Prices up, lawmakers call for crackdown on oil speculation

By David Tanner, Land Line associate editor | 3/5/2012

With fuel and oil prices continuing to inch upward, a group of 68 federal lawmakers is calling on the Commodity Futures Trading Commission to crack down on speculative oil trading. They even accuse the commission of not doing its job to enforce a crackdown law passed in 2010.

The national average price for on-highway diesel was at $4.094 on Monday, March 5, up more than 4 cents for the week and 24 cents since mid-January according to the U.S. Energy Information Administration.

Midwest and Rocky Mountain regions saw fuel prices up more than 6 cents a gallon for the week, yet remain the only two regions averaging under $4.

Following is a roundup for the week of on-highway diesel prices as reported by the EIA:

  • U.S. – $4.094, up 4.3 cents
  • East Coast – $4.167, up 3.3 cents
  • New England – $4.253, up 3.2 cents
  • Central Atlantic – $4.243, up 3.5 cents
  • Lower Atlantic – $4.094, up 3.1 cents
  • Midwest – $3.974, up 6 cents
  • Gulf Coast – $4.020, up 2.8 cents
  • Rocky Mountain – $3.986, up 6.7 cents
  • West Coast – $4.372, up 4.6 cents
  • California – $4.454, up 4.4 cents

ProMiles reported the daily price average for diesel at $4.081, up four-tenths of a penny overnight and 3 cents during the past week.

Connecticut led the way by state with an average of $4.407 per gallon. The cheapest average by state was Indiana at $3.798 including taxes.

But it wasn’t diesel prices that got a group of mostly Democratic members of the U.S. House and Senate to sign on to a letter addressed to the trading commission and authored by Sen. Bernie Sanders, an Independent from Vermont.

Sanders pointed to a Goldman Sachs report that stated speculation in the oil market adds about 56 cents to the pump price of gasoline.

The average gas price was at $3.77 on Monday, up 25 cents since mid-February.

Sanders and others said the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is in place to help reduce manipulation of the markets by cracking down on the types of trades and swaps on Wall Street that have no regard to supply and demand.

“As the cost for American people to fill their gas tanks continues to skyrocket, the CFTC continues to drag its feet on imposing strict speculation limits to eliminate, prevent, or diminish excessive oil speculation as required by the Dodd-Frank Act,” the lawmakers stated.

Click here to read the letter.

Speaking of oil prices, crude was trading at $106.86 at midday Monday in New York, up 14 cents on fears about Iran’s development of a nuclear program, Reuters reported.

In Europe, crude oil was trading at $124.24 a barrel, up 59 cents based on the European Union’s vow to ban the importation of oil from Iran sometime this summer.

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