Obama calls for action against crude oil price manipulation

17 April 2012 19:01  [Source: ICIS news]

WASHINGTON (ICIS)--President Barack Obama on Tuesday called for increased federal monitoring and control of crude oil trading and pricing, saying that Middle East tensions and energy market speculators are responsible for continuing high US retail gasoline prices.

Obama said he would ask Congress for an additional $52m (€39.5m) to hire six times more surveillance and enforcement staff at the Commodity Futures Trading Commission (CFTC) and boost the commission’s computer technology to keep better track of energy futures trading.

He also called on Congress for a ten-fold increase in federal penalties for illegal manipulation of energy prices or markets.

Citing high US retail gasoline prices – which have been hovering around and above $4/gal in the last year – Obama said that because the US must rely on foreign nations for much of its oil supply, “we pay more at the pump every time there’s instability in the Middle East or growing demand in countries like China and India”.

“That’s what’s happening right now,” he said.  “It’s those global trends that are affecting gas prices.”

In addition, he said, the federal government should do all it 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”.

But Obama’s plan came under attack from Senate Republican Minority Leader Mitch McConnell (Kentucky), who charged that the president’s proposal was merely a recycled plan that the White House aired in April last year.

“The president’s goal here isn’t to do something about the problem,” McConnell said, “It’s to make people think he’s doing something about the problem.”

“They’ve got nothing new to offer,” McConnell said, referring to the White House. “Today’s announcement is all the proof you need of that.”

Congressman Doc Hastings (Republican-Washington), chairman of the House Natural Resources Committee, also blasted the Obama proposal.

“This tired campaign to blame speculators for rising gasoline prices has been used by the president year after year,” Hastings said.  “Yet the Obama administration has failed to address the real problem of rising gasoline prices: their stranglehold on America’s vast energy resources”.

Meanwhile, he added, “President Obama has placed billions of barrels of American oil off-limits for production, while federal oil and natural gas production declined last year under his watch”.

($1 = €0.76)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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