Senator Bernie Sanders (I-VT), the man I'd most like to be president, wrote an editorial in The Washington Post about oil speculation.
Now I get the point of commodity futures trading. A transportation company can buy oil futures to in effect gaurantee that they won't spend more than they futures price for any oil they buy in the time period they speculate about. While sometimes they win, sometimes they lose, at least they get a set price so they can budget, figure out their fees, etc. It's a positive development to reduce volatlity in the prices of plane tickets, train tickets, bus tickets, shipping, and other big users of transportation. That provides stability to the markets so it's worthwhile.
There's just one problem. Oil futures trading no longer reflects the bets of transportation companies, but rather then bets of Wall Street speculators who work together to artificially push up the price of oil futures in order to turn a profit. And of course, who pays the difference? We do. Average citizens pay higher prices for goods that are transported, for plane tickets, for heating oil, for all sorts of things that are sensitive to movement in the energy markets.
How big is the speculation? To quote Senator Sanders:
Goldman Sachs alone bought and sold more than 860 million barrels of oil in the summer of 2008 with no intention of using a drop for any purpose other than to make a quick buck
Aware of the rampant speculation, Congress has chosen to do nothing. As per usual.
Of, by, and for the people, right?