The Gasoline Price Conspiracy

Here is my LTE to ABQ Journal in response to yesterday’s LTE by Chuck MIttlestadt:
Chuck Mittlestadt’s letter to the editor of October 4 alerts us to the big oil—Bush administration “conspiracy” to drive down gasoline prices just before the election. After this “political ploy to influence your vote,” according to Mr. Mittlestadt, you should not be “upset when it zooms back well over $3 a gallon right after the votes are counted.”
As I reread Mr. Mittlestadt’s letter I wonder if it is meant to be satire. But assuming it is not, let me point out how Mr. Mittlestadt and others confident of the “conspiracy” theory of gasoline prices can profit at the expense of the conspirators and their fellow travelers. The December contract for unleaded gasoline futures is currently trading at roughly $1.50 per gallon on the New York Mercantile Exchange. All Mr. Mittlestadt needs to do is max out a long position in December unleaded gasoline futures. The exchange limit is 5000 contracts, and each contract represents 42,000 gallons. Do the math: Mr. Mittlestadt can go long for 210 million gallons of gasoline (all that is required is that he put aside little margin in case of an unexpected price drop). If the post election price zooms up by a mere 50 cents per gallon, he will be $105 million richer!
I eagerly await the arrival of December to hear Mr. Mittlestadt and other conspiracy theorists crow about their new riches and the lesson taught to those greedy conspirators.
Update 10/6/06: Check out Coyote Blog for more insights. There is a nationwide letters-to-the-editor campaign being put on by the economic ignoramuses.