that I previously explained. Hopefully that will be the first step to solving the problem.
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