09.10.08

Senators Dorgan and Cantwell Renew Charge to Stop Excessive Oil Speculation

New independent report details how excessive speculation manipulated the energy futures market; hearing on oil speculation will be held next week

(WASHINGTON, D.C.) – U.S. Senators Byron Dorgan (D-ND) and Maria Cantwell (D-WA) today renewed their efforts to crack down on irresponsibleoil speculators, raising questions about speculators’ outsized influence over the energy futures market, the cost of energy, and perhaps even the federal agency responsible for regulating them. The Senators said hearings will be held starting next week to address volatileoil speculation.
 
Dorgan and Cantwell pointed to a new independent report issued today that outlines how speculators drove oil prices to record levels this summer, and then suddenly switched their position and “began a mass stampede for the exits” starting on July 15. Issued by Michael W. Masters of Masters Capital Management and Adam K. White of White Knight Research & Trading, the report uses data from the Commodities Futures Trading Commission (CFTC), the Energy Information Administration, and investment sources to show how speculators, not supply and demand or a weak dollar, was the leading cause for record energy prices.
 
“While these speculators make enormous profits on both sides of the trade, it was the American people stuck with the bill every time they filled up their gas tank this summer,” said Dorgan, who introduced legislation to crack down on energy speculators earlier this year. “This report is another example of how oil speculators can control the market while the federal agency, which should be protecting American consumers, has been dead from the neck up.”
 
“Eighty percent of Americans believe that oil speculators are manipulating the price of oil, and Mr. Masters’ report proves that they are right,” said Cantwell.  “Americans won’t stand for being held up at the pump by these Wall Street scoundrels every time they fill up their gas tank."   
 
Senators Dorgan and Cantwell say this report is yet another reason to renew the charge to hold hearings, examine specific trading patterns of large energy speculators, and press the CFTC for answers to why the agency repeatedly said no speculation was occurring despite growing evidence to the contrary.
 
“There are a lot more questions than answers out there about how oil speculators were able to drive prices up and down, while the CFTC was asleep at the switch. But, what we do know from all of this is that energy speculation exists, it has hurt consumers, and the Congress needs to pass legislation immediately to stop oil speculation,” said Dorgan.
 
"This analysis illustrates that when oil speculators poured large amounts of speculative money into oil markets, prices skyrocketed- just as they were hoping. This research also shows when Congress began pressing the CFTC and developing legislation to end dark oil markets, speculators ran for the exits and pulled $40 billion out of the commodities market, dropping the price of oil by $40 a barrel.  And when the speculative money got pulled out, prices tumbled.  This is why I continue to hold up the CFTC nominations and called for the IG investigation into the CFTC’s bogus reports that seem to be pushing an agenda rather than truth,” said Cantwell.
 
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