McCaskill: Regulations Needed to Protect Consumers from Crude Oil Speculation
As gas prices remain high during the holiday travel season, U.S. Senator Claire McCaskill spoke today about rising gas prices at a subcommittee hearing examining the impact of speculation in the crude oil market. Speculators, who have a stake in the industry, make predictions about oil prices and are often blamed for causing oil price increases. Members of two Senate subcommittees came together for a joint hearing Tuesday to learn more about how crude oil trading is influencing gas prices in America, how the crude oil market currently operates and who benefits from it. McCaskill charged that although speculators and oil companies profit greatly from the unregulated trade of crude oil, average Missourians are not reaping the benefits.
"Something has changed that is causing a massive amount of speculation that we have not seen before," McCaskill said at the hearing. "It is hard for me to imagine that it is not connected to the massive increase that we've seen in gasoline prices for the people I represent in Missouri."
Average daily trade of crude oil has risen sharply in recent years. Crude oil trading on the New York Mercantile Exchange alone increased by 90 percent between 2001 and 2006. Meanwhile, gas prices have doubled across the country.
In her statements, McCaskill pointed to the current lack of regulations and oversight as a large part of the problem. Crude oil is the most actively traded commodity, yet the trade of energy commodities, such as crude oil, has little oversight and accountability. McCaskill suggested in her comments that trading of energy commodities should be treated similarly to other commodities, and until such regulatory and oversight measures are in place, the market will remain vulnerable to speculation, which could continue to hurt consumers in Missouri at the gas pump.
"Until we treat it the same as other commodities, the American public is always going to assume that they are getting the short end, as opposed to those who are sitting at the trading table making money hand over fist," McCaskill said.