Analysts Predict That Fuel Prices Could Drop In 30 Days

by Heather

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Fuel prices have continued a steady climb upward and lawmakers are looking into making regulations on the very profitable business of oil speculation.

Analysts and Oil producers agree that excessive paper trading going on the oil commodity futures is to blame for higher fuel costs. These speculators never actually trade the oil, they just sell their lots of futures at a much higher cost.

Some feel that oil prices could significantly fall in 30 days if the Government steps in and regulates.

Senator Bart Stupak (Democrat - Michigan) is spearheading the initiative to impose regulations on oil speculators, called the PUMP Act (acronym for
Prevent Unfair Price of Prices) his act calls for banning Hedge and Pension funds from buying oil futures, making the transactions more transparent and increasing the amount of money an investor has to put down to purchase these futures. Speculators and investors in oil futures are only required to put down 5% - 7% in order to buy them, whereas stock requires a 50% down to buy.

You can definitely see where this leaves a lot of room for abuse.

Not everyone is convinced Federal Regulation is the answer, either. Some fear that this could drive
prices up further by driving oil traders will take their activities overseas and continue to drive the price up.

What are your thoughts? Do you think that Government regulations can help bring down the price of gas?

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