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Page added on April 17, 2012
Obama launches attack on oil speculators
President Barack Obama called Tuesday for greater federal oversight of oil markets, his latest effort to head off market manipulation as gas prices stay high ahead of the peak summer months.
“We can’t afford a situation where some speculators can reap millions while millions of American families get the short end of the stick. That’s not the way the market should work,” Obama said in a Rose Garden speech, laying out a $52 million proposal largely aimed at beefing up the Commodities Future Trading Commission’s oversight and enforcement of the oil and gas markets.
The administration needs to “work extra hard to protect consumers from factors that should not affect the price of a barrel of oil,” he said. “That includes doing everything we can to ensure that an irresponsible few aren’t able to hurt consumers by illegally manipulating or rigging the energy markets for their own gain.”
Obama wants Congress to approve new funding for at least a six-fold increase of “cops on the beat” to stop market manipulation and illegal speculation, a tenfold increase in civil and criminal penalties for manipulation and new funding to update the CFTC’s technology to monitor markets. Obama is also taking executive action to share the commission’s data with the Council of Economic Advisers.
The White House declined to predict how the moves would affect gasoline prices. “I’m not going to speculate about this provision or any other provision and the specific effects it would have on the price at the pump,” Brian Deese of National Economic Council said.
The president has blamed oil speculators for rising prices before, and created a task force a year ago to deal with the issue. But the task force has met only a handful of times and has not issued a public report, McClatchy reported last month.
Aware of that vulnerability, Republicans were skeptical of Obama’s proposal Tuesday.
GOP presidential candidate Mitt Romney didn’t think much of the plan, saying that going after speculators won’t lower prices at the pump. He also attacked the White House for trying to make greens happy.
“While American families struggle to pay gas prices that have doubled on his watch, the President’s only solutions are to target oil and gas producers for higher taxes and now to dramatically increase federal regulation,” Romney said in a statement. “And they will not distract the American people from the president’s consistent record of sacrificing America’s energy future to appease the environmental extremists in the Democratic Party.”
Oil and natural gas magnate T. Boone Pickens also took issue with Obama for invoking Enron, the infamous Houston-based energy company that went bankrupt in 2001.
“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,” Obama said.
“And for anyone who thinks this cannot happen, just think back to how Enron traders manipulated the price of electricity to reap huge profits at everybody else’s expense.”
Pickens thought the Enron comparison was out of bounds. “To waste time comparing today’s #energy commodity mkts to Enron is insulting. #Enron was a bunch of crooks,” Pickens tweeted. He later added: “Be careful, the next card will be SPR release. That’s the ultimate market manipulation.”
5 Comments on "Obama launches attack on oil speculators"
DC on Wed, 18th Apr 2012 12:21 am
Of course Mr Obama wants to go after
‘speculators’, and want to know why. Hell never find any. O they exist all right, but how do you define one? What do they look like, do they wear funny hats. or have a silly walk to make it easy to pick them out in a crowd? And last I heard, NO country, much the Us, have any law against speculation, if anything its widely encourages. What does he think the 2008 bubble was a resutlt of…rational thinking? …ffs.
Speculators are such an easy target becuase theyll never be found. They are like monsters under the bed. Thus, the appearance of leadership and concern is maintained for Mr Obama while nothing changes.
Arthur on Wed, 18th Apr 2012 12:34 am
Does anybody here have an idea of the size of the above ground storage capacity of oil after it has been pumped up. How many millions of barrel? How many months of world consumption. One would think that the capacity to speculate with oil is proportionate with the storage capacity. Any figures? Links?
BillT on Wed, 18th Apr 2012 12:45 am
If there were plenty of oil, speculation would not happen. It is pure political Bull Sh!t and nothing more. Obama has as much control over the price of oil as I do. None. Oh, he can cause problems with production or distribution that increases the price, but nothing to reduce it. Frustrating for an ‘all powerful’ empire isn’t it? An Emperor with out any clothes…lol
SOS on Wed, 18th Apr 2012 7:42 pm
Oil is traded on the free markets and as all commodities and anything else freely traded speculation is the name of the game. Thats how it works. The president is using this as a “red haring” to divert attention from the truth.
The only solution to trading oil for profit is to take it off the commodities excange making buyers take delivery.
Dont be fooled by our president. He is shielding the truth for political gain or is a flat earther. It is the politics he favors that is creating energy shortages. The facts are inescapable.
If politics favored orderly development within 10 years we could fully fund social security, pay off the national debt and balance the budget. Politics are causing the illusion of peak oil and causing a lot of human suffering.
Because its a global oil market the policies of our president are hurting people everywhere around the globe.
SOS on Wed, 18th Apr 2012 7:50 pm
markets are finely balanced. Its expensive to overproduce. Short term trades are mostly driven by supply/demand rumors or other production/distribution problems. Stopping a pipeline that could have distributed a lot of new, valuable crude to end users is a good example of how the politics of distribution can affect price.
There is pressure on supply up and down the supply change. One of the biggest restrictions on oil supply is the fact that only 3% of available federal lands are open to leasing and on that drilling permits are down 36% under this president.
After that come the endless regulations, restrictions, taxes etc, all serve as political bottlenecks to increased production.
Supply shortages and the resulting higher prices are political in nature. If politics changed and supported orderly development we could easily fund social security, pay the national debt and balance the budget.
Its true, oil is now a global market and the destructive polical policies in place in the United States are hurting people terribly around the globe.