Congressman Donnelly Praises Federal Investigation of Oil Speculation
Today, Congressman Joe Donnelly praised the Commodity Futures Trading Commission (CFTC) for their investigation into the possible market manipulation of crude oil, which may be contributing to record-high prices of oil and gasoline.
"I applaud the Commodity Futures Trading Commission for taking a hard look at market practices that may be artificially raising the price of a gallon of gasoline," Donnelly said. "As oil prices continue to soar and American consumers continue to suffer, it is important that we take action to prevent speculation. "
Speculators, by definition, do not produce or use a commodity, but risk their own capital trading futures in that commodity in hopes of making a profit on price changes. Donnelly s first effort on this front was to co-sponsor H.R. 594, which would close the so-called "Enron loophole" that exempts electronic energy trading from federal commodities laws. This loophole enables traders to participate in regulation-free off-market deals, known as "over-the-counter" (OTC) trading.
Traditionally, trading of commodities such as crude oil, gasoline, and natural gas takes place on the New York Mercantile Exchange. This trading is overseen by the CFTC. However, since the loophole was opened in 2000, an increasing amount of OTC trading has led to speculation and energy price manipulation.
The new Farm Bill, which became law just last week with Donnelly's support, includes a provision that closes the Enron loophole.
"I have worked hard to crack down on oil speculators who are driving up the price of oil and making money at the expense of hard-working Hoosiers," Donnelly added. "I encourage the CFTC to continue their investigation of these speculators so we can protect consumers from market manipulation as prices continue to rise at the pump."