Skip to content

President Calls for Measures to Address Oil Speculation

High fuel prices prompted President Obama to call for measures to limit oil market manipulation.

President Barack Obama proposed new measures Tuesday to address oil market manipulation, calling on lawmakers to increase penalties on those involved in manipulative practices and for increased funding for the agency that’s supposed to police the markets.

“We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher, only to flip the oil for a quick profit,” Obama said in the White House Rose Garden.

Republicans, however, called the move a gimmick, saying the real solution is allow more oil drilling, while Democrats said it wasn’t enough.

The five-part plan includes:

1. Requesting Immediate Funding to Put More “Cops on the Beat” Overseeing Oil Markets: The President is calling on Congress to pass an immediate increase in funding to support at least a six-fold increase in the surveillance and enforcement staff for oil futures market trading at the Commodity Futures Trading Commission.

2. Funding Critical Technology Upgrades in the Oversight and Surveillance of Energy Market Activity: The President is also requesting that Congress provide the CFTC funding for critical IT upgrades to strengthen monitoring of energy market activity.

3. Substantially Increasing Civil and Criminal Penalties for Manipulation in Key Energy Markets: The proposal includes a 10-fold increase in maximum civil and criminal penalties for manipulative activity in oil futures markets. These heightened penalties will make sure that penalties reflect the seriousness of misconduct.

4. Empowering the CFTC to Raise Margin Requirements in Oil Futures Markets: The president is also calling on Congress to act immediately to give the CFTC authority to direct exchanges to raise margin requirements to address increased price volatility or prevent excessive speculation or manipulation. This authority will help limit disruptions and reduce volatility in oil markets.

5. Taking Immediate Steps to Expand Access to CFTC Data to Better Understand Trading Trends in Oil Markets: These executive actions will allow additional analysis of CFTC’s data to look for patterns and better understand trading activity in energy markets, according to the White House.

The CME Group, the world’s largest operator of futures exchanges, said the actions could actually backfire. “Taking away from exchanges the ability to manage margins would make the markets less efficient, less tied to fundamentals and would create the potential to push the hedgers out of the market, which would make oil more expensive for all consumers,” the company said in a statement.

Speculation is not the problem, said American Fuel Petrochemical Manufacturers President Charles T. Drevna in a statement.

“To the extent that there is any manipulation in the marketplace, the government should investigate and take corrective actions,” Drevna said. “Historical data shows speculators are not the primary force impacting prices at the pump. In fact, U.S. refiners count on financial markets to hedge against potentially higher crude oil costs, which work to prevent consumer costs from increasing further.”

Drevna also called for increasing North American oil and natural gas production.

For more information:

White House Fact Sheet

Obama Introduces Oil Speculation Task Force, 4/26/2011

ATA Among Those Calling for Reform of Commodities Markets
, 2/4/2010

Regulators Probing Oil Futures Trading, 5/30/2008

U.S. Commodity Futures Trading Commission website

Printer Friendly Version
Email This Story

Fuel and Oil: Related News

4/18/2012 – President Calls for Measures to Address Oil Speculation

President Barack Obama proposed new measures Tuesday to address oil market manipulation, calling on lawmakers to increase penalties on those involved in manipulative practices and for increased funding for the agency that’s supposed to police the markets….

4/17/2012 – Diesel Drops the Most Since 2011, Oil Prices Fall After Iran Meeting

This week, fleet operators will get some relief as diesel and gas prices drop. Oil prices also fell this week due to easing tensions over Iran….

4/16/2012 – Industry Stays Focused on Efficiency as Fuel Costs Rise

With fuel costs rising and a driver shortage creeping up, fleets are still doing all they can to get the most miles out of their trucks, say truckstop executives….

4/11/2012 – Diesel to Average $4.21 This Summer; Crude to Average $112

Diesel fuel prices, which averaged $3.94 per gallon last summer, are projected to average $4.21 per gallon this summer, according to the Energy Information Administration’s Short-Term Outlook….

4/10/2012 – Diesel Back on the Rise, Oil at Seven-week Low

Last week’s diesel price decrease was short-lived as the average price rose by 0.6 cents per gallon this week to $4.148 per gallon, while the price of gasoline stayed nearly the same. However, crude-oil futures ended at a seven-week low Monday….

4/10/2012 – Love’s Says Bulk DEF Rollout Hits Halfway Point

Love’s Travel Stops is now offering bulk DEF at more than half of its travel stop locations across the country and says it’s on track to have bulk DEF available at all travel stops by the end of the year….

4/9/2012 – Three Major Oil Companies Settle in “Hot Fuel” Lawsuit

BP Products North America Inc., ConocoPhillips Co. and Shell Oil Products US have agreed to settle lawsuits accusing the oil companies of profiting from “hot fuel,” gasoline or diesel fuel for which price has not been adjusted for temperature….

4/4/2012 – DEF Pump Price Continues Downward Trend

The average U.S. diesel exhaust fluid pump price fell by 1 cent to $2.74 per gallon between February and March 2012. This continued a marginal downward trend, which has seen the price drop 2 cents since December 2011….

4/3/2012 – EPA to Allow 15% Ethanol Fuel in Gasoline

The U.S. Environmental Protection Agency approved the first applications for registration of ethanol for use in making gasoline that contains up to 15% ethanol – known as E15….

4/3/2012 – Diesel Prices Fall, Rising Oil Prices Spark Talk of Opening SPR

The average price of diesel dropped by half a cent this week to $4.142 per gallon, ending a nine-week trend of price increases. Despite the decline, the price of diesel is still an average of 16.6 cents higher than this time last year, according to the Energy Information Administration’s weekly fuel update….

4/3/2012 – Illinois Plans Nation’s Largest Electric Vehicle Fast-Charging Network

Illinois Governor Pat Quinn and representatives from the Illinois Tollway, 350Green LLC and 7-Eleven Inc. announced plans to create the nation’s largest network of fast-charging electric vehicle stations….

4/2/2012 – Alaska, Producers Reach Agreement on Point Thomson Natural Gas

Alaska Gov. Sean Parnell and a group of gas producers have reached an agreement to begin commercializing North Slope natural gas resources within the Alaska Gasline Inducement Act. …

3/29/2012 – Irving Oil Offers First DEF Pump in Northern New England

Irving Oil‘s travel plaza in Kittery, Maine is now equipped with a diesel exhaust fluid pump, making it the most northern DEF pump dispenser in New England….

3/28/2012 – Diesel Sees Slight Increase, Oil Ends Modestly Higher

Average diesel prices went up just a hair this week, according to the Energy Information Administration’s weekly fuel update. The half-cent increase took the average price to $4.147 per gallon….

3/22/2012 – January-February Biodiesel Volume Slips from Late 2011 Growth

The U.S. biodiesel industry produced 135 million gallons of fuel in the first two months of 2012, according to new numbers released by the EPA Wednesday….

3/20/2012 – Diesel Reaches Highest Price Since Summer 2008

The average diesel price spiked 1.9 cents this week to $4.142 a gallon, its highest price since the summer of 2008, according to the Energy Information Administration’s weekly fuel update….

3/16/2012 – U.S. Fuel Exports to Double by 2015

U.S. exports of gasoline, diesel and other fuels will more than double in the next three years as refiners take advantage of a growing supply of domestic crudes and ship more fuel to emerging markets, according to UK research firm Wood Mackenzie….

3/14/2012 – Louisiana Plant Turns Animal Fat Into Fuel

A high-fat diet might not be good for humans, but it could be great for trucks, trains, planes and cars. …

3/13/2012 – Fuel Prices Rise Yet Again, Oil Prices Fall

The national average price for diesel is up yet again this week by almost 3 cents, from $4.094 to $4.123 per gallon, according to the Energy Information Administration’s weekly fuel update. This is the seventh week in a row that prices have risen. …

3/13/2012 – White House Report Shows Drop in Oil Imports

The White House released a one-year American energy progress report showing that the U.S. has reduced dependence on foreign oil by more than 2 million barrels per day. …

3/13/2012 – Dart Launches CNG Dedicated Service

Dart Transit launched a small fleet of CNG-powered tractors dedicated to Andersen Window Corp.

3/12/2012 – Diesel Exhaust Found to be ‘Negligible’ Contributor to One Type of Pollution

Contrary to what the scientific community expected, the exhaust fumes from gasoline vehicles are a bigger polluter than diesel exhaust when it comes to a specific type of pollution, according to a new study….

3/8/2012 – PeopleNet, Vusion Offer Fuel Theft Detection

PeopleNet is getting ready to offer a fuel-theft detection solution with the help of sister company, data analytics provider Vusion….

3/8/2012 – GE, Chesapeake to Collaborate to Speed Adoption of Natural Gas

GE and Chesapeake Energy Corp. announced they will collaborate to accelerate the adoption of natural gas as a transportation fuel….

3/7/2012 – DEF Prices Increase for Bulk Deliveries

Diesel exhaust fluid prices for tote refills and other bulk deliveries increased between January and February 2011, as suppliers reacted to increasing raw material costs, reports DEF Tracker….

3/7/2012 – EIA: Crude Price to Average $11 Higher Than Last Year

In its Short-Term Energy Outlook, the U.S. Energy Information Administration says it expects the price of West Texas Intermediate crude oil to average about $106 per barrel in 2012, $5 per barrel higher than in its previous outlook and $11 per barrel higher than the average price last year….

3/6/2012 – U.S. Diesel at Highest Price in More Than a Year

Diesel is up again this week with a 4-cent increase to $4.094 per gallon from $4.051 per gallon, according to the Energy Information Administration’s gas and diesel fuel update….

We'll deliver tax strategies to your inbox from our CPA firm.
We hate spam. Your email address will not be sold or shared with anyone else.