Leaked Oil Trading Documents Underscore Role of Speculators in Oil Price Spikes; Identities of Traders Should Be Public
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FOR IMMEDIATE RELEASE |
CONTACT: Public Citizen
Phone: 202-588-1000
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Leaked Oil Trading Documents Underscore Role of Speculators in Oil Price Spikes; Identities of Traders Should Be Public
Statement of Tyson Slocum, Director, Public Citizen’s Energy Program
WASHINGTON - August 19 - Note: The Wall Street Journal this week ran a story about confidential documents from the Commodity Futures Trading Commission that named traders who held oil futures in 2008, when oil prices spiked to record highs.
The growing controversy over the leaking of trading documents naming 219 investors in oil futures positions during the 2008 oil price spike shows two things.
First, the data reveals that excessive speculation by banks and others is the driving force in oil markets, pushing prices beyond the supply-demand fundamentals. Who wins when prices rise? Wall Street traders that are engaged in speculating. Who loses? Every consumer who fills up at the pump.
Second, this data shows that we need this information to be made public on a regular basis. The companies named – including Goldman Sachs and Morgan Stanley – were significant players in the 2008 price run-up. The public should know who is responsible for high gas prices. It should get this information not just now, three years later, but on a regular basis, within two weeks.
Far from heeding the hysterical calls of corporations that are rushing to use the dissemination of three-year-old records as an excuse to crack down on the Commodity Futures Trading Commission, lawmakers should work with the agency to shine light on the sordid business of oil speculation. For too long, major corporations have reflexively deemed vast swaths of data “proprietary,” thereby removing critical information from the public domain. Company-specific energy trading information should be public to help ensure more transparent markets. Even in equities, the identities of large individual shareholders are publicly disclosed. The same should be the case in commodities.
Further, the information revealed this week provides even more reason for regulators to fully enforce provisions of the Dodd-Frank Wall Street reform law that are designed to curb excessive speculation.
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Sanders Demands Regulators Obey Law on Oil Speculation
FOR IMMEDIATE RELEASE
August 23, 2011
10:09 AM
CONTACT: Senator Bernie Sanders
Sanders Demands Regulators Obey Law on Oil Speculation
WASHINGTON - August 23 - Sen. Bernie Sanders (I-Vt.) today said federal regulators should stop thumbing their noses at a year-old law and enforce limits on excessive speculation in oil markets.
He cited secret data collected by the Commodity Futures Trading Commission which showed that Goldman Sachs, Morgan Stanley and other banks and hedge funds dominated oil markets in 2008 when prices rose sharply and topped $140 a barrel. The records – first made public by Sanders – shed light on the role of speculators at a time when oil prices soared and the pump price for gasoline spiked to around $4 a gallon.
In a letter to the commission chairman, Sanders urged Gary Gensler to convene an emergency meeting to crack down on speculators and provide needed relief for motorists and for people who live in cold-weather states, like Vermont, who face sharply higher prices this winter for oil to heat their homes.
“While making this confidential information public may have upset Wall Street oil speculators, the American people have a right to know exactly what caused gasoline prices to skyrocket to more than $4 a gallon back in the summer of 2008,” Sanders said. “Further, there is little doubt that the same speculators who caused gasoline and heating oil prices to unnecessarily spike in 2008 are playing the same games again in 2011. This is simply unacceptable and must not be allowed to continue.”
The average price for a gallon of gasoline is now $3.57, still 87-cents more than gas cost two years ago when oil supplies were lower and demand for gasoline was higher. Sanders also noted that the U.S. Energy Information Administration predicts that the price of heating oil in the northeast will be about 33 percent higher than last winter.
The Wall Street reform law enacted last year gave the CFTC until Jan. 17 to impose strict limits on the amount of oil that speculators could trade in the energy futures market. Seven months later, the commission is still breaking the law.
The commission says it lacks enough information, a claim Sanders called “laughable.” In the letter to Gensler, Sanders said the CFTC has been collecting this data for at least three years and called for an emergency meeting “to eliminate excessive oil speculation as soon as possible.”
United States Senator for Vermont
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