In supply-side economics, Capitalism dictates that since speculators set prices, is cost is already covered?

Question

Gas prices are dictated by market demand and oil producers will only put increased oil output on the world market where it will still end up in China and Europe, whose combined buying power is greater than ours, right?

Answer 1

Not sure by what you mean in the first question...Speculators do not set prices because they never touch any oil.  They buy and sell contracts with the right to purchase oil on a certain date, but once the date comes, they have to sell the contract to someone who wants the oil.  That's why the spot price (aka the real price, determined by the supply and demand for oil) is different from the price of oil futures (set by investors).  They may be able to bring the price up through influencing the mood of the market, but futures trading does not set the price.

Increased supply would go to whoever's willing to pay for it, no matter where they are...

Answer 2

Yeah, what you sed