It all started earlier this year when presidential hopeful Newt Gingrich promised voters that if elected to the White House, he would make sure gas prices dropped to $2.50 a gallon. OK, so maybe it happened before the former speaker of the House made his bold promise. In fact, it happens every year around this time: speculators — both illegal and legal — get blamed for rising oil prices, which are then passed onto consumers at the gas pump. Speculators, either single individuals or companies, are looking to gain from price fluctuations in commodities markets without an intent to actually purchase a physical product. Buying and selling by these market participants, critics say, has exacerbated volatility in the commodities markets. “The traditional role of speculators has been to allow a transfer of risk to those who want to get rid of the financial risk to those who will accept it,” explained Branko Terzic, executive director of Deloitte Center for Energy Solutions. “They need to do that because the producers in the market — whether a farmer or oil company — have to make large capital investments, and they like the certainty of the price where they can lock in the price today for a future sell.” He added that speculators accept that price risk to facilitate the producers being able to fund their operations and their continuing developments. Read more: http://www.foxbusiness.com/markets/2012/04/05/higher-gas-prices-blame-speculators/#ixzz1rY0Wa5Pu