Today, Congresswoman Lois Capps (CA-23) applauded President Obama's unveiling of the Administration's plan to strengthen federal oversight of the global oil market and oil speculators, and called on the House leadership to bring the plan to the floor for a vote. The proposal calls for a $52 million investment in the federal regulator charged with combating oil speculation, the Commodity Futures Trading Commission. The funding would support hiring additional surveillance and enforcement staff as well as upgrading the IT equipment and technological capabilities of the agency. The President's plan would also increase penalties for oil speculation.
President Obama's plan to strengthen federal oversight of the oil market is a key component of his Administration's "All of the Above" energy strategy. Middle class families are struggling with high gas prices due in no small part to Wall Street oil speculators preying on the fears generated by uncertainty in many oil producing countries. The CFTC is the "cop on the beat" in charge of combating speculation on Wall Street, and we need to give it the tools it needs to protect the American consumer from market manipulation and other actions that are driving up gas prices across the country. And I'm pleased to see the call to increase penalties for these actions, otherwise Wall Street will gladly accept a slap on the wrist in return for big profits," said Capps.
On April 5, 2012, the House Democratic Steering and Policy Committee held a hearing on the effect of speculation on the price of oil and financial experts testified that speculation is driving oil prices up. Michael Greenberger, former Director of the Division of Trading and Markets at the Commodity Futures Trading Commission and current law professor at the University of Maryland said, "It is similar to the gambling Wall Street did on whether or not people would pay their subprime (below-market rate) mortgages in the mortgage meltdown. Now they are betting on the upward direction of the price of oil."