September 16, 2011
Wall Street's Secret Oil Games

kateoplis:

By Senator Bernie Sanders

Why have oil prices spiked wildly? Some argue that the volatility is a result of supply-and-demand fundamentals. More and more observers, however, believe that excessive speculation in the oil futures market by investors is driving oil prices sky high.

A June 2 article in the Wall Street Journal said it all: “Wall Street is tapping a real gusher in 2011, as heightened volatility and higher prices of oil and other raw materials boost banks’ profits.”

ExxonMobil Chairman Rex Tillerson, testifying before a Senate panel this year, said that excessive speculation may have increased oil prices by as much as 40 percent. […]

I released records last month that documented the role of speculators and put the information on my Web site for three reasons.

First, the American people have a right to know why oil prices are artificially high. The CFTC report proved that when oil prices climbed in 2008 to more than $140 a barrel, Wall Street speculators dominated the oil futures market. Goldman Sachs alone bought and sold more than 860 million barrels of oil in the summer of 2008 with no intention of using a drop for any purpose other than to make a quick buck. […] 

Second, Congress recognized last year that excessive oil speculation must end. The Dodd-Frank financial reform legislation required the CFTC to eliminate, prevent or diminish excessive oil speculation by Jan. 17, 2011. Months after that deadline, the commission still has failed to enforce the law, and speculators still are making out like bandits.

Third, the commodity regulators’ claim that they cannot end excessive oil speculation because they lack sufficient data is nonsense. As the information I released makes clear, the commission has been collecting this information for more than three years. The time for studying is over. It is time for action.

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