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.

[spadeisspade]

Prometheus was chained to a rock to have his liver eaten by birds for all of eternity; he was also the cause of Zeus sending Pandora to his brother. Sisyphus was the rock pusher.

[Marie Zarankevich]

Yeah, cool. -- But anything they uncover will be WAY too late to help the single parents being pushed out of the survival market by all this fun and games. -- How many people have lost their marginal jobs because they can no longer get to them?? -- How many kids will lose parents to hopelessness and despair? -- Do things locally, people, and try to become more self-reliant. -- All this ''Big Brother'' junk just HAS to go!

[prairiefox1]

I WILL BET THAT THEY WONT FIND ANYTHING WRONG!
THIS IS ONLY A SHOW TO KEEP THE MASSES THINKING WASHINGTON IS DOING SOMETHING ABOUT IT BUT IT IS ONLY FOR SHOW!

[dredre2k]

"This is a waste fo time. They should investigate Hollywood leftist elists and using foul language in movies."

I think I love you GOPSoccerMom. Welcome back!
You have a sick sick sense of humor... i like it!

[mswolfestock]

"Possible" price manipulation?????????

Oh, please!! My aching "head!!!"

[mcv57]

Sometimes really think CBS is LAME IN THE BRAIN, "Oil Price Manipulation." DAHHHHHHHHHHHHHHHHHHHHHHHHHH!

[ov442]

patriot12436 at 10:04 AM --- That was a mighty fine fair statement you made and i agree with you.

Thank God for men like him serving our country.
He has fought for our rights to have our own opinions and he deserves to have his as well.

Most of those that criticize him have never served anyone but themselves.

[arlt1627]

Why do you give Bush so much power in your life? You are responsible for your life, not Bush!! What problems has he personally caused you? I want real answers not your usual ptsd driven immature rants.

Posted by jamesm12341

James is drinking the Kool-Aid again and is so focused on McVet that he actually has no true thoughts! He just rewrites the same things over and over again!

[patriot12436]

shanev137
Also gas is 12 cents a gallon in Suadia Arabia, and 40cents a gallon in Kuwait. Why aren''t wee collecting from Kuwait we saved their *****. They owe us everything, if not for us they wouldn''t have their country today.

[patriot12436]

jamesm12341
You want facts. Bush started this illegal war for personal reasons, revenge against Sadaam, then found out he could get rich off of it. He is supposed to lead this country the way the American people voted him into office to do. He has done nothing to help America in 8 years. He will leave office with the honor of being the most hated president in the history of this country. I hope we get to try him for war crimes, if not i hope another country gets a shot at him.

[patriot12436]

jamesm12341
Who are you to call McVet a loser. This man served his country honorably and with the state of economy today we should all be pissed. I do not support his choice of candidate, but i support his right of choice. He paid his dues and earned this right.

[au_fait]

alphaa10, for your comment you show your lack of understanding a free market and a world market. The world is quickly develeoping and this taxes our natural resources. Yes in 2001 things were cheaper, most building materials, oil, food, ect... As we can only produce so much and OPEC is only willing to release so much if there is a demand for these items they can charge. Also with yearly inflation as well as devaluation of our currency, all goods will get more expensive. Even when they are cheaper to produce!

Also about setting a fixed price oil, if I owned an item and I had a buyer who said i will only pay this much for it. If I have another buyer who wants to pay more for, screw the first buyer. Loosely, that is how a free market system works.

[walt1944-2009]

It has been learned that the CFTC has been investigating price manipulation (gouging) on oil futures for the past 6 months. Naturally, the commission will not reveal what it has learned, but it is known that the value of oil futures has jumped in the past 6 months and it isn''t due to the Arabs!

The bottom line to all this is that someone is making a lot of money here and its not the average citizen. Of course, the Great Emperor Bush II doesn''t mind as the value of his oil futures portfolio has increased dramatically and, after all, isn''t it the goal of the Great Emperor'' reign (aside from world dominiation), to make the "wealthy, elite, and Corporate Big Oil, as much money as possible, no matter who gets hurt???

As Micheal Douglas said in the movie "Wall Street", "GREED IS...GOOD!"!

SIG HEIL, BUSH!!!!
sig heil, DEFINITELY MORE OF THE SAME, McCain!!!!

[trillion1]

Just another dog and pony show for the voters.

[gopsoccermom]

This is a waste fo time. They should investigate Hollywood leftist elists and using foul language in movies.

[bluestardad]

ARE THESE THE SAME FEDS THAT HAVE BEEN INVESTIGATING THE OIL INDUSTRY SINCE 1976?

GREAT!

BEND OVER AMERICA!

[oleander8]

To: shanev137

I won''t copy your rant because it just gives it more play - but why are you insulting the general public over high oil prices?

[samrensho]

Investigation??? While getting their pockets filled with money from oil companies. They''ve got the supreme court stacked so no one will ever find out how Cheney shafted America.

[sleepyric]

ha...great minds think alike!

[hsbarney]

No one ever mentions the infamous Cheney/Energy meeting.

The participants are TOP SECRET.

The topic was most likely how to screw the USA .

Impeach Bush and Cheney.