June 26, 2008

Senators, Representatives Call for an End to Oil/Gas Market Manipulation and Excessive Speculation

WASHINGTON, DC – On Thursday, U.S. Senators Maria Cantwell (D-WA), Sheldon Whitehouse (D-RI), Bernard Sanders (I-VT), and Bill Nelson (D-FL), were joined by Representatives Bart Stupak (D-MI-01) and Chris Van Hollen (D-MD-08) and representatives from the airline and farming industries, and labor urging swift Congressional action to close loopholes that may be responsible for market manipulation of the oil and gas markets and/or excessive speculation.

Earlier this week, Cantwell introduced the Prevent Unfair Manipulation of Prices Act of 2008 with Senators Whitehouse, Sanders, Nelson, and Wyden to close multiple loopholes that allow energy futures traders to evade federal oversight. Congressman Stupak introduced companion legislation in the House of Representatives last week. Representatives Van Hollen and DeLauro have introduced similar legislation, the Energy Markets Anti-Manipulation and Integrity Restoration Act of 2008 (H.R. 6341).

“With the Fourth of July rapidly approaching, working families and businesses are overwhelmed with punishing gas, diesel and home heating oil prices and are struggling to make ends meet,” said Cantwell. “Americans are desperate for Congress to work together to get to the bottom of these crippling oil prices that cannot be explained by supply and demand fundamentals. We urgently need to close the loopholes that may be allowing a few rogue traders to hijack the oil futures market and force Americans to pay nearly twice as much at the pump as they should. It needs to stop right now.”

“Rhode Islanders are facing the highest gas prices they’ve seen since the fuel crisis days of 1981 – prices that can no longer be explained by the simple economics of supply and demand. With the long summer months upon us, things could get much, much worse,” said Whitehouse, a member of the Senate Judiciary Committee and former Rhode Island U.S. Attorney and Attorney General. “Market speculators and energy traders have been skating around the law, playing games with energy markets and driving up prices. This bill will close loopholes, prevent excessive speculation, and help bring prices down.”

Sanders said, “Hedge funds and major Wall Street financial institutions are making tens of billions of dollars each and every year by speculating on oil futures, while working people are paying $4 for a gallon of gas and seniors wonder how they’ll heat their homes next winter. In my view, we need to deal aggressively with financial institutions and hedge funds that are speculating in oil futures and artificially driving up oil prices by as much as 50 percent.”

“Clearly, unregulated speculators have bid up oil prices to unbelievable and unacceptable highs,” Nelson said. “Congress needs to step in. We need to shine a light on all the participants and put an end to excessive speculation and any unlawful market manipulation.”

“Today, Americans are seeing the impacts of unregulated energy trading at their gas pumps – and it’s not a pretty sight,” said Senator Ron Wyden (D-OR), another co-sponsor of the PUMP Act. “Consumers shouldn’t be the victims of people who are gambling on energy markets just to make a fast buck.”

“All sectors of our economy have been hit hard by rising energy costs and those costs are passed along to American consumers in the form of higher prices for gasoline, food, transportation and manufactured goods,” said Congressman Stupak, chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations. “Addressing high energy costs is a critical issue that must be priority No. 1 for Congress. Experts testified before my subcommittee on Monday that oil prices could drop by as much as 50 percent within 30 days if the PUMP Act were enacted. Now is the time for Congress to take up this comprehensive legislation and close off the loopholes that are allowing speculators to manipulate the markets.”

“With high fuel prices squeezing our constituents and burdening our economy, we in Congress have a responsibility to act,” said Representative Van Hollen. “While Members of Congress may not agree on every aspect of our energy policy, there is one principle on which we should all be united: our energy markets should serve the legitimate needs of energy consumers and producers, not enrich a narrow group of ‘hot money’ speculators at the public’s expense.”

“Everyday at the gas pump Americans are paying the price for what may be the improper manipulation of today’s energy and agricultural futures markets. We can no longer allow unethical speculators free reign to play these games while our entire economy hangs in the balance. It is time to empower the CFTC to do its regulatory job,” said Congresswoman DeLauro, chairwoman of the Agriculture Appropriations Subcommittee, which will hold a CFTC oversight hearing following the 4th of July district work period.

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