Opinion L.A.

Observations and provocations
from The Times' Opinion staff

« Previous Post | Opinion L.A. Home | Next Post »

Pain at the gas pump: Round up the usual suspects?

February 6, 2012 |  1:50 pm

$10 billion has been placed in the gasoline futures markets by large hedge funds and commodity pools -- and they're betting that gasoline prices will keep climbing

So did you bet on the Giants or the Patriots in the Super Bowl?

It doesn't really matter. Because you know what the smart money's on? Gasoline.

That's right: While you and your buddies were putting down $10 or $100 on a football game, $10 billion has been placed in the futures markets by large hedge funds and commodity pools -- and they're betting that gasoline prices will keep climbing.

So, anyone know a good gasoline bookie? Or can someone give me directions from the sports book area in Caesars to the commodities room?

Actually, that won't be necessary: I can't afford the gas to drive to Vegas.

That's because while the hedge fund guys are doubling-down on gasoline prices, you and I are the ones left feeding the slots, er, pumps.

As The Times reported Monday:

January is typically a month of falling gasoline prices because fuel demand traditionally falters in the slower travel weeks that follow the end-of-the-year holidays.

Not so this year. The last month was the most expensive January ever for retail gasoline as prices averaged out at $3.37 a gallon, according to the Oil Price Information Service (OPIS) in New Jersey. That compared with the previous record average for the month of $3.095 a gallon SET last year. ...

In California, the average cost of a gallon of regular gasoline was $3.771, up 2.4 cents since last week. That was also 36.5 cents a gallon higher than the old record for Feb. 6, which was set just last year.

Of course, it's not just speculators who are driving up the price of gas.

High oil prices was one reason. Refineries exporting large amounts of fuel overseas was another.

And as those late-night infomercial guys say: But wait, there's more:

Patrick DeHaan, senior petroleum analyst for GasBuddy.com, said, "Gasoline prices tend to start moving significantly higher toward the end of February and into mid-March, so motorists should be preparing for higher prices."

You might think that about now I'm going to start ranting -- to blame someone for all this. 

You know: It's President Obama's fault; after all, he's, well, the president.

Or: It's Mitt Romney's fault. He's one of those rich guys who makes money from, uh, money.

Or: It's the evil oil companies. That's an oldie but a goodie.

But that's not fair. 

No, I'm blaming high school and college guidance counselors. 

After all, not one of them ever advised me to major in hedge funds or commodities trading. How about you?

Talk about a failing education system: There it is in a nutshell. You, me and that worthless brother-in-law of yours are working 9 to 5 and buying lottery tickets, while someone somewhere apparently whispered to the chosen few in school: "Hedge funds."

It's enough to drive you crazy.

Except gas costs too much to make the trip.

ALSO:

Refloating the housing market

A Puritan's "war against religion"

College: Just a six-figure day care? 

-- Paul Whitefield

Photo: The average price of a gallon of regular gas in California has risen 2.4 cents since last week and 36.5 cents since a year ago. Credit: Luis Sinco / Los Angeles Times

Comments ()

Advertisement










Video