Obama Oil Speculation Task Force Ignores Oil Speculation

Monday, March 05, 2012
Despite a growing consensus that speculators are behind recent price increases, the government’s almost year-old oil speculation task force has done little more than talk about the problem. From the beginning of January to the end of February, the average retail price per gallon of gasoline jumped 42 cents from $3.30 to $3.72–a spike of 12.7% in just eight weeks. This year’s pain at the pump is eerily similar to last year’s, when gas prices jumped 77 cents from $3.19 to $3.96 in just eleven weeks between February 21 and May 9–a leap of 24.1%.
 
In response to last year’s problem, in April 2011, President Obama and Attorney General Eric Holder announced the creation of the Oil and Gas Price Fraud Working Group, which was supposed to root out speculators who buy and sell oil futures based on the predicted price of oil. The trouble is, oil industry experts now estimate that financial speculators account for about 65% of the trading in oil futures contracts, up from 30% historically, leading many to conclude that the reversed ratio explains the high and volatile oil and gasoline prices. One analysis estimated that as much as 30% of the current price can be attributed to speculation. While the task force, which has met only four or five times, has been assisting a Federal Trade Commission investigation into gas prices since June 2011, a key problem is that most price speculation is legal, unless a trader relies on insider information or commits fraud, both of which can be difficult to prove.
 
Nevertheless, the fact that the U.S. today is producing more of its own oil than it has in years, and supply is actually outstripping demand, has many demanding action on gasoline prices. This year, however, the President is emphasizing his proposal to eliminate tax breaks that net the oil companies about $4 billion per year. Given the lack of success of the oil speculation task force, those tax breaks are probably safe for now.
-Matt Bewig
 
To Learn More:
Whatever Happened to Task Force on Oil Speculation? (by Kevin G. Hall, McClatchy Newspapers)
U.S. Use of Gasoline is Down, Yet Pump Prices are Up as Speculators Move In (by Noel Brinkerhoff and David Wallechinsky, AllGov)

Gas Prices Up, but so Are Profits and Exports as Refiners Hold Back Production (by Noel Brinkerhoff, AllGov) 

Comments

Harold Sledge 7 years ago
what can i say about oil and gas? what a croock of cow sh?t!!!! 1. why should we be paying more each time when a burp occurs on the earth? 2. why should oil companies and oil stockholders make a larger profit because something may occur on the otherside of the planet? why then does the price raised by $.20 or more and why when nothing happens the price drops by pennies? 3. why don't concern people research "how gas is made"on the internet? 4. why did oil refineries leave foreign countries? 5. why does china refine their oil? 6. how come oil refineries fail to report the two gallons of fuel extracted from each barrel of oil making it 24 gallon per barrel? 7. why does congress "who gets campaign money from the oil industry" question oil executives?
Earl Richards 7 years ago
greek drama, weather reports, opec, chinese demand, iran and so on, are not responsible for high oil and gasoline prices, which are causing the recession and could lead to a depression. the oil price is dictated by the fraudulent "round trip" trades of the "dark pool" trading in the intercontinentalexchange (ice) in atlanta. the international big oil/big banking cabal, or an international gang of criminals, owns ice. ice operates outside of us law, considers itself to be above the law and can commit fraud and law enforcement cannot do anything. the commodity futures trading commission has no jurisdiction over ice, influenced by big oil. ice's energy traders and speculators can ratchet-up the oil price anytime they feel like it for their own profits and on the behalf of big oil, using "round-trip" trades. google the "global oil scam" by dan jones. "paper oil" and crude oil futures markets have to be done away with. cash at the wellhead. over 75% of crude oil futures trading takes place in the ice. the nymex is a decoy market. ice is a super enron. the "enroning" of california was a test-market for ice. oil is too critical a resource to be controlled and manipulated by greedy traders, greedy speculators, greedy refiners and greedy corporations. cash on the barrelhead. to obtain a fair oil price, senator sanders and the occupiers have to investigate ice and seize immediately the trading records of ice, before they are destroyed and end the specter of ice and end this crime against humanity.

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