27 April 2006 17:16 [Source: ICIS news]
WASHINGTON (ICIS news)--US market regulators said on Thursday that crude oil and gasoline futures markets are accurately reflecting underlying supply/demand fundamentals and there is no evidence of price manipulation by producers.
Walter Lukken, commissioner at the US Commodity Futures Trading Commission, told a House of Representatives committee that the commission “has been paying particularly close attention to futures trading in energy commodities because of the importance of energy prices and supplies to the ?xml:namespace>
“Based on our surveillance so far, we believe that crude oil and gasoline futures markets have been accurately reflecting the underlying fundamentals of these markets.”
He noted that since October last year his commission and the Federal Energy Regulatory Commission have been coordinating their monitoring and investigation efforts to enhance price integrity of the markets.
He said increases in prices for oil and gasoline reflect the very tight supply/demand balances in these markets.
“In economists’ jargon, both supply an demand for crude oil and unleaded gasoline are price inelastic in the short run. Therefore, changes in supply or demand can, in the short run, have disproportionately large effects on price.”
He cited increased growth in economies in
Noting that gasoline prices have risen more than prices for crude oil, Lukken said: “We infer … that the increase in unleaded gasoline prices has been driven not only by increases in the level of crude oil prices but also by complications associated with the transition of the futures contract from gasoline containing MTBE [methyl tertiary butyl ether] to so-called reformulated blendstock for oxygen blending to which ethanol will be added.”
Several members of Congress have blamed energy companies for rising costs, and some have called for a windfall profits tax on refiners.
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