OPINION

Speculation in oil gouging the market

Government officials are unnerved by the realization that, of the estimated 3.7 inflation rate for August, about 1.1 percent is attributed to the climbing price of oil. In other words, about one-third of the rise in inflation can be put down to the jump in oil prices across international markets. The world’s most credible political and economic players admit that the precipitous rise in oil prices is, for the most part, caused by speculation and is not the result of any short- or long-term scarcity of oil resources that are essential for the smooth functioning of the global economy. In fact, although international markets are glutted with oil, prices are stubbornly stuck above $65 per barrel. German Chancellor Gerhard Schroeder warned that about $30 per barrel of the current oil prices should be attributed to international speculation. The assessments of the International Monetary Fund (IMF), to be announced in a September 24-25 meeting, are expected to echo the criticism of the incumbent German leader. From the beginning of the current year, profiteers have bet hundreds of billions of dollars on mercantile markets and continue to invest more money, pushing oil prices upward. Oil is being treated as a stock market commodity, hence alienating it from the needs of the economy. Speculation in oil prices has to stop. The world economy cannot be held ransom to either stock market games or the price gouging of oil giants which are aggressively promoting their economic interests by distorting the rules of supply and demand. Governments must cooperate in cracking down on the speculative manipulation of oil prices in order to bring them back to normal levels. The US administration of George W. Bush has a central role to play in this effort. The international community expects Washington to elevate the well-being of the world economy over the interests of the big oil companies that have in the past supported the Republican administration. Greece, like most of the world, is eagerly awaiting a shift in US policy.