With gas prices rising to record highs and the price of a barrel of oil climbing further than most people would’ve ever imagined, the US Congress finally put oil executives on the spot to explain why. One at a time, head honchos from the five major oil companies, Chevron, BP, Shell Oil, Conoco Phillips and Exxon Mobil, wrung their hands, shrugged their shoulders and tried to justify what’s happening by stating that the law of supply and demand is to blame for the soaring prices at the pumps.

Blaming the market for the price increases must have seemed like an easy way out for these greedy oil execs, however, it doesn’t take much investigating to discover that “supply and demand” have very little to do with why we’re paying more and more every time we fill up.

In previous years, when consumers suffered sticker shock as a result of higher gas prices, that distress was always caused by an interruption in supply. For example, the Arab oil embargo caused gas shortages in 1973, which resulted in not only higher gas prices, but rationing as well as long lines at the pumps.

Another instance of a gasoline price spike in the late 70’s was also caused by yet an additional shortage, which once again was in fact caused by the law of supply and demand.

The latest price hike in the United States which was caused by an actual supply shortage happened in 2005 when Hurricane Katrina slammed into the Gulf Coast oil refineries and stopped production.

After Katrina is when this new trend in oil pricing bubbled to surface, a pricing trend which has less to do with real world supply and demand and more to do with Wall Street commodities brokers and traders driving money into oil futures, a shift that has caused prices to go increasingly higher.

This year, oil prices have climbed to upwards of $130 a barrel, in spite the reality that there has not been any disruption in supply and no surge in demand. Truth be told, the oil industries’ own figures show that the world’s oil production is up….demand in the U.S. is slowing down and the gasoline reserves in the United States are higher than they’ve been in more than 15 years.

The reason for the huge reserves in the U.S. is because motorists in America have adopted a more conservative attitude due to the outrageous prices at the pumps. Unfortunately, the consequential decline in U.S demand for gas hasn’t provided any relief at the pumps. Quite the opposite, gas prices have continued to spike.

Subsequently, if the cause of high gas prices is not supply and demand, what is the cause? Because, investors have moved their focus away from the ruined real estate market and are pouring their money into commodities such as gold, corn and oil, thereby manipulating oil and gas prices. As the oil prices continue to climb, investors who bought low are able to sell high and, unfortunately, it’s the consumer who ends up paying the price at the pump.