Obama still doesn't get it on economics

Reuters writes: "Obama blames speculators for rising fuel prices"

Obama doesn't understand that "speculators" smooth the swings in prices. Speculators make money by eliminating price differences over time. If they think that prices will rise, they buy oil now and store it to sell when those higher prices arise. If prices don't rise, those speculators LOSE money, losing their OWN money. Obviously there is a lot of turmoil in the Middle East. If Saudi Arabia has political trouble or other oil countries have problems, what happens to the price of oil then? BY storing some oil in case those events occur, speculators will make oil available when that short fall occurs.

President Barack Obama on Tuesday blamed speculators for driving gasoline prices higher and straining American consumers, saying there was enough oil in world markets to meet demand.

Speaking at a community college in suburban Virginia, Obama said increasing production of U.S. oil and creating a market for fuel-efficient cars would help meet the country's energy challenges. . . .

Rising fuel prices are a persistent concern for the White House, which is concerned about their impact on the economy and on voters' wallets as Obama runs for re-election.

Average U.S. gasoline prices hit $3.84 a gallon last week, the most expensive since August 2008, as oil prices have soared above $100 a barrel. . . .

Obama said that global oil supply is adequate and that speculators are driving up prices significantly.

"It is true that a lot of what's driving oil prices up right now is not the lack of supply. There's enough supply. There's enough oil out there for world demand," Obama said.

"The problem is ... speculators and people make various bets, and they say, you know what, we think that maybe there's a 20 percent chance that something might happen in the Middle East that might disrupt oil supply, so we're going to bet that oil is going to go up real high. And that spikes up prices significantly." . . .