Americas News
President Obama in Oil Market Manipulation Crack Down
US President Barack Obama has asked Congress to bolster the federal supervision of oil markets and crack down on oil speculators.
The Commander-in-Chief wants bigger penalties for market manipulation, and to give greater power to the Commodity Futures Trading Commission (CFTC) to increase the amount of money traders need to back their positions.
A number of notable sources including Rex Tillerson, CEO of Exxon-Mobil, have said market speculation artificially inflates the price of a barrel of oil by as much as 40%.
The plan, with a reported implementation cost of $52 million, would see penalties for the market manipulators of $10 million, up ten-fold from the current $1 million.
And the 44th US head of state likened the desired six-fold increase for surveillance and enforcement staff to putting “more cops on the beat” to oversee the oil markets.
"We can't afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher only to flip the oil for a quick profit," he said.
However, Obama acknowledged that rising oil and gas prices were the result of global trends such as Middle East instability and rising demand from China and India.
He also said there was no "quick fix" to high prices, and that the plan won't bring them down "overnight".
With the Democrat looking for re-election this fall, various analysts have commented that the plan is unlikely to get through the Republican controlled House of Representatives.
House speaker, Republican John Boehner, called the plan a "gimmick" and "unnecessary".
