Airlines take off on oil speculators

An interesting email arrived today from Northwest Airlines. Normally these emails are full of exotic destinations they would be more than happy take me to if only I would be willing to buy a ticket. But this one was different. It asked me to visit StopOilSpeculationNow.com and help put a stop to oil speculators that are driving up prices and hurting their bottom line. See this earlier post for more.

Here’s a quote from the letter:

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

When you follow their link, you’re welcomed to S.O.S. Now and an open few paragraphs blasting speculators. It also includes these lines:

Every time you buy products such as food or gas, you are impacted by unregulated, secretive and often foreign commodities futures markets. Speculators in these markets are increasingly buying and selling commodities such as oil even though they have no intention of using the product.

I’m glad to see they make the connection to food.

All the major airlines have signed on, but so have some truck and bus associations, gas and auto dealers groups and the Petroleum Marketers Association – the folks who sell gas, but don’t make it.