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April 18, 2012

Obama Unveils Oil Market Regulation, But Spares Financial Speculators 
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The White House has unveiled new measures to combat illegal manipulation
of the oil market amidst a period of skyrocketing gas prices. Speaking
at the White House, President Obama announced a five-step plan that
includes increased monitors at the Commodity Futures Trading Commission
as well as harsher penalties for illegal manipulation.

President Obama: "We can't afford a situation where speculators
artificially manipulate markets by buying up oil, creating the
perception of a shortage and driving prices higher — only to flip
the oil for a quick profit. We can’t afford a situation where some
speculators can reap millions, while millions of American families get
the short end of the stick. So today, we’re announcing new steps to
strengthen oversight of energy markets. Things that we can do
administratively, we are doing. And I call on Congress to pass a package
of measures to crack down on illegal activity and hold accountable those
who manipulate the market for private gain at the expense of millions of
working families."

Despite being billed as a crackdown on speculation, critics say the
administration's plan will fail to stem rising gas prices by focusing on
illegal activities instead of the oil speculation legally practiced by
the financial sector. Recent figures from Goldman Sachs show large
amounts of car owners’ gas expenditures are going directly to Wall
Street speculators who bet on oil prices. According to widely cited
estimates, gas is now costing an extra $10 per barrel because of
financial market speculation. In a statement, the advocacy group Better
Markets: "We welcome ... more cops on the beat, but the problem with
rising oil and gas prices is excess speculation. Claiming to 'crack
down' on manipulation and 'single traders' will do nothing to stop Wall
Street speculators from running amok ... and that is causing prices to
jump."

 

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