Feds Probe Possible Oil Price Manipulation

Gov't Reveals Wide-Ranging Investigation Of U.S. Oil Markets Began 6 Months Ago

(AP)  Federal regulators are six months into a wide-ranging investigation of U.S. oil markets, with a focus on possible price manipulation.

The Commodity Futures Trading Commission on Thursday said it started the probe in December and took the unusual step of publicizing it "because of today's unprecedented market conditions."

Crude prices, which on Thursday hovered around $127 a barrel, have risen more than 42 percent since early December. Gasoline prices are nearing a national average of $4 a gallon, up from about $3.20 a year ago.

The commission said details of the investigation remain confidential, but announced a handful of other initiatives designed to increase transparency of U.S. and international energy futures markets.

For example, the CFTC said it will immediately require monthly reports from institutional investors who manage funds designed to mimic the price of crude oil and other energy futures. The goal, the agency said, is to identify the amount of such index trading and to "ensure that this type of trading activity is not adversely impacting the price discovery process."

The CFTC also said it has reached an agreement with its British counterpart and InterContinental Exchange Inc.'s Futures Europe to expand surveillance of energy futures contracts with U.S. delivery points, including the benchmark West Texas Intermediate crude, which trades on the New York Mercantile Exchange.

"The implementation of today's measures will improve oversight of the energy futures markets to ensure they reflect fundamental economic forces of supply and demand, free of manipulation and fraud," the CFTC said in a statement.

U.S. Sen. Jeff Bingaman, chairman of Senate Energy and Natural Resources Committee, earlier this week asked the CFTC to provide the committee with more information about its oversight of energy commodity markets.

The New Mexico Democrat said he was concerned about increasing trading activity in U.S. crude oil taking place overseas and in over-the-counter markets. He also questioned the CFTC practice of classifying so-called "swap dealers," including large investment banks, as "commercial" market participants alongside traditional buyers and sellers, such as oil companies and airlines.

"The practice of including investment banks in the commercial participant category calls into question the CFTC's continued assertion that noncommercial participants, or speculators, follow rather than lead oil price movements," Bingaman wrote in a letter Tuesday.

Congress earlier this month voted to give the CFTC greater oversight of unregulated electronic exchanges, such as ICE, as a way to protect consumers and deter price distortion and manipulation.

A Senate subcommittee investigation last year found that hedge fund Amaranth Advisors LLC, which collapsed in 2006 after losing more than $6 billion in natural-gas trades, had shifted its activities to ICE from the regulated Nymex to avoid trading limits, and that the "excessive speculation" raised homeowners' heating bills.

Speculation has been cited as one on many factors contributing to surging petroleum prices, along with assumptions about new supplies, limited demand growth, possible supply disruptions overseas and the dollar's depressed value against other currencies.

[noloyalisti]

Isn''t this like the coyote guarding the chicken coop? We have the oil company run American government investigating themselves.

This is almost as ludicrous as the twisted conservative idea letting industry like the gun and tobacco and war profiteering corporations of America policing themselves. How ridiculous these fascists!!

[acolton1]

Oil Price Manipulation

Ya think. No not in America or on the Stock Exchange.

[aeasus]

shouldn''t this have been done over 5 years ago?

I guss late is better then never. Still...doesn''t mean they will get any good results.

[harrydoghiny]

Yeah, right. Let''s all take a deep breath and hold it...

[culturechang]

I wonder what the pre-concieved conclusion was pre-determined to be.

A few years ago, Bush did an "investigation" on oil price fixing. In one week, they said "No price fixing was found" What investigatin is started and completed in one week? That was no investigation. That was a token.

We already know that OPEC is fixing the price. It is an illegal organization who''s sole purpose is price control. Why aren''t we dealing with that in International Law? If there is no law, then make one. The President should lead this for the world''s sake. That is what Reagan would have done.

[culturechang]

They just got around to this because federal authorities were busy wire tapping escort services and massager parlors and driving madams to suicide with 50 year prison sentences for consenual adult prostitution.

[sistatee-2009]

Price fixing for higher profits? Man, I just can''t believe the oil companies would do THAT!

[shanev137]

Isn''t this like the coyote guarding the chicken coop? We have the oil company run American government investigating themselves.

-------


This dog and pony show is just that...a show to make people feel better about paying $4 for a gallon of gas. Of course collusion and manipulation are happening. If it wasn''t, oil companies wouldn''t be making hundreds of billions in net profit. It''s nice to fantasize about a moral government stepping in to make sure oil and gas are on the up and up, but I wouldn''t hold my breath even if Obama gets elected. You should still plan on paying $5 to $6 a gallon in the next few years.

[haoli25]

Is this from the Dept. of No Sh*t Sherlock?

[boyntonbe]

This isn''t news. How dare ANY news organization treat this like a "news" story.

The greed (mortgages, oil, food, etc) in this country has gone completely haywire.

It is greed. Greed, greed, greed...AND...they can get away with it.

If the oil companies say they HAVE to raise the price because of demand, then, fine, raise the price to whatever you want...only that portion being raised goes in the US Treasury...and not oil company profits.

Oil is a natural resource....we, the people of the world own any and ALL natural resources. It is time the people take them back.

[generey]

Is this from the Dept. of No Sh*t Sherlock?


--------------------------------------------------------------------------------

Posted by haoli25 at 05:54 PM : May 29, 2008


ROFLMAO!!! TOOOOOO FUNNY.

[wayfedup]

HalliburtonCheneyKBRCheneyBushCheneyGHWBCheney.... Anyone notice a TREND here?

[rf35]

What I want to know is WHEN they find price manipulation, what are they going to do about it?

NO! Bad investor!

[Keypinitreel1]

oil price manipulation?! wow....whooda thunk it...

[piercetheval]

...Isn''t this sort of like putting Gerald Ford [That bright bulb of intelllectual insight] in charge of the Warren Comission?

[denn034]

I''ve decided that there is profiteering and that oil company execs need to be prosecuted. Congress also needs to force those companies to lower their profit margins and thereby the price of gas as well.

[piercetheval]

Oil was around $10.00 a barrel in 1990...wathafukizgoingahhwwnn?

[piercetheval]

Why don''t we just Nationalize the oil companies, seize all foreign investments...especially foreign land ownership.
It doesn''t make sense that you can''t be a citizen of most countries, much less own anything within that country unless you were born there...yet last years adversary can legally own half the property in this country if you have enough $$$$s''

[ender18-2009]

Just like Enron.

[piercetheval]

....[cont.]...besides, oil is a national reserve and shouldn''t belong to anyone or any corporation specifically...it doesn''t matter that they put up the wherewithall fo0r exploration and development...We the citizens of this country would have acheived it anyways given the time for political process...and there''s the rub!...and P.S No I''m not a Bolshevik or an Anarchist, I am a Libertarian [as close as any one can label] and a Humanist!

[greeneyes222]

Why am I not surprised to learn the banks are involved in this?

[pucker7]

It is time to do what Chaves did in his country ...throw the oil execs. out! take over their oil and give it to the people...sell it cheap like Mexico!

[bgwinnett]

Feds Probe Possible Oil Price Manipulation

________________________________________


Yeah, a manipulation of the Dollar, how about; lets stop printing!

[tx2democrats]

its time we (the american people) take-back, steal, rob, all American Oil for our own use and remove from power - ALL OIL COMPANIES exec''s.

We must stop all foreign investments and take back
our land.

[randynason]

Consumers are being gouged? Oh, no... say it ain''t so!
I think we should make paying windfall profit/war profiteering tax retroactive and require the oil companies pay their due, as they should have been doing for this past five years.

[piercetheval]

TAKE BACK YOUR COUNTRY...B4 IT''S TOO LATE!!!!!!!!!!!!

[cyberus-2009]

Probe into oil price manipulation?

Now theres a probe that will lead to nowhere once the shredders get finished in Cheneys office

[ray999999]

if it weren''t for all the tree huggers we would have plenty of oil right here,maybe the tree huggers should be paying $10 dollars a gal.

[canyoutellme-2009]

hhaHAHaHHAAHAH Vindication!! i''ve been saying for MONTHS that the only way to stop this rise in oil prices is to have transparency to who is actually trading the oil futures and then finding out who those people work for. Lo and behold, we get an announcement that they''re doing exactly this very thing... investigating WHO is doing the trading.

Think about it... there are *NO* OIL shortages... zero. When was the last time in the last 2 decades you went to a gas pump and there was a shortage? NEVER.. that''s right. In addition, OPEC flat out said there''s no shortage and they''re meeting demand just fine.

Then comes the report about the lower oil reserves and then analyst after analyst came out calling for doom and gloom and how we''re going to 200/barrel and even higher and there''s an oil shortage... then WHOOPSIE, today they say the lower oil reserves was due to a temporary glitch because there was a delay at the unloading docks but that has since corrected itself. So, what about all those doom and gloom guys? AMAZING.

So, turns out, i was right YET AGAIN.

OIL is coming down now... watch... this investigation is putting light into a place of darkness known as the OIL RIGGING business (oil rigging having multiple meanings)

[ray999999]

as for the feds investigation more wasted money they will not do a thing, what a joke

[seafang]

Well I know where they should look for the single biggest artificial price fixing; and that is at the federal government; who by the way do absolutely nothing towards finding, rcovering, refining, and distributing oil products; yet somehow they make three times what the oil companies who do do all of those things, make on their investments. Well of course, that is before the feds then tax what profits the oil companies do make to get even more of the oil revenues for nothing.

And if you want to see profiteering, you should see the profit margins in some other industries; they make the oil companies look like amateurs.

Yes go a head and investigate, and start at the top with the federal and thent he state governments.

[toolmangler-2009]

Oil was around $10.00 a barrel in 1990..
Posted by piercetheval at 06:30 PM : May 29, 2008



12 years of Shrubs as president, 18 years of Repug controlled Congress, 12 years of war in the M.E. and a country that is scared of upsetting anybodys feelings. everything is P.C. now and the ACLU and others make sure it stays that way.

[ramos937]

For years, I worked as an oil & gas accountant in Houston. After that I audited oil firms for DOE. Plus, I did a stint working for a refinery as an accountant. My comments are based on this background.

The five "sisters", the large oil firms, own a variety of firms that trade in the oil commodities markets. One trader may sell a bbl for $50 and that trader will then sell the same bbl for $60 and so on until the refinery needs it. The refinery pays the full cost of the bbl at the time it purcahses it. The raises in price as all artificial and adds no value to the product.

To me, this is the major cause of the price increases we have seen in the last few months.

[ced749]

I am in awe at how this country is letting our resources be dictated by Oil Companies and The President has no intentions of doing anything about it and why should he as he is getting richer off the oil as well. What happened to the good ole America that did not allow foreigners to come in and use our money for their businesses and why doesn''t the Government Pay Social Security like the rest of the American people? I am disgusted with all of the oil prices going up and the profits are too for the oil companies. There is something wrong with this picture. Free trade has gone to the extremes. when you call a company that is large you end up talking to someone in another country for customer service, why are we putting the true Americans that have fought and paid taxes all of our lives behind the foreign intruders, the oil companies and why are we paying social security taxes and the government doesn''t. I don''t think it is fair that we pay in and it gets used up and we retire poor and the Government retires rich and well taken care of by our tax dollars. What is good for us should be good for all. I am an angry American that has been watching our country go out of control since Busch has been in office. I think there is a lot of illegal things going on we are not told about. I hope that someone will come to their senses and turn things around. Stop letting our soldiers die in vain while we take care of the countries that are killing them.

[jn122736]

if it weren''''t for all the tree huggers we would have plenty of oil right here,maybe the tree huggers should be paying $10 dollars a gal.
Posted by ray999999 at 07:12 PM : May 29, 2008
~~~~~~~~~~~~~~~~~~~~~~~~~~

Actually, ray999999, if it weren%u2019t for your, so-called, tree-huggers, all the oil in Alaska, and other reserves, would have been used up years ago, just like the rest of the united states oil resources, and for less than $10 per barrel instead of the $130-plus per barrel that it is worth today.

[veteran72]

The Little Idiot Son invaded Iraq, which posed NO danger to us, and spent $Trillions$, while Oil Prices, which are more connected to our Nations Survival and Security than ANYTHING, are ignored....
Further proof, (as if any more is needed), that the Bush/Cheney Crime Cartel MUST be Arrested and held for Willful and Planned Treason against the United States and its Citizenry.
Hang ''em High, Hang ''em Soon.....

[ramos937]

To me there are some short term "cures". First, impose some kind of punitive tax on artificial price increases. Second, impose some tax increases on oil royalty owners. These guys have been making out like bandits. Three, start talking to Veneuzala(?), Cuba and Mexico. In Cuba''s case, China is helping Cuba develop huge newly discovered oil and gas fields. We cannot because of the embargo and administration restrictions.

[atlanta30326]

Can you imagine what the cost of a Quarter Pounder would be if Bush & Cheney had been cattle farmers rather than oilmen?

[p51driver]

This tells it all! Wake up America!

God gave this country all the resources we need and we would be fine, if we weren''t too stupid to harvest them.

The OPEC minister will look you in the eyes and say the following: "We are at war with you infidels. Have been since the embargo in the 1970s. You are so arrogant you haven''t even recognized it. You have more missiles, bombs, and technology, so we are fighting with the best weapon we have and extracting on a net basis about $700 billion/year out of your economy. We will destroy you! Death to the infidels!

While I am here I would like to thank you for the following: Not developing your 250-300 year supply of oil shale and tarsands. We know if you did this, it would create millions of jobs for US citizens, expand your engineering abilities, and keep the wealth in the US instead of sending it to us to finance our war against you ***.

Thanks for limiting defense department purchases of oilsands from your neighbors to the north. We love it when you confuse your allies.

Thanks for limiting drilling off your coasts, in Alaska, and anywhere there is a bug, bird, fish, or plant that might be inconvenienced. Better that your people suffer! Glad to see our lobbying efforts have been so effective.

Thank you, US Congress!!!!

And finally, we appreciate you letting us fleece you without end. You will be glad to know we have been accumulating shares in your banks, real estate, and publicly held companies. THANK YOU, AMERICA!"

[neobrian-2009]

KNEW All Along
I`ve said for years,..BUSHCO would EXTRACT Every Single Penny they could as their " White House Occupation " came near a close,...
We`ve been SOLD OUT to Corporate Greed,..The Banner of the RepubliCon Sect !
Shrub should be held in chains until his day in International Court,..''Crimes against Humanity '',.
Every sane person who is Not in Cahoots with These Criminals should be So Angry as to NEVER,EVER vote for a member of This Criminal Organization,.." The RepubliCon Sect",..
Ray999999 and all of his ZERO inmate pals should pay $500 every time they walk out their door,..this money would be distributed to fund Energy Efficiency.

BAN Re-CONS ! This Sect Has DESTROYED Our Nation !

[neobrian-2009]

WELL SAID Compadre!
Can you imagine what the cost of a Quarter Pounder would be if Bush & Cheney had been cattle farmers rather than oilmen?

Posted by atlanta30326 at 07:32 PM : May 29, 2008

[ced749]

It seems like the oil crisis has gone out of control these last four years of Bush''s term. I think he wants to go out with a big rich bang, and to hell with the rest of the Americans.

[wardoglrs]

Feds Probe Possible Oil Price Manipulation....
How can a robber investigate a robber?

[cbsblogger]

This makes me laugh (or cry). Our government has aided and abetted the oil industry and the traders in energy since Bush/Cheney was elected, and now they claim shenanigans may be going on?...LOL

California almost went bankrupt due to Enron trading illegalities so that the GOP could oust the Dem governor Davis for Arnold Swartzenegger.

The system is corrupt and the GOP club is getting richer, and until we recognize and prosecute them (or behead them as the French did) and the *** that are behind it, nothing will change.

The GOP has changed from a party that promoted conservative fiscal policy that benefitted all, to a party of greedy corporatists that are willing to steal our country blind so that CEOs and others can make 9 digit retirements like Lee Raymond of Exxon. I''ll never ever vote GOP again.

http://abcnews.go.com/GMA/story?id=1841989

[toolmangler-2009]

The five "sisters", the large oil firms, own a variety of firms that trade in the oil commodities markets. One trader may sell a bbl for $50 and that trader will then sell the same bbl for $60 and so on until the refinery needs it. The refinery pays the full cost of the bbl at the time it purcahses it. The raises in price as all artificial and adds no value to the product.
To me, this is the major cause of the price increases we have seen in the last few months.

Posted by ramos937 at 07:24 PM : May 29, 2008




This is the best explanation I have read in a long while. Price fixing is the name of the game. They can raise or lower the price per Barrel anyway they want and we suffer for their greed.

[rennerdale1]

It doesn''t make anydifference how much they investigate, it won''t help. all the talk of the price per gallon of gas every where else, well we are not everywhere else, we are the USA, don''t forget that, why should we follow overseas pricing?

[fishinfool43]

Posted by ramos937 at 07:24 PM : May 29, 2008




This is the best explanation I have read in a long while. Price fixing is the name of the game. They can raise or lower the price per Barrel anyway they want and we suffer for their greed.



--------------------------------------------------------------------------------

Posted by ToolMangler at 08:15 PM : May 29, 2008

I agree, but I also bet they wont even get a slap on the wrist before someone greases their palms to get it swept under the carpet

[toolmangler-2009]

The CEO of Exxon Mobile was on the Today show a few weeks ago, and said it is reasonable to make 10% profits on his product.
Posted by bullyforhim at 08:00 PM : May 29, 2008


I would agree to a 10% profit on occasion. but the over 100% profit we have witnessed in the past year is criminal and should be treated as such.

[fishinfool43]

Amen Mangler!!!,
IF they are found guilty, does that mean we get a refund? ROFL

[toolmangler-2009]

Posted by fishinfool43 at 08:25 PM : May 29, 2008



That would be ''par for the course''