How oil speculators may be driving up prices

[antigop]

http://www.mcclatchydc.com/economics/story/41360.html

Michael Greenberger thinks that speculation is a major factor, and he knows a lot about the complex global oil market. He directed the division of trading and markets for the Commodity Futures Trading Commission from 1997 to 1999. That body regulates the trading of contracts for future deliveries of commodities, including crude oil, called futures, which drive oil prices. Now a law professor at the University of Maryland, Greenberger told McClatchy why he thinks that financial speculation is driving up oil prices.

Q. How do speculators drive up oil prices?

A. Speculators are able to drive up crude oil prices today because they're allowed to trade in the U.S. in futures markets not overseen by U.S. regulators. Therefore, they are free to dominate these markets by taking huge positions within them to dominate them; and there is an additional fear that, because of a lack of oversight, they may be engaging in manipulative practices — i.e. wash sales and false reporting that would be barred in a regulated environment.

And here is what the CFTC can do RIGHT NOW, according to Greengberger:

The CFTC has the power to terminate its deference to British regulation of that Atlanta-based institution trading in the U.S. and controlling 30 percent of the major U.S. crude-oil contracts. They have authority to do so immediately and to bring ICE under full United States regulatory oversight.

[Rick Myers]

1. Heard a report today that speculators are buying up STORAGE space

To HOLD OIL until the price increases even further.

[texastoast]

2. Don't you love those oil business people??

They shut in wells also here in the U.S. until the price goes up.

So what they want is to be able to drill offshore and in ANWR but not sell you the oil until gas is $20/gallon.

[Hugin]

3. k/r