Gasoline, Oil Prices | featured news

With gasoline prices hovering at $4 a gallon nationally, many Americans are making tough choices: scaling back summer vacations, driving less or ditching the car altogether. Some seniors are choosing a tank of gas over their prescriptions....

Rex Tillerson, the boss of ExxonMobil admitted last week that the price of oil–based purely on supply and demand- should be in the $60 to $70 a barrel range. The reason it’s above $100 a barrel, Tillerson explained, is due to the oil majors using futures contracts to lock in current high prices, and speculation that is engineered by the high-frequency trading of quantitative hedge funds.

Oil prices tumbled nearly 5 percent on Wednesday, as easing supply concerns sent gasoline into a tailspin that briefly forced trading on the New York Mercantile Exchange to stop.

Oil prices plummeted by almost 9 percent on Thursday as traders worried that American drivers were beginning to balk at the price of gasoline.

Oil consumption has fallen, demand from U.S. motorists for gasoline is flat at best and refiners that turn crude into fuel are operating well below capacity. Yet oil prices keep marching toward $90 a barrel, pushing gasoline toward $3 a gallon in many markets, and prompting American drivers to ask, "What gives?"

Blame it on the same folks who brought you $140 oil and $4 gasoline in 2008: Wall Street speculators.

Crude oil rose to a seven-month high and gasoline surged after Goldman Sachs Group Inc. said prices may reach $85 by the end of the year as demand recovers and supplies shrink.

The U.S. price of gasoline jumped 19 cents a gallon during the past two weeks, but remains well below prices from a year ago.