Oct 11, 2004
Workers will have to pay much more for home heating this winter. Everyone says so – that is, everyone quoted in the media. Their broadcast message is clear: workers have no choice but to get used to it, because oil prices have shot up so high.
Whether it's gas at the pump, or electricity prices, or heating oil, or natural gas, we are always told that the supply is short, so prices must go up.
Of course, when supply is plentiful, prices never drop back down as far as they had jumped up! So already the "supply" argument is wrong. And it's wrong for this winter, too.
Even when oil prices were around $35 a barrel, much less than today's $55, professionals at funds like Oppenheimer's could say they found "no justification whatever for oil prices ... absolutely no supply shortages and demand is not so strong as to justify the current price."
Today, the Wall Street Journal reflects many other big investors' conclusion: "Oil has become a speculator's paradise." And all energy companies are seizing their chance and climbing on the bandwagon.
In other words, this winter, workers will cut corners, dial down, and even sometimes go without heat, not to pay for the actual energy they use – but to pay to put super-profits in the pockets of those who are wealthy enough to gamble in the world oil casino.