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Why are gas prices so high? (2)

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In today's Financial Post there is a fascinating story describing testimony by senior oil industry analysts at Congressional hearings into spiking oil prices. The four fellows highlighted in the FP story all encouraged Congress to curb crude oil speculators to bring down oil prices. If done quickly, the analysts believe oil would come down to the US$65 a barrel range. "I believe, based on supply and demand fundamentals, crude oil should not be abbove US$60 per barrel," said Fadel Gheit of Oppenheimer and Company. "There is no reason to think that tighter regulation would do any harm to anyone but the speculators."The only dissenting opinion in this story comes from one of those specualtors, Phil Flynn, vice president of energies at Alaron Trading, who said any curb on speculation would only have a temporary impact. Flynn also said government intervention was unwise because "the fundamentals are sound" in the oil market.So, we have experts in the oil industry crossing swords with each claiming that market principles or fundamentals back up their positions. There is probably room for disagreement here, given the complexity of commodity markets and the tenuous nature of global political events. However, regardless of which position is the more genuinely fundamental, it's hard not to conclude that the harm being done to the world right now outweighs the good done for market speculators.Read and hear more on the congressional testimony here.-30-

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About Dan Lett

Dan Lett came to Winnipeg in 1986, less than a year out of journalism school.

Despite the fact that he’s originally from Toronto and has a fatal attraction to the Maple Leafs, Winnipeggers let him stay.

In the following years, he has worked at bureaus covering every level of government – from city hall to the national bureau in Ottawa.

He has had bricks thrown at him in riots following the 1995 Quebec referendum, wrote stories that helped in part to free three wrongly convicted men, met Fidel Castro, interviewed three Philippine presidents, crossed several borders in Africa illegally, chased Somali pirates in a Canadian warship and had several guns pointed at him.

In other words, he’s had every experience a journalist could even hope for. He has also been fortunate enough to be a two-time nominee for a National Newspaper Award, winning in 2003 for investigations.

Other awards include the B’Nai Brith National Human Rights Media Award and nominee for the Michener Award for Meritorious Public Service in Journalism.

Now firmly rooted in Winnipeg, Dan visits Toronto often but no longer pines to live there.

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