SIMMONS JOINS DELAURO, LARSON, SHAYS, OTHER MEMBERS OF CONGRESS IN URGING INVESTIGATION INTO THE PRICE OF OIL AND GAS
WASHINGTON, DC, Sep 16 - Rep. Rob Simmons, R-2nd District, today joined Connecticut Reps. Rosa DeLauro, John Larson and Christopher Shays and nine other members of Congress in sending a tri-partisan letter to leaders of the House Agriculture and Energy and Commerce Committees urging an investigation into the role commodities futures traders play in the escalating price of oil and gas.
"Consumers and independent petroleum dealers have hinted to me and other members of the Connecticut delegation that excessive speculation and greed of the commodities markets has led to the dramatic increases in the cost of oil and gasoline," Simmons said. "If this is true, it's the responsibility of Congress and its congressional committees of jurisdiction to investigate these claims and shed some light on the role of futures traders play in the rising costs of energy."
The following is the text of the letter:
September 16, 2005
Dear Chairmen Barton and Goodlatte and Ranking Members Dingell and Peterson:
As leaders of committees with an interest in the exchange of energy commodities, we write to you to urge the immediate opening of an investigation into whether recent dramatic spikes in the price of oil and gasoline are a result of excessive speculation or possible manipulation by energy commodities futures traders on the New York Mercantile Exchange.
The past twelve months have seen dramatic increases in energy costs, with the price of a barrel of oil increasing almost 50 percent, from $44.06 a barrel to $65.96, and the wholesale price per gallon of gasoline rising almost 72 percent, from $1.19 to $2.05. While there are a number of contributing factors in these price shifts, there is a growing concern that increased - and possibly excessive - speculation in energy futures may be pushing the costs of oil and gasoline beyond supply and demand. Wholesale prices for energy in the United States are driven in large part by daily trading on energy futures contracts, and as the largest energy commodities trading center in the world, futures traders on the NYMEX play an enormous role in setting the prices that are ultimately passed on to the consumer.
It is no secret that commodities traders have been making record profits as a result of the recent increases in energy prices. According to a manager of exchange-traded markets for a brokerage in Stamford, Connecticut quoted last week on the Dow Jones Newswire, "there are (commodities) traders who made so much money this week they won't have to punch another ticket for the rest of the year." Although a March 2005 report by NYMEX which found no correlation between futures trading practices and the increased volatility of the markets, we feel that the American people deserve more than an internal industry study on this issue.
While the GAO has already initiated a review of the Commodities Futures Trading Commission and their role in overseeing the futures markets, we believe it is critical that Congress shine the brightest possible light on the role commodities traders are playing in increasing energy prices. As the American people face record costs to fill their cars and heat their homes, Congress must step up and ensure that traders are not engaging in excess or manipulative speculation at the expense of consumers. Given the energy crisis many Americans are now facing, we trust that your committees will give this matter their full and urgent attention.
Signing the letter with Rep. Simmons: Reps. John Larson (D-CT), Rosa DeLauro (D-CT), Christopher Shays (R-CT), Dennis Kucinich (D-OH), Bernie Sanders (I-VT), Jim McDermott (D-WA), Raul Grijalva (D-TX), Louise Slaughter (D-NY), Maurice Hinchey (D-NY), Peter DeFazio (D-OR), Marcy Kaptur (D-OH) and Pete Stark (D-CA).