U.S. Senator Mark Pryor today introduced legislation to put the brakes on Wall Street speculators who are driving up gas prices through excessive speculation.
Pryor said he supports efforts underway by the Commodity Futures Trading Commission (CFTC) to curtail excessive speculation that inflates the cost of oil. He wants to address a remaining loophole that enables Wall Street speculators to manipulate the price of oil without ever taking control of the oil. The Closing Loopholes On Speculators in Energy Act (CLOSE Act) will require the CFTC to ensure that a majority of the futures contracts be owned by bona fide end users such as refiners, airlines and farmers who have a reason to hedge on the cost of oil other than solely increasing their profit margins. Currently, Wall Street investment banks and hedge funds control approximately 65-75 percent of the energy futures market.
"Wall Street brought our country to a near economic collapse and cost millions of people their jobs. We're seeing big investment banks and hedge funds return to their old tricks, using the courts to delay consumer safeguards and taking advantage of every loophole available." Pryor said. "Unless we crack down on the multiple avenues Wall Street uses to exploit consumers, this problem will only get worse."
CFTC Commissioner Bart Chilton calculated that excessive oil speculation swindles consumers out of hundreds of dollars per year. According to Chilton, an individual who drives a Honda Civic pays $7.30 more every time they fill up, or $380 a year, due to Wall Street speculators. Individuals who drive a Ford Explorer pays an extra $10.41 or $541 a year; and those who own the popular pick-up truck, the Ford F150, pay an additional $14.56 per fill up, or more than $750 a year.
"Spinning oil prices higher and higher for huge profit is hurting consumers at the gas pump and threatening our nation's economic recovery." Pryor said. "We need to clamp down on the funny business, while also increasing our supply of domestic energy resources and establishing a national energy strategy."