Oppenheimer Funds analyst Fidel Gheist recently said, "There is absolutely no shortage of oil. I'm absolutely convinced that oil prices shouldn't be a dime above $55 a barrel. I call it the world's largest gambling hall. It's 24/7. Unfortunately, it's totally unregulated. This is like a highway with no cops and no speed limit, and everybody is going 120 miles an hour."Only 22 percent of the oil that is traded on the open market will ever be used. The remaining 78 percent is traded by "speculators" — those who trade the commodity but have no intention of ever using it. There has been a 71 percent increase in speculators in the market since 2000, contributing to the unprecedented drive up in the price. The airlines are asking for a fair, transparent and balanced energy commodities market, with legislation that includes: fully closing all loopholes allowing institutional investors unlimited investment; ensuring all energy traders, including those trading on foreign boards of trade, are subject to the U.S. exchanges limits and increasing margin requirements and imposing appropriate disclosure.
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