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."