REP ANDREWS INTRODUCES BILL TO END OIL AND GAS PRICE GOUGING
I recently held a press conference to call attention to the current situation with oil and gas speculation. There are real concerns that these commodity markets are being manipulated by big energy companies, and this is driving our prices sky high. That's why I have introduced legislation (HR 5853) that would give the government the authority to monitor these markets for unfair speculation and penalize those who violate regulations set to protect consumers from price gouging. Here's how it works...
Oil and gas is being bought and sold on energy markets, much like stocks on the stock exchange. Energy used to be traded on markets regulated by the U.S. government, but has now expanded to new electronic markets that are exempt from regulation. Enron helped cause this problem by lobbying Congress to include this exemption in 2000 in the Commodity Futures Modernization Act. Since then, the door has been left open for a tremendous amount of unfair trading on these markets, which many financial analysts of the oil and gas industry say have resulted in the price of gas and oil jumping 20-25% for you, the consumer.
We hear a great deal of talk about oil prices, but not many real solutions. Now is the time for action. I am working with both my Democratic and Republican colleagues to support HR 5853 and have it brought up for a vote before the full House. I will continue to work for fair competition in energy markets, and will fight to give the government the ability to protect its citizens from unfair market speculation.
I've included an article from the Associated Press below for additional reading on this topic.
Oil prices rise as traders watch storm
August 2, 2006
Oil prices rose Wednesday as traders nervously watched a tropical storm in the Caribbean and the fighting in the Middle East, fearing supply threats.
Traders were also awaiting a U.S. inventory report due later Wednesday that was expected to show declines in gasoline inventories and crude stocks.
Light sweet crude for September delivery on the New York Mercantile Exchange rose 67 cents to $75.58 a barrel in electronic trading by afternoon in Europe. September Brent rose 71 cents to $76.60 a barrel at London's ICE Futures exchange.
Forecasters said Tropical Storm Chris could become a hurricane late Wednesday as the third named storm of the Atlantic hurricane season brushed past islands in the eastern Caribbean early in the day. That raised traders' fears that it could strengthen and damage oil platforms and refineries along the Gulf Coast.
In the Middle East, there were no signs of a quick resolution to the escalating conflict between Israel and Hezbollah guerrillas in Lebanon.
Israel launched its deepest ground strike into Lebanon on Wednesday, claiming it had killed 10 Hezbollah guerrillas and captured five, while nearby air strikes killed at least 15 civilians. Israeli warplanes also attacked a Lebanese army base in south Lebanon, killing three soldiers, a security official said.
Hezbollah guerrillas hit back, firing at least 150 rockets at towns across northern Israel, wounding at least 17 people and killing one, Israeli police said.
Oil traders have been focused on the violence for nearly three weeks, worried about possible supply interruptions. Iran, OPEC's No. 2 supplier, is a backer of Hezbollah and is in the midst of a diplomatic standoff with the United Nations over its nuclear program.
On Tuesday, Iranian President Mahmoud Ahmadinejad rejected a U.N. Security Council resolution that would give his nation until Aug. 31 to suspend uranium enrichment.
"There are many issues that are supportive of strong prices," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "However, barring any change in the geopolitical situation or a hurricane, I expect prices to stay around the mid-70s for the near term."
In the U.S. inventory report, gasoline inventories are expected to fall by about 1.86 million barrels on the back of robust summer demand, according to a survey by Dow Jones Newswires. Commercial crude stocks are expected to diminish by 580,000 barrels.
Gasoline futures on the Nymex were up more than 2 cents to $2.2985 a gallon, while heating oil rose more than a cent to $2.0934 a gallon. Natural gas futures rose 91 cents to $8.481 per 1,000 cubic feet. That contract had surged 14 percent on Monday to settle at $8.211, the highest close since early February.
While U.S. demand for natural gas is no doubt higher, analysts noted that the country has ample supplies. According to the Energy Department last week, U.S. has 2.76 trillion cubic feet of natural gas in underground storage. The five-year average for this time of year is 2.27 trillion cubic feet.