Complain about a product or service

Airlines Join Effort To Limit Oil Speculators

Market forces only partly to blame for high fuel prices, CEOs argue

By Mark Huffman
ConsumerAffairs.com

July 10, 2008

• Gas Prices Trickle Down • Why Are Oil Prices Falling? • Labor Day Gas Prices Up a Penny • Gas Prices Fall for 37 Days • Gas Prices Slide 8 Percent from Record • Gas Prices Creep Down • Oil Price Trend May Be Good News For Consumers • Gasoline Drops Below $3.90 a Gallon • Gas Prices Pull Back Slowly • Oil Prices Fall As Storm Misses Rigs • Latest Gas Price Round-Up • 'Run Your Car On Water' Scheme Could Leave Consumers All Wet • Unregulated Energy Trading Blamed for Much of Gas Price Gusher • Airlines Join Effort To Limit Oil Speculators • Questions Raised about MyGallons.com • 'Hypermiling' Is Dangerous, Says AAA • Struggling Drivers Blame Washington for High Gas Prices • What’s Really Fueling Those Sky-High Oil Prices • Credit Card Fees at the Pump are a 'Hidden Tax' on Consumers • Survey: 3 Out of 4 Angry About High Gas Prices • $2 A Gallon Gas Possible, Analysts Tell Congress • Speculators Buy More Oil Contracts Than Oil Companies • Saudis to Pump More Oil • Limiting Oil Speculators Gains Ground • Congress To Probe Oil Price Spike • Oil Market 'Saturated,' Iran Claims • Feds See No Relief from High Gas Prices • High Gas Prices Could Mean Lower Insurance Rates • High Gas Prices Good For Kia, Honda • Gas Prices Rip Past $4 and Keep Climbing • Administration, OPEC See Different Causes Of Oil Surge • Feds Probing Possible Oil Market Manipulation • Beware of Fuel Sippers Sipping High-Test • Retailers Respond to High Gas Prices with Discounts, Promotions • Rushing Into a Smaller Car Too Soon May Not Save Money • Hybrid Sales and Prices Climb in Lockstep with Gas Prices • Truckers Bemoan Burden of High Diesel Costs • Gas Prices Biting into Worker Productivity • Consumers Warned About Gas-Saving Schemes • Is Tony Soprano Controlling Gas Prices? • Oil & Gas: The New Bubble • Critics: New Federal Gas Mileage Standard Falls Short • Consumers Feeling Pain of Skyrocketing Gas Prices • New Gas Price Record Forecasts Expensive Summer Driving Season --- • More ...

The oil-speculation issue was beginning to grow legs until a couple of weeks ago. Then various economists and business leaders spoke up to denounce the idea of blaming oil speculators for the dramatic run-up in oil prices as just plain loony.

But the issue hasn't died.

Now, the CEOs of 12 major U.S. airlines have signed an open letter to consumers that appears on the Web site StopOilSpeculationNow.com. In the letter, the business executives maintain that normal market forces are only partly to blame for high fuel prices.

"There is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation," the letter says.

Noting that 20 years ago, only 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. But today oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known.

"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," the CEOs said. "Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs."

As a result of the high prices, the executives say their industry is losing thousands of jobs and is being forced to make severe reductions in service. They urge consumers to contact members of Congress, urging them to rein in commodities speculation.

The letter was signed by the CEOs of AirTran Airways, Alaska Airlines, Inc., American Airlines, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., Hawaiian Airlines, Inc., JetBlue Airways Corporation, Midwest Airlines, Northwest Airlines, Inc., Southwest Airlines, United Airlines, and US Airways.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Back to the top |